Meaning & use
wage premium
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Meanings
nouncountablebusinessfinance
the extra amount that one group of workers earns compared with another group, or with what is usual.
Grammar: Countable: say 'a wage premium' or 'wage premiums'; it is commonly followed by 'over' or 'for'.
Patterns
- a wage premium over someone
- a wage premium for something
- a wage premium of X percent
- pay a wage premium
Graduates in this city enjoy a wage premium over people who left school at sixteen.
Employers here pay a wage premium for workers willing to do night shifts.
The report found that the wage premium for union members had shrunk since the 1990s.
nouncountablebusiness
the higher pay that a company or industry must offer to attract workers with scarce skills.
Grammar: Often used with 'offer' or 'command': the firm offers a wage premium to skilled staff.
Patterns
- offer a wage premium
- command a wage premium
- a wage premium of X percent
Software firms in the region offer a wage premium to anyone who can manage large databases.
Nurses in remote areas command a wage premium because so few want to move there.
Word forms
| plural | wage premiums |
|---|
Common combinations
- a wage premium over non-graduates
- The study measured the wage premium over non-graduates in ten countries.
- pay a wage premium
- Companies pay a wage premium when they cannot find enough trained staff.
- a wage premium for skills
- There is a clear wage premium for skills in short supply.
- a shrinking wage premium
- A shrinking wage premium may discourage young people from studying.
- command a wage premium
- Engineers with safety certificates command a wage premium.
Synonyms and how they differ
- pay differential
- This is the broader term for any difference in pay between groups, whether it favors them or not; a wage premium is always the extra, higher amount.
- salary premium
- Use this when you mean monthly or yearly salaried staff rather than hourly or weekly wage earners.
- bonus
- A bonus is a one-off extra payment, while a wage premium is a lasting higher rate of pay.
Opposites
Word family
- wage noun
- money paid regularly for work, usually by the hour or week.
- premium noun
- an extra amount added on top of a normal price or rate.
- wage earner noun
- a person who works for wages.
Commonly confused: wage premium or pay gap? wage premium or minimum wage?
wage premium vs pay gap
A pay gap is simply the difference between two groups' average pay, which can be in either direction; a wage premium is the extra amount one group gains.
wage premium vs minimum wage
The minimum wage is the lowest rate an employer may legally pay; a wage premium is pay above another group's level.
Practice
Graduates in this region earn about 20 percent more than other workers, so economists say they enjoy a wage premium ___ non-graduates.
Choose one answer.
'A wage premium over someone' is the standard pattern for comparing one group's pay with another's. 'On' and 'at' do not express the comparison, and 'into' makes no sense here.
Make it your own
Write a sentence using “wage premium”, then check it and compare it with the examples above.