Wage Determination in a Local Labor Market: A Case Study of the Boston Labor Market

In this study based on unpublished wage data collected from a select group of Boston area firms, it was found that the wage structure for unskilled and clerical workers was largely unchanged between 1960 and 1964, but narrowed significantly thereafter. The fact that the Boston unemployment rate was nearly constant during 1960-64 and decreased during 1965-69 suggests a positive relationship between wage dispersion and unemployment. Interfirm wage differentials for skilled workers remained largely unchanged throughout the ten-year period, a finding which supports the view that unemployment during the 1960s was largely concentrated among lower skilled occupations. The results have implications for the possible success of a new wage-price guideposts policy.