Kumar, Pradeep
October 1972
ILR Review;Oct72, Vol. 26 Issue 1, p631
Academic Journal
The purpose of this article is to test the hypothesis on differentials in wage rates for unskilled labor across Canadian manufacturing industries. The failure of neoclassical competitive theory to explain the persistence of interindustry differentials in wage rates for specified jobs has created a challenge for labor economists. The wage rate of skilled workers is the most important determinant of the unskilled labor rate. The influence of the skilled rate is nearly equal to the combined force of all market and institutional influences affecting differentials in wages of unskilled labor. Trade unions apparently raise unskilled wages by exploiting the short-run inelasticity of the supply of skilled workers. This study is divided into two parts. The first section analyzes the wage behavior of unskilled labor in thirty-three Canadian manufacturing industries over the period from 1953 to 1969. The second part of the study examines the roles of market and institutional factors in determining the equilibrium industrial structure of wage rates of unskilled labor.


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