PRODUCT AND LABOUR MARKETS IN WAGE DETERMINATION: SOME AUSTRALIAN EVIDENCE

Abstract

Abstract The study is concerned with the extent to which workplace wage drift is influenced by establishment‐specific or occupation‐specific factors. It demonstrates, by analysis of variance of pay data from a survey of 44 occupations in 198 workplaces, that the sources of variation are predominantly establishment‐specific. There is evidence of a link between the amount of discretion an employer exercises in the labour market and the degree of concentration in his product market. It is argued that discussions of pay determination have been unduly preoccupied with labour market processes and have neglected the variation in employer behaviour arising from differences in product market.