Consider the two labor markets shown to the right. Suppose jobs in these two occupations require identical skills and training but that working conditions in the market shown to the far left are very unpleasant while those in the market to the right are very pleasant.

    The demand for labor is identical in the two occupations, but the supply is very different. Due to the poor working conditions in the unpleasant job few workers apply for positions in this occupation causing the suppy curve SU to be shifted back. As a result wages, WU, are very high for those in this occupation.

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