Culture

Culture is another sociological factor that affects the wage determination process. Cultures instill in people a set of values or beliefs common to the larger social group. These cultural values may have an important effect on the earnings and economic success of different ethnic groups in the labor market as they shape the attitudes of individuals concerning the work ethic, entrepreneurship, risk taking, occupational choice, the importance of education and the desirability of getting ahead in a materialistic society. Are cultural differences important in explaining wage and income difference among people? Several books and experts have argued about the above.

In terms of the average family income the two ethnic groups that have experienced the greatest success in the United States are Jewish Americans and Japanese Americans. The great majority of people of both groups came to America penniless and often suffered intense discrimination here. Despite these roadblocks, both groups worked their way up the economic ladder passing by other ethnic groups such as the Germans and the Russians. Why have other ethnic groups not succeeded economically to the same extent? 

One reason is that some groups came to the United States later than others and are several generations behind in the economic race. Others have argued however that some groups are also penalized by cultural attitudes that conflict with the demands of a highly technocratic, rationalistic society. American Indians are perhaps the best example of this conflict. Despite being the first group to settle in the United States they still have the lowest average family income of all ethnic groups.