Economic History Association

Chinese-Filipino Wage Differentials in Early-Twentieth-Century Manila Author(s): John E. Murray Source: The Journal of Economic History, Vol. 62, No. 3 (Sep., 2002), pp. 773-791 Published by: Cambridge University Press on behalf of the Economic History Association Stable URL: http://www.jstor.org/stable/3132555 . Accessed: 21/07/2011 02:15
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Chinese-Filipino WageDifferentialsin Manila Early-Twentieth-Century

E. JOHN MURRAY
are Racialor ethnicwage differentials commonin labormarketscomposedof easily identifiablegroups. This articleanalyzes a raresource of historicalwage data for labor-market nonwhitepopulations.An American surveyof Manilain 1900revealed that average Chinese wages were about a thirdhigher than Filipino wages. This that to differential appears havebeenin largepartanovertimepremium compensated it reflected Chinese segregation into Chinese for their longer workdays;partly ethnic industries.It is, by contrast,very hardto identify any "pure" higher-paying wage premium.

to V ariationin wages according raceor ethnicityis a well-knowncharacHistoricalevidenceof suchdifferentials teristicof manylabormarkets. or were one of is most plentifulin cases whereEuropeans theirdescendants are the groups;studiesof wage gapsbetweengroupsof non-Europeans few beindeed. This articleexamines historicalevidence of wage differentials and tweenChinesesojourners localworkersin artisanal shopsandmanufactories in Manilaat the turnof the twentiethcentury.Averagewage premia to as ethnicityareofteninterpreted evidence accruing workersof a particular thatthehigh-wageethnicgrouphas somehowgainedunfairlyatthe expense of the low-wage group.The case of the Chinesein Manila,however, indicatesthatlongerhourson thejob andselectionintohigher-paying industries were more importantconsiderations. These characteristics the Manila of Chinesereflectedan efficientsojourning Chinesecameto strategy, whereby the Philippinesspecificallyto workandsave fortheireventualreturn home.
HISTORICALEVIDENCEOF ETHNICWAGEDIFFERENTIALS

Labormarketsconsistingof blacks andwhites in the United Statesprovide some of the best-known examples of wage differentials.In earlyThe Journal of Economic History, Vol. 62, No. 3 (Sept. 2002). ? The Economic History Association.All rightsreserved.ISSN 0022-0507. John E. Murrayis Associate Professorof Economics,Universityof Toledo, Toledo, OH 436063390. E-mail:jmurray@uoft02.utoledo.edu. Three referees for this JOURNAL providedespecially thoughtfuland constructivecriticismthat the For improved article.Universityof Michiganlibrarians kindlyhelpedlocatedocuments. comments or encouragement (intentionaland otherwise) I thank Dan Doeppers, Andrew Godley, Claudio HirschKasper, KrisKeith,Sumner JohnLarkin, Gonzalez-Vega, LaCroix, MaggieLevenstein,Benito CarolShiue,MasaoSuzuki,Werner Jr., Legarda Dave Mitch,Kelly Olds, Ed Ray,GarySaxonhouse, Pierre derEng,Ed Wickberg, seminar van and at Troesken, participants Bowling Green,Michigan,and Ohio State.

773

774

Murray

twentieth-century Virginia,for example,whiteswere paidmoreon average thanblacks in the same occupation,but many firms paid black and white workers in identicaljobs about the same.' Also in Virginiaat that time, modal wages paid to black and white workers were identical, but wage distributions differedsuchthataverage whitewages exceededaverageblack has wages. To explaintheseresults,GavinWright observedthatmuchof the in the South was due to racial segregationby industry.Whites wage gap tendedto work in cotton mills and furniture factories, for example, while in blacks concentrated tobaccofactoriesand lumbermills.2A similarkind the of occupationalsortingcharacterized relativelycompetitivemarketfor whereblacksandPortuguese crewmen, nineteenth-century whaling typically held lower-paying jobs.3 havealsoexamined Economichistorians wage differentials amongAsians andwhites in the United Statesand its territories. and white emJapanese in and Pacificrailroads Washington ployees of the GreatNorthern Northern statewere initiallypaid differentwages for approximately same work.4 the In 1899 whites who were as productiveas Japaneseearneda premiumof abouta third,butby 1911 growingcompetition workershad eliminated for the wage gap. SumnerLaCroixand Price Fishbackhave consideredwage differentials amonga varietyof ethnicgroupsin the Hawaiiansugarindusearnedthe highestwages, and Chineseand Americansand Europeans try.5 workersthe lowest, all of which they attribute lower rates of to Japanese literacyandhigherratesof turnover amongthe EastAsians. By 1910 Filipinos hadbecome an important workersin Hawaii.Their groupof plantation earningsratio-about a third less than Chinese unskilled workers-was similarto thatfoundin thepresentstudy.To some extentthe Hawaiianwage differentials reflectedplantergoals to recruita multinational workforcethat would be difficultto organizeinto unions. Historicalandcontemporary studieshave revealedethnicwage differentials between groupsof East Asians. In Kobe, Japan,lower Koreanwages in 1936 were due almost entirelyto lower levels of education and work workers.Selectionby ethnicityintoparticuexperiencerelativeto Japanese larindustries occurred, Koreans also as in concentrated mining,manufacturA of data ing, andconstruction.6 recentexamination early-twentieth-century has foundthatChineseworkersin theDutchEastIndiesearnedabouta third morethandid local workers.7 Malaysia,anattractive settingfor analysisdue
Evidence." 'Higgs, "Firm-Specific 2 Wright,Old South,pp. 177-95. 3Craigand Fearn,"WageDiscrimination." 4 Murayama, Collusion." "Contractors, 5LaCroixand Evidence" "Migration." and Fishback,"Firm-Specific 6 Saxonhouse,"Working Koreans." 7 Chandra, "Race,Inequality."

