Wage leadership in Canadian Industry

Industry data are used to investigate wage leadership patterns across industries that may be union- or nonunion-induced. A seemingly unrelated regressions (SUR) model was estimated for 24 industry groups with data from the first quarter of 1973 through the first quarter of 1983. A factor analytic approach was used to select the leading sectors. Results lend considerable support to the wage leadership hypothesis and suggest a scenario of higher than average wage increases occurring in the leading sectors. Analysis of the relationship between the leadership coefficients and the proportion of employees unionized in each industry revealed that unionization is a significant factor. It explains the lead-following behavior linked to the mining and primary metals leading sector, but not for the petroleum and coal products leading sector.