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In real societies people can be distinguished by their different resources, with the resources being incomes. The more "distinguishable" they are, the lower is the "actual entropy" of a system consisting of income and income earners. Also based on information theory, the gap between these two entropies can be called "redundancy". [23]
BLS explained the gap between productivity and compensation can be divided into two components, the effect of which varies by industry: 1) Recalculating the gap using an industry-specific inflation adjustment ("industry deflator") rather than consumption (CPI); and 2) The change in labor's share of income, defined as how much of a business ...
The theory of compensating wage differentials, by Adam Smith, provides a theoretical framework of the ideology behind pay differences. The theory explains that jobs with undesirable characteristics will compensate with higher wages compared to the popular, more desirable jobs, who provide lower wages to its workers. [13]
For example, the Gini coefficient of 0.513 for 2016 indicates that the average difference in income between pairs of households in that year was equal to 102.6 percent (twice 0.513) of average household income in 2016, or about $70,700 (adjusted to account for differences in household size).
In this model, the difference between different workers' wages and conditions arise from individual differences in their human capital (skills, experience, or formal education) or tastes. On the latter, as part of the theory of compensating wage differentials , those who prefer risky or dirty jobs receive higher compensation than those who take ...
The average American will face a 28% income shortfall in retirement, according to a recent survey by Fidelity Investments. And that's just the broad percentage: In dollars-and-cents terms, Gen ...
The theory’s main point is that promotions are a relative gain. Regarding compensation, the level of compensation must be strong enough to motivate all employees below the level of compensation who aim to be promoted. If the pay spread between promotions is larger, the incentive of employees to put in effort will also be larger.
China's Gini coefficient has risen from 0,31 to 0,491 between the years 1981 and 2008. The main reason for China's high Gini coefficient is an income gap between rural and urban household. The share of the urban–rural income gap in total income inequality increased by 10 per cent over the period 1995–2007, rising from 38 to 48%. [59]