It might seem natural to gauge the amount of discrimination in labor markets by looking at the average wages of different groups. For instance, in recent years the wage of the average black worker in the U.S. has been about 20 percent less than the wage of the average white workers. The wage of the average female worker has been about 30 percent less than the wage of the average male worker. These wage differentials are sometimes presented in political debate as evidence that many employers discriminate against blacks and women. Yet there is an obvious problem with this approach. Even in a labor market free of discrimination, different people have different wages. People differ ill the amount of human capital they have and in the kinds of work they are able and walling to do. The wage differences we observe in the economy are, to a large extent, attributable to the determinants of equilibrium wages. Simply observing differences in wages among broad groups say little about the prevalence of discrimination. Consider, for example, the role of human capital. About 80 percent of white male workers have a high school diploma, and 25 percent have a college degree By contrast, only 67 percent of black male workers have a high school diploma, and only 12 percent have a college degree. Thus, at least some of the difference between the wages of whites and the wages of blacks can be traced to differences in educational attainment, Similarly, among white workers, 25 percent of men have a college degree, whereas only 19 percent of women have a college degree, indicating that some of the difference between the wages of men and women is attributable to educational attainment. In fact, human capital is probably even more important in explaining wage differentials than the foregoing numbers suggest. For many years, public schools in predominantly black areas have been of lower quality than public schools in predominantly white areas. Similarly, for many years, schools directed girls away from science and math courses, even though these subjects may have greater value in the marketplace than some of the alternatives. If we could measure the quality as well as the quality of education, the differences in human capital among these groups would seem even larger. Human capital acquired in the form of job experience can also help explain wage differences. In particular, women tend to have less job experience on average than men. One reason is that female labor-force participation has increased over the past seven decades. Because of this historic change, the average female worker today is younger than the average male worker. In addition, women are more likely to interrupt their careers to raise children. For both reasons, the experience of the average female worker is less than the experience of the average male worker. Yet another source of wage differences is compensating differentials. Some analysts have suggested that women take more pleasant jobs on average than men and this fact explains some of the earnings differential between men and women. For example, women are more likely to be secretaries, and men are more likely to be truck drivers. The relative wages of secretaries and truck drivers depend in part on the working conditions of each job. Because these nonmonetary aspects are hard to measure, it is difficult to gauge the practical importance of compensating differentials in explaining the wage difference that we observe. In the end, the study of wage differences among groups does not establish any clear conclusion about the prevalence of discrimination in U.S. labor markets. Most economists believe that some of the observed wage differentials are attributable to discrimination, but there is no consensus about how much. The only conclusion about which economists are in consensus is a negative one: Because the differences in average wages among groups in part reflect differences in human capital and job characteristics, they do not by themselves say anything about how much discrimination there is in the labor market. Of course, differences in human capital among groups of workers may themselves reflect discrimination. The inferior schools historically available to black students, for instance, may be traced to prejudice on the part of city councils and school boards. But this kind of discrimination occurs long before the worker enters the labor market. In this case, the disease is political, even if the symptom is economic.

It’s almost the end of summer for the first annual contest to choose the best operating monopoly in America. Five contestants are selected. Each exhibits fine monopolistic characteristics and is worthy of serious consideration for the award. The U.S. Postal Service claims to be the longest-running monopoly and has the distinction of having its control over First Class mail prescribed by the Constitution. The monopoly has preserved large flows of revenues and high wage rates despite studies showing that private companies could carry the mail more efficiently at much lower cost. On the other hand, the position of the Postal Service has been eroded: first, by successful competition on package delivery; second, by the recent entry of express delivery services; and third, and potentially most damaging, by the introduction of the fax machine. Since faxes are bound to supplant(取代) a substantial fraction of First Class letters, the failure to get Congress to classify a fax as First Class mall and, hence, the exclusive domain of the post office shows a remarkable loss of political muscle. Thus, despite past glories, it is hard to be sanguine(乐观的) about the long-term prospects of the post office as a flourishing monopoly. OPEC was impressive in generating billions of dollars for its members. To understand the functioning of this cartel(卡特尔) it’s important to sort out the good guys from the bad. Saudi Arabia and Kuwait have typically held oil production below capacity and thereby kept prices above the competitive level. While Libya and Iraq have produced as much as they could and thereby kept prices low. The former were responsible for the vast expansion of oil revenues. But unfortunately, these countries could not keep the other OPEC members in line and were also able to exclude new producers or prevent conservation by consumers. Most cable TV companies have government-issued licenses that keep competitors out. Thus, this business supports the hypothesis that private monopolies aren’t sustainable for long unless they have the weight of government behind them. The rapid escalation of prices and the limitations on services seem, however, to be getting customers and their congressional representatives progressively more annoyed. Thus, it would not be surprising if legislative action leads soon to a deterioration of the cable companies’ monopoly power. Officials of Ivy League universities have been able to meet in semi-public forums to set rules that determine prices of admission as a function of applicant characteristics, especially financial resources. The universities have more or less successfully applied a high moral tone to the process: Rich applicants are charged more than the competitive price for schooling in order to subsidize(补贴) the smart poor, but it is unclear why this subsidy should come from the smart rich rather than from taxpayers in general. In any event, the universities’ enviable cartel position has been damaged by the unenlightened Justice Department. ’Since most of the universities involved have agreed to stop these practices, it may be that future prices for private higher education will come closer to being competitively determined. The final contestant, the NCAA, has been remarkably successful in holding down “salaries“ paid to college athletes. It would be one thing merely to collude to determine price ceilings, but the NCAA has also managed to monopolize all the moral arguments. The NCAA has the much more difficult task of defending a policy that prevents many poor individuals from earning money. Incredibly, this defense has been so successful that it has even allowed the organization to maintain the moral high ground. When the NCAA maintains its cartel by punishing schools that violate the rules, almost no one doubts that the evil entities are the schools or people who paid the athletes, rather than the cartel enforcers who prevented from getting paid: Given this extraordinary balancing act, the decision of the panelists was straightforward and the NCAA is the clear and deserving winner of the first annual prize for the best monopoly in America.

What does the author mean by “Even in a labor market free of discrimination, different people have different wages”?

By how much is the percentage of white male workers with a high school diploma higher than that of black male workers with a high school diploma?

Why did school direct girls away from science and math courses?

Why do women have less job experience on average than men?

What can we infer from the passage?