Abstract

This paper analyzes the relative roles of wage policy and economic conditions in
wage determination for production workers between 1960 and 1976 in five manufacturing
industries in São Paulo, Brazil. Analysis of three sub-periods considers the direction of the
influence of wage policy on real wages, the observed changes in real wages, and “wage drift”
relative to a predicted wage index based on wage policy. Results indicate that the impact of
the repressive wage policies during the 1965-67 and 1973 “wage-squeeze” periods varied by
size of the firm and ownership and with general economic conditions.

JEL Classification: J31; J38.