Explaining Wage Inequality in Telecommunications Services: Customer Segmentation, Human Resource Practices, and Union Decline

Abstract

This study examines factors related to within-occupation wage inequality among service and sales workers in the telecommunications industry. The author draws on a 1998 survey of a nationally representative sample of 354 service and sales centers in the industry to examine the importance of management practices and union institutions in shaping wage variation. The results strongly indicate that business strategies of customer segmentation and human resource practices explain variation in wages over and above that explained by the human capital of the work force. In addition, despite extensive deregulation and de-unionization of the industry, the union wage premium is 22%.