The character of Wage determination 1. Workers are typically paid a wage that exceeds their reservation wage the wage that would make them indifferent to working or becoming unemployed. In other words, most workers are paid a high enough wage that they prefer to be employed rather than unemployed 2. Wage typically depend on labor-market condition: The lower the unemployment rate, the higher the wages 2003-7-132003-7-13 11 The character of Wage determination 1.Workers are typically paid a wage that exceeds their reservation wage,the wage that would make them indifferent to working or becoming unemployed. In other words, most workers are paid a high enough wage that they prefer to be employed rather than unemployed. 2.Wage typically depend on labor-market condition:The lower the unemployment rate, the higher the wages