AN ANALYSIS OF RACIAL WAGE DISCRIMINATION IN SOUTH AFRICA^*

Trade unions vs. statistical discrimination: Theory and application to post-apartheid South Africa

“…Second, it does not seem to fit with even a casual observation of the South African labor market. The main cause of racial wage discrimination was never linked to the employers' physical or social aversion against Black workers, but rather to a White workers' fear to lose their status by sharing their jobs with the latter (Knight and McGrath, 1977). These White workers used to put some pressure on employers, pushing the Black workers' wages above their marginal productivity.…”

Occupational Attainment of Migrants and Local Workers: Findings from a Survey in Shanghai’s Manufacturing Sector

“…For example, the rationing of primary-sector jobs, due to institutions or the high costs of setting up formal businesses, results in a sizeable secondary or informal sector, characterised by low levels of pay and inferior working conditions (Thomas and Vallee, 1996). Studies on South Africa in the 1970s found that equally productive Black workers were employed in lower-level jobs with lower rates of pay than White workers, as Black workers were denied access to many professional jobs (Knight and McGrath, 1977). In San Jose, Costa Rica, Gindling (1991) reported significantly different wage patterns between workers in the public and private sectors in the 1980s as jobs in the public sector were rationed.…”

Affirmative action policies and the evolution of post-apartheid South Africa’s racial wage gap

“…One of the first empirical analyses of the black-white wage gap (Knight and McGrath 1977) studied a period during which apartheid laws regulated labour market activity. White males earned approximately 5.7 times 4 more than their black counterparts in 1970.…”

“…Even so, white workers could expect to have earned between 3.6 and 5 times more than equally educated black counterparts. Knight and McGrath (1977) speculated that this racial gap was mainly driven by white workers' desire to protect their wages from market forces. They also found that most of the wage gaps occurred due to occupational segregation that resulted from enacted job reservation, as opposed to within-occupational wage gaps.…”