Determinants of wage differentials among firms in Kampala District
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This study examined the determinants of wage differentials among firms in Kampala district, taking firms within Kawempe Division as a case study. The study was guided by three specific objectives namely; to investigate the effect of firm size on wage paid by the firms, to investigate the industry effect on wages paid by the firms, and to investigate the effect of firm’s profitability level on wages paid by the firms. Simple random technique and convenient sampling were employed to select targeted 382 employees from the six industries to participate in the study and a structured questionnaire was used to collect the required data and STATA 15.0 software was used in data analysis. The result of the analysis revealed that the registered a response rate of 89 percent. 50.88 percent of the employees were female. 52.94 percent of the employees were not married. 53.53 percent of the employees were Degree holders, while 2.65 percent had not attained any formal education. 38.82 percent of the employees reported that their firms employed 1 – 10 staffs, 30.29 percent reported that their firms had 21 – 50 employees, 18.24 percent reported employee population of more than 50, and 12.65 stated that they were 11 – 20 in their firms. The study established that the factors that significantly influenced employees’ wages across firms were; firm size, industry, and profitability level of the firm. However, according to the results of the linear regression analysis, only 10.71 percent of the overall variations in the employees’ wages was due to, firm size, industry, and profitability level of the firm. Based on the finding of the study, the researcher recommended that the government through the Ministry of Labor, Gender and Social Development and the Parliament of Uganda should emphasize the implementation of minimum wage in order to improve the quality of lives of employees and also reducing the wage gap between firms. This will help to curb the exploitation of employees by firms.