Wage spread

Also known as: Wage inequality, wage dispersion

The term wage spread (wage inequality or wage dispersion) indicates the difference between different wage levels. Usually the highest and lowest wages are compared with each other and with the mean wage rates. The greater the difference, the greater the wage spread.

Ideally, the wage spread corresponds to the differences in productivity. On the one hand, this is difficult to measure; on the other hand, the relationship between the bargaining power of the employees and that of the companies also plays a decisive role. Something like that is evident in the case of managers who exploit their market power for exorbitant wage increases.

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