101 lecture 19 earnings and discrimination
TRANSCRIPT
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Next Exam !
Exam 6 Thursday December 26
!
Chapters 18, 19, 20 and 21
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Microeconomics Lecture 19
!
Earnings and Discrimination
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Wage Gap
Education Experience Preferences
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Discrimination is
Expensive
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$0
$17,500
$35,000
$52,500
$70,000
Black White Asian Hispanic
Median Household Income
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Compensating Differentials
95% of job-related deaths are men.
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America’s 10 Most Dangerous Jobs
Per 100,000Average 3.3Fishing 200Logging 62
Pilot 57Farm & Ranch 36
Roofers 35Ironworkers 30Sanitation 25Machinist 19
Truck Driver 18Construction 18
Source: Bureau of Labor
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bits and
atoms
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atomsthe physical universe
mass and energy e = mc2
always with us cannot create or destroy
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bitsdigital computer technology
ones and zeros binary digits or bits
software ideas intelligence intellectual
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creativityhow we combine bits and atoms in new ways
!
adding more bits to atoms
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ideas
inventions
innovations
human thought
inventors developing ideas
entrepreneurs successfully marketing inventions
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China U.S.
Manufacturing 2.5 billion 2.0 billion
Workers 100 million 12 million
Output per worker $25,000 $167,000
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$0
$45,000
$90,000
$135,000
$180,000
China U.S.
Output per Person
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Innovation - Productivity
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Continuous Innovation
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ideas
inventions
innovations
People have ideas
Inventors convert ideas to
inventions
Entrepreneurs convert
inventions to innovations
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inventions
go to market
$
Less than 10 percent of
inventions go to market
Less than 10 percent of
inventions that go to market are economically
successful
Less than one percent of
inventions are economically
successful
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ideas
innovation
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Intellectual
Financial Physical
Human
Culture
Entrepreneur
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discover Experimenting
idea
create
observe
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Cultural Capitaltrust values institutions infrastructure rules property rights rule of law taxes regulations stable currency mobility
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Human Capitaltrust knowledge skills personality health relationships
growing human capital learning new things education reading watching listening doing
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Physical Capitalnatural resources
atoms energy time
buildings equipment
tools
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Intellectual Capitalideas
methods technology
recipes ways to do things
research and development publishing
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Financial Capitalsavings = investment
connecting savers and borrowers investors and entrepreneurs
money and risk time is money
(1+r)n
limited liability corporations insurance
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Entrepreneurial Activity
looking for opportunity alert
capture value create value
take risk
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“There are no entrepreneurs
without capital.”
Capitalism, Socialism and Democracy !
Creative Destruction !
Innovation and Entrepreneurship
Joseph Schumpeter (1883 - 1950)
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Intellectual
Financial Physical
Human
Culture
Entrepreneur