Abstract
International research findings highlight the important role of institutions in shaping the wage structure of an economy. Evidence from a sample of seven public hospitals in the United Kingdom confirms those findings, suggesting that a more coordinated and centralized system of wage-setting (including extension of public-sector conditions to outsourced workers) improves pay for low-wage cleaners and assistant nurses. Renewal of wage-setting institutions provides a necessary but insufficient foundation for the elimination of low-wage work. Employee investment in skill development, career advancement and skill-based pay require management’s commitment to the design of new, higher-skilled jobs and the strengthening of internal labour markets.