Inter-Establishment Dispersion of Occupational Wage Rates, Ontario and Quebec, 1957

Abstract

The phenomenon of inter-establishment variation in occupational wage rates is of considerable significance not only to the economist concerned with wage theory but also to the unionist, the employer and those government agencies concerned with wage policy. In view of its importance it is unfortunate that in Canada there has been virtually no analysis of questions of inter-establishment wage diversity. In this vast and neglected field, it is difficult to choose a specific plot for cultivation or to know what size to make it. Since inter-regional differences are of great interest and significance to Canadians, it was decided, for a start, to attack the problem first by comparing the extent of dispersion in Ontario and Quebec. Further, the study is concerned with an examination of the factors which might explain the relatively greater dispersion found in Quebec. These factors include both inter- and intra-industry variation in rates, the “economic geography” of the two provinces, the effects of differences in plant size on plant wage rates, and the influence of unionism.The data consist of more than 1,250 establishment rates for hourly rated male common labour in the manufacturing industries of Ontario and Quebec for the year 1957. Common labour was chosen as a measure for comparing wages in different plants not only because it is a fairly homogeneous occupational group but also because it is the one occupation for which extensive cross-industry rate data are presently available in Canada. There is no doubt that some variation in the rates for any occupation will arise because of differences in ability—and effort—within the occupational group. A perfectly homogeneous group of workers is a textbook abstraction which can only be approximated in the real world in a very crude fashion.