Abstract

: Workers generally face higher levels of pollution and risk in their workplace than members of the public. Economists justify the double standard (for workplace versus public exposures to various pollutants) on the grounds of the compensating wage differential (CWD). The CWD, or hazard-pay premium, is the increment in wages, all things being equal, that workers in hazardous environments receive, as compared to other workers. Economists defend the CWD by asserting that workers willingly trade safety for extra money. This essay (1) examines the theory behind the CWD, (2) presents and evaluates economists' Market-Efficiency Argument for the CWD, (3) offers several reasons for questioning the CWD, and (4) applies the Market-Efficiency Argument to a real-world case, that of U.S. nuclear workers. The essay concludes that this argument fails to justify the CWD, at least in the case of U.S. nuclear workers.