Economy 101: Supply and Demand Wages Which of the following are likely to put up

Question

Economy 101: Supply and Demand Wages

Which of the following are likely to put upward pressure on (hourly) wages and which are likely to push (hourly) wages down? Increased non-wage compensation from bonus pay and commissions (on high skilled worker hourly wages) Immigration (impact on low skilled worker wages) Computer technology (impact on high skilled worker wages) Upward pressure on wages An increasing number of college graduates (impact on median wages of the nation). Downward pressure on wages An increasing number of college graduates (impact on college graduate wages). Increased union power and wages (impact on same industry non-union wages)

Explanation / Answer

(a) Increased non-wage compensation - Downward pressure

(b) Immigration - Downward pressure (Since labor supply rises)

(c) Computer technology - Downward pressure (Since labor demand falls)

(d) Increasing number of college graduates - Downward pressure (Labor supply rises)

(e) Increased union power - Downward pressure on non-union wages

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