1 Globalisation and Wage Inequality: A Comparison of the

The economic position of low-skilled workers relative to high-skilled workers has worsened in many industrialised nations since the late 1970s. This paper compares Canada and the United States in terms of the evolution of the relative wages of production and non-production workers in the manufacturing sector between 1970 and 2001. The independent variables of the analysis include R&D expenditures, union density, imports from developing countries, immigration, capital labour ratio, and number of workers in each group. The results show that the wage ratio is affected by similar economic globalisation variables in each country. However, between the two nations, other than technological changes, the overall effect of globalisation is more pronounced in Canada. Among economic globalisation variables such as technological changes and imports from developing countries, the latter has less harmful effect on low skilled workers in the U.S. Among other variables, the wage gap is more affected by the union variable in Canada. The impact of immigration on the wage gap is low in both nations. It is well known that the economic position of low-skilled workers relative to high-skille