Question

paying a person a lower wage or excluding a person from an occupation on the basis of an irrelevant characteristic such as race or gender is economic discrimination. violates federal comparable worth laws. creates differences in wages that economists call \compensating differentials.\ can be explained by negative feedback loops. question 21 1 pts one implication of compensating differentials is that laws passed to protect the health and safety of workers may not make workers better off than they were prior to the passages of the laws. why is this so? if the laws make the work environment safer, there is no reason to pay workers a compensating differential for the risk associated with their jobs. workers may suffer from cognitive dissonance, which means that the perception workers have that their jobs are hazardous is not true. the principal-agent problem that exists in the workplace may cause workers to shirk more after the work environment becomes safer. in non-competitive markets, workers are unlikely to receive a compensating differential to compensate for jobs with extra risk. as a result, after the laws are passed their wages will not change

Explanation:

Compensating differentials are wage differences to offset job - related risks. If laws make the work environment safer, the risk - related compensation (compensating differential) is no longer justified. Workers were previously paid more due to job risks. With the reduced risk (safer environment), the extra pay (compensating differential) for risk can be removed. So, even though the work environment is better (safer), the workers' overall well - being (considering wage and work environment) may not improve as the wage part (compensating differential for risk) is taken away.

Answer:

If the laws make the work environment safer, there is no reason to pay workers a compensating differential for the risk associated with their jobs.