![\"\"](\"https:\/\/gmatclub.com\/blog\/wp-content\/uploads\/2012\/10\/110110210.jpg\" "\\"110110210\\"")
This is the second post in the series of articles on real-life facts you need to know for GMAT Critical Reasoning.<\/p>\nThis is the second post in the series of articles on real-life facts you need to know for GMAT Critical Reasoning.<\/p>\n
Here's the full list (we'll update it with links as we go!):<\/p>\n
In some ways, this is an extension of the Law of Supply and Demand, but there are enough new ideas that I will count it as a separate fact.<\/p>\n
Everyone who works for a living earns some kind of salary, some kind of\u00a0wage<\/a>.\u00a0 By \"labor\", I will mean the collective pool of all potential employees.\u00a0 In the classic free-market perspective, laborers, in offering their capacity to perform work, offer economic goods to management, and wage is the\u00a0price<\/em>\u00a0that management pays for these goods.\u00a0 As with all prices, this price is determined by supply and demand.\u00a0 If the demand is low --- few employers place any importance on a particular job --- or if supply is high --- tons of workers could perform that particular job --- then the \"price\", i.e. the wage, will tend to be low.\u00a0 McJobs, jobs that require low skill and low commitment, tend to have low wages as well, because just about anyone could do those jobs --- supply is ridiculously high.\u00a0 If demand is high and supply is short --- that is, many people want this job done, and very few can do it well \u2013 then the \"price\", i.e. the wage, will tend to be high.\u00a0 Rock stars and Major League Baseball pitchers tend to make a lot of money because many people really want them to do what they do, and few people can do it as well as they do it.<\/p>\n The term \"blue collar<\/a>\" worker refers to factor workers and folks who do physical or mechanical work.\u00a0 Typically, blue collar workers are not college educated, although they may have had some vocational training.\u00a0 The term \"white collar<\/a>\" worker refers to office jobs and professional jobs, jobs that are primarily intellectual rather than physical in their demands.\u00a0 Essentially, all white collar jobs demand a college education, and some (doctor, lawyer, manager, etc.) also involve some kind of advanced professional degree.\u00a0 White collar jobs tend to have higher wages and associated benefits.\u00a0 The assumption is: most white collar employees could do most blue collar jobs, but few blue collar employees could do a white collar job; therefore, according to this assumption, supply is considerably lower for white collar jobs, and demand is higher, which make the latter's wages higher.<\/p>\n A\u00a0union<\/strong><\/a>\u00a0is a collection of blue collar worker who group together to secure certain advantages.\u00a0 At the beginning of the\u00a0Industrial Revolution<\/a>, there were lots of low skill factory jobs, and since so many people could do the job --- an extremely high supply of labor ---- factory owners could pay very low wages and still get all the jobs filled.\u00a0 An isolated worker had, essentially, no power to change the situation.\u00a0 Only when worker gathered themselves into unions, and used\u00a0collective bargaining<\/a>\u00a0methods including\u00a0strikes<\/a>, were they able to secure more favorable agreements with management: higher wages, benefits, weekends off, etc.\u00a0 Over time, the labor movement was able to secure the passage of important\u00a0labor laws<\/a>\u00a0that encoded the rights of workers.\u00a0 The various rights that workers now have --- indeed, the very existence of what we know as \"the weekend\" --- are the product of this history of the\u00a0labor movement<\/a>.\u00a0 Having the gist of this movement, this history, and how it plays out in the modern work environment could be helpful in deciphering any GMAT CR question concern employees and their wages.<\/p>\n This post was written by Mike McGarry, GMAT expert at Magoosh<\/a>, and originally posted here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" This is the second post in the series of articles on real-life facts you need to know for GMAT Critical Reasoning. Here’s the full list (we’ll update it with links…<\/p>\n","protected":false},"author":133,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,783,243,721,735],"tags":[],"class_list":["post-14908","post","type-post","status-publish","format-standard","hentry","category-gmat","category-magoosh-blog","category-blog","category-critical-reasoning-gmat","category-verbal-gmat-blog","entry"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/posts\/14908","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/users\/133"}],"replies":[{"embeddable":true,"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/comments?post=14908"}],"version-history":[{"count":3,"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/posts\/14908\/revisions"}],"predecessor-version":[{"id":15094,"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/posts\/14908\/revisions\/15094"}],"wp:attachment":[{"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/media?parent=14908"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/categories?post=14908"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/tags?post=14908"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}