Question

Why are there such great differences in the wages and salaries paid to different people?

Answer 1

There are such great differences in the wages and salaries paid to different people because a worker's human capital is the greatest determinant of his or her wage or salary. Each person's human capital is valued according to the amount of education and training that person had throughout their life. So it is only natural that a person with two PhDs should have a higher salary that those who've only finished high school.