Termine

This paper brings together insights from the literature on wage determination to explore the idea that the labour market contains a dynamic resulting in growing wage differentials between workers with different levels of qualifications. Call this dynamic the centrifugal nature of the labour market. Few existing accounts of wage determination contain the conceptual resources to make sense of this phenomenon, and even these exceptions do not make it explicit. The paper then goes on to show that from several normative standpoints commonly adopted within the discipline of economics, wage differentials due to the centrifugal nature of the labour market will be considered unjust. Finally, whereas standard public policy remedies for income inequality might prove surprisingly ineffective to correct this injustice, the paper suggests that a cap on the wage ratio between highly qualified and less qualified workers would fare better.