Abstract
This paper reports an analysis of the effect of changes in legislated minimum wages on negotiated wage increases, using micro data on Canadian labor contracts between 1966 and 1975. The analysis departs from previous studies in that it divides the sample data base into high- and low-wage sectors. The results indicate that union negotiated wage settlements reflect at least partially legislated minimum wage changes over the past contract period. However, this minimum wage effect is restricted to the low-wage sector. In addition, the sectoral results suggest that the relative wage structure should tend to narrow in the long run.
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