News Story Figures just released show that in the past year the difference between male and female pay decreased. A year ago, for every dollar men earned, women made 73 cents, but now women earn 76 cents. This is significantly greater than in 1979 when women made only 62.5 percent of male pay. Accounting for this is the fact that women s average weekly earnings grew at an annual rate of 6.6 percent, while for men the increase was only 2.4 percent.
Experts believe that several underlying factors are at work.
First, the strong economy has led to a tight labor market, which requires employers to bid up wages in order to be able to recruit and retain employees. Third, increasing competition has induced some employers to offer more performance-based pay, which is said to give women a fairer opportunity of increasing their pay. Progress over time is uneven, however. It is expected that as the economy slows, so will the relative gains of women. Questions Draw a diagram of the labor market for men, with the real wage rate on the vertical axis and the quantity of labor on the horizontal axis.