Philippine WageDifferentials

775

has to its multiethnic population, beenthe subjectof severalearnings-differential studies, which have found that Chinese incomes exceeded those of Malays and Indians. One influence was the concentrationof Chinese in industriesandcommerce,while Malaystendedto remainin higher-paying and many Indiansworked in public utilities.8A more precise agriculture recent estimatehas indicated a Chinesemale wage premiumof about 16 is percent,in termsof raw averages.Becausethis differential substantially reducedin semiparametric models,the authorconcludesthattherewas "no evidence of ethnic discriminationagainst Malays."9Several significant threadsrunthroughthe literature ethnicwage differentials on between and AmericansandAsians.First,wage differentials betweenidentifiable among groupsof people are common. Second, some of these differentialsmay be dueto segregation ethnicityintoparticular industries. Thirdandin particby the overseas Chinese have generallyearnedmore than locals. These ular, observationscan help guide analysisof the currentdata.
THE CHINESE IN MANILA

Chinese nationalshad tradedand settled in the Philippineslong before A Europeancontact.'1 small numberof Chinese,perhaps5,000, lived near Manila duringmost of the Spanishcolonial era. Believing that a greater supplyof laborwas the key to economicgrowth,the Spanishchangedtheir policies in the mid-nineteenth centuryto encouragegreaterChineseimmigration.Figure 1 shows trendsin the Chinesepresencein Manila.It records an increase in both immigrationand returnmigrationto the late 1880s, followed by a steadydecline over the next decade.As a result,the Chinese to populationin the islands grew from about8,000 at midcentury perhaps the overwhelming of whomwere men, anda little 40,000 by 1900, majority overhalf of whom lived in Manila.Over90 percentof the immigrants came fromFujianprovince,with the remainder fromGuangdong province." The PhilippineChinese worked in many differentoccupations.12 is As well known,they dominatedinter-island retailtradeas well as producand tion of exportablessuch as abaca (hemp), tobacco, indigo, rice, and to a lesser extent sugar.At the otherend of the scale, it is also a commonplace thatChinese"coolie"laborbecamean important substitute local corvee for
8 Ikemoto,"IncomeDistribution." 9 Schafgans,"EthnicWageDifferences," 499. p. Chinese;andChen, ChineseMigrations. 'oPurcell,Chinese;Wickberg, " Wickberg,Chinese;and Doeppers,Manila. 12Wang,ChineseOverseas,notesa divisionof overseasChinesein generalintomerchants tripartite and laborers (huashang),workers artisans (huagong),andunskilled (kuli).Thepresentstudyis primarwithhuagong.Collectivelythesegroupsformed huaqiao,a commontermforChinese the ily concerned sojouring abroad.

776
14,000 Chinese entering Manila - Chinese departingManila 12,000 - - -Net Chinese migration

Murray

10,000 8,000 -

6,0004,000 \

I\
2,000 --/

y
/

^ ^
\. .

\ I

1 o-

,\

II \
. 1885

I
. 1890

-2,000 1875

1880

1895

1900

1 FIGURE

CHINESEMIGRATION AND FROMMANILA, 1875-1903 TO of (annualnumber migrants) Notes and Sources:Data up to 1898 show migration between Amoy (Xiamen) and Manila (as in after1898,Chinese ChineseLabour and arrivals departures Mencarini, Question"); "Philippine through Manila(Clark,"Labor notesthathis dataarebiasedlow becausethey Conditions," 859). Mencarini p. omitthe Manila-HongKongtraffic,forwhichhe could findno data,but this was a farless important routefor Chineseimmigrants thanthe Amoy-Manilaroute.

laborin roadbuilding.13 Less well understood thatmanyPhilippineChiis nese laboredin a broadrangeof skilled and semiskilledtradesbeyond the merchant coolie. EconomicforcesbroughtmanyChinese and stereotypical tradesmento the islands. Wages for a variety of artisanaltrades in and around Manilaexceededthosein Amoy,theportthrough whichmostPhilipChinesehad emigrated, a factorof two or more.14 Once the Spanish pine by had openedup immigration the islands,Chinesetradesmen all the into had incentivethey neededto trytheirluck there. InMarchandAprilof 1900, newly arrived Americanofficials conducted a labor-market modeledon those carriedout at home.'5The survey survey
3 Arensmeyer, "ChineseCoolie LaborTrade." of 4U.S. