Why some occupatiosn get paid more than others

Labor Market
Name
Course
Institutional Affiliation
Labor Market
In unfettered labor markets, the demand for labor is determined by the value and employee provides to the firm. Employees who bring more revenue to a firm are thus more valuable and able to bargain for more wages. Further, firms aim at maximizing revenue and minimizing cost. Therefore, if two potential employees bring the same value, a firm would prefer the one with a lesser wage demand to minimize cost. Besides, the more the wage rate, the more people are willing as well as able to work (Boyes and Melvin, 2014).
The highest paid actors and actresses earn much more than the employees in the education and health services sector as a result of the forces of demand and supply in the labor market. In the entertainment industry, a production company would earn significantly more revenue from hiring high profile personalities, as they act as brand ambassadors leading to higher demand for the films and consequently more sales revenue. Further, there is a short supply of actors that are willing and have the ability, skills, and knowledge necessary to earn the production companies substantially high revenues, leading to competition among the firms for the few available ones (Calnan, 2015).
On the contrary, in the education and health services sector, the additional revenue that an institution accrues from hiring a specific employee is minimal due to significantly similar skills sets. The firms in this sector can also easily substitute the employees as they are in ample supply and bring markedly identical skills and value to the firms.

Thus, they are paid considerably lower wages as they compete with each other to take up the few positions available.
Top hedge executives also earn considerably more revenue as compared to those in the educational and health sector as a result of substantially high demand for returns on capital, while there is a short supply of people willing and capable of providing the high returns (Pfeiffer and Healy, 2015). Thus, individuals and firms are willing to pay significantly high fees and commissions on profits to the few firms which can deliver, leading to high wage rates. On the contrary, there is an extensive supply of individuals and organizations that are willing and able to provide most of the educational and health services leading to lower demand and therefore lower wage rates.

References
Boyes, W., and Melvin, M. (2014). Fundamentals of Economics. (6th ed). Mason, OH: South-Western, Cengage Learning.
Calnan, M. (2015). Robert Downey Junior is Hollywood’s highest-paid actor. Employee Benefits. Retrieved from, https://www.employeebenefits.co.uk/issues/august-online-2015/robert-downey-junior-is-hollywoods-highest-paid-actor/
Pfeiffer, S., and Healy, B. (2015). In Tough Year, Hedge Fund Leaders Still Paid Well; Average Salary of $467M Was Half 2013, Report Says. Boston Globe. Retrieved from, https://www.bostonglobe.com/business/2015/05/07/for-hedge-fund-managers-modest-returns-produce-big-paychecks/qFa32u82Fz6aw31WsWVaoL/story.html