RDP 2000-08: Nominal Wage Rigidity in Australia 6. Whose Wages are Rigid?

An important question is whether downward rigidity of wages is a general feature of our labour market or confined to particular classes of worker. We find that while there is a general tendency for wages to be sticky downwards, the extent of downward rigidity is not uniform across all groups of workers. We focus on the distribution of wage changes for seven of the broad ‘job families’ that are separately identified by MCED. These include: senior executives; corporate staff, finance and accounting; information technology; clerical, administration and human resources; engineering and technical trades; sales and marketing; and production and supply.^[28]

We find that, in each year of our sample, three job families consistently have among the most highly skewed distributions of wage changes. Their precise ranking will vary with the particular measure of skewness used. We focus here on the mean-median difference, simply because it provides a set of rankings that is similar in each year of our sample. Using this measure, the wages for those working in information technology tend to be the most skewed away from wage cuts, followed closely by senior executives and those in the corporate staff, finance and accounting category (Table 3). These job families represent skilled occupations with relatively high productivity, so that skewness away from wage cuts might be expected. They also represent occupations for which there is a greater tendency to have individual contracts. The evidence of skewness away from wage cuts shown here is consistent with recent findings on downward nominal rigidity of wages among those on individual contracts (Charlton 2000).

Footnote

Other job families are available, but not on a consistent basis over our full sample period, or with adequate sample size. [28]