Journal Article

The effect of the growing service sector on wages in Texas

Abstract: In Texas during the 1980s, service-sector employment rose, goods-sector employment declined, and the average real wage increased only slightly. Because service-sector jobs pay lower average wages than goods-sector jobs, analysts have suggested that the growing proportion of jobs in the service sector was an important factor suppressing overall wage gains in the state. ; Keith R. Phillips finds that the increasing share of service-sector jobs only slightly dampened wage growth in Texas during the 1980s. Slow wage growth primarily resulted from weak wage expansion in both the goods and service sectors. Phillips also finds that the shift to service-sector jobs had little effect on wage inequality among workers in the state. While overall wage inequality increased, the increase resulted almost entirely from a large increase in wage inequality in the goods sector and a relatively small increase in wage inequality in the service sector.

Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: Economic and Financial Policy Review

Publication Date: 1991

Issue: Nov

Pages: 15-28