Real National Income

Low pay is concentrated in lower-skilled occupations. But the factors that affect pay levels in these occupations are different from those that affect the pay of the higher skilled. The paper used the 1998 Workplace Employee Relations Survey to examine the determinants of pay in lower-skilled jobs. It finds a wide range of employer and workplace characteristics that depress pay levels in these jobs. In only a small minority of them does trade union bargaining attenuate these effects. Human capital and individual characteristics are less important than features of the job and employer.