Market forces and workers' power resources: A sociological account of real wage growth in advanced capitalism

Sociologists rarely study the determinants of real wage growth, even though it affects core sociological concerns such as social stratification and income inequality. Using data from 14 countries over a 38-year period, this study assesses the multifaceted determinants of real wage growth in the manufacturing sectors of advanced capitalist societies. On this topic, neoclassical economics suggests that wages should track labor productivity, but sociological theories of class conflict suggest that both firms and workers use power resources' to shape distributional outcomes in their favor. Drawing on these ideas and others, the author argues that real wage growth is loosely related to productivity growth but strongly related to the power resources of workers. This argument is tested with panel regression techniques. The results provide strong support for a power resource theory of wage determination. The study ends by considering possible reasons for the weak effect of labor productivity on real wages.