Chapter 19 Reflection

Chapter nineteen: Earnings and Discrimination

Margin note 1. Page 398.
"Doesn't seem to take every nonmonetary aspect of a job into consideration."
The theory of compensating differential is the difference in wages that arises to offset the nonmonetary characteristics of different jobs.  Although I can think of think of some industries/jobs where this doesn't seem to come into play.  My family owns among other things a chain of convenience stores in Texas.  Four of these stores have QSRs (quick service restaurants).  I have spent time learning the ins and outs of those stores, as well as training managers for them.  So far in my experience the fast-food environment has been the most grueling to work in.  It can be hard work.  However, it requires no education background.  People who have never finished high school can learn how to drop a basket of french fries.  So in this industry, pay seems to be based on amount of education - not the amount/difficulty of labor. 
On the other end of the spectrum, there are people in the entertainment business - I'll focus on the movie industry.  Whereas shooting a movie may be physically taxing for a few months, actors get paid a ridiculous amount of money.  Their job is not particularly dangerous (the ones who don't do their own stunts) and some have gone to theater shcoool - some haven't.  The people in this industry aren't saving lives or producing an essential need for humans, it is simply entertainment.  Yet it can be one of the richest industries in the United States. 

Margin note 2. Page 399.
"Human capital view: People with a higher education make more money."
Human capital is the accumulation of investments in people, such as education and on-the-job training.  The text states that those with a college degree earn almost twice as much those without a college degree.  Depending on the type of job you are looking for, education and experience can make all the difference.  I know at the job I am at now, I was called for interview because I had previous experience at a business in the same industry.  When hiring, employers look for the right fit for the job, and education, previous training, and/or experience can signal that.

Margin note 3. Page 402.
"Signaling theory of education: a degree is almost a facade of ability, and does not enhance productivity."
Under the signaling theory of education, workers are not more productive because they have higher learning, it just seems like they are.  Where I do think that there is a morsel of truth in that, I don't believe it to be entirely true.  I do think that real-life experience can do more than any college classroom, but there are things an individual can learn from obtaining a degree.  The most important of which is broadening your perspective.  Earning a degree can also show that you are committed to that field.