To calculate:
The average weekly earnings of employee A and employee B, and the earning gap between them to conclude about wage discrimination.
Explanation of Solution
Employee A:
Given,
Wage rate for first 40 hours of work is $20 per hour.
Overtime pay is $30 per hour.
Working hours are 36 hours per week.
The formula to calculate earnings for one week is,
Substitute $20 per houras wage rate, 36 hours of working hours, 0 hour for overtime working hours and $30 as overtime wage rate.
Since there are four weeks in the month so, the monthly earning of employee A is $2,880
The formula to calculate average weekly earnings is,
Substitute $2,880 for monthly earning and 4 for number of weeks.
Employee B:
Given,
Wage rate for first 40 hours of work is $20 per hour.
Overtime pay is $30 per hour.
Working hours are 42 hours per week.
The formula to calculate earnings for one week is,
Substitute $20 per hour as wage rate, 40 hours as working hours, 2 hours for overtime working hours and $30 as overtime wage rate.
Since, there are four weeks in the month so, the monthly earning of employeeB is
The formula to calculate average weekly earnings is,
Substitute $2,880 for monthly earning and 4 for number of weeks.
From the above calculation, it is clear that the average weekly earnings of B are more than that of A.
The formula to calculate earning gap is,
Substitute $860 for average weekly earnings of B and $720 for average weekly earnings of A.
The formula to calculate percentage of earnings gap is,
Substitute $140 for earning gap and $720 for average weekly earnings of A.
From the above calculation,it is clear that the average weekly earnings of employee B is more than A by 19 %. The above earning gap is not due to discrimination but is rather due to the hard work of B. Both employee shave equal chances of earning more money. As B has worked for overtime, so, he has been awarded with more earnings.
Concept introduction:
Earning gap:
Earning gap is the difference between the wages of two employees based on the earnings earned by them.
The formula to calculate earning gap is,
Wage Inequality:
Wage inequality is a discrimination of wages based on gender skills and many more factors. In the modern era, wage inequality is a practice followed in every part of the world and in every profession.
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