Why Wages Are Lower in Retailing

Abstract

Wage scales are lower in trade, agriculture and the service industries, in general, than they are in manufacturing, construction and transportation. Similarly, within a major industrial group such as manufacturing, wages are higher in the automotive, aircraft and petroleum refining industries than in textiles, apparel and leather products.1 Differentials in wage scales have existed for many decades. Today, as in the past, buyers and sellers still make bargains in the labor market at various rates, rather than at a single rate, even for the same labor grade. Various economic factors have been singled out to explain why wage scales can be and are higher in some industries than in others. Professor Lester offers the following array: Some industries have much higher wage scales (both for unskilled and skilled labor) than do other industries. In terms of both entrance rates for common labor and of average hourly earnings for all production workers, the following are high-wage industries not only in this country but also in Canada and Great Britain; petroleum refining, automobiles, railway equipment, chemicals, rubber tires and tubes, and aircraft. By the same token, wage scales are relatively low in such industries as tobacco, cotton textiles, leather and leather products, food preparation and canning, lumber, fertilizer and furniture.