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us to document the premium that literate and numerate white-collar employees got

relative to illiterate and less numerate unskilled labor. 28 What we offer in this section

is documentation of the behavior between 1828 and 1867 of both the conventionally

measured skill premium, that is what skilled workers in the building trades received

relative to urban common labor, and the premium that white collar clerks and

professionals got relative to those skilled in the building trades. Thus, our data speak

to trends in the gaps between the middle and bottom income ranks of employed

workers, as well as between the middle and the top paid employed workers.

Table 7 shows clearly that Australia was exceptional. First, mechanics,

artisans, and skilled workers in the building trades earned a much higher premium

over common labor in 1828 (2.75 times higher) than in 1867 (1.57 times higher). 29

This quantitative evidence is consistent with the qualitative literature which reports

the complaints of employers and officials that skilled mechanics and artisans were

hard to find in New South Wales and Tasmania in the first three decades of the

nineteenth century (Seltzer 2015: p. 181). So, no rising earnings inequality on that

account. Second, the wage gap between farm labor and urban common labor (the

28 Katz and Margo (2013) use the wages of male clerks hired at Army posts as their proxy fo r US

white-collar earnings. By so doing, they assume there was a Law of One Wage prevailing between

military posts and the private economy (that the two labor markets were completely integrated). We

assume the same between government and private sector jobs. The assumption seems plausible in the

Australian case since the government shares in total employment were so small in those early years.

Finally, we do not have to adjust for differences in days worked per year (higher for white collar),

since, by assumption, we take them to have been constant within occupations over time.

29 We are aware of only one other study that explores the mid-nineteenth century premium of

mechanics over common labor in Australia, Mark Thomas (1991: Figure 6.1, p. 168). While Thomas

uses only pay ratios between urban skilled working class and common labor, for a smaller sample and

for only for 1840 onwards, he also finds no evidence of rising skill premiums in Australia.

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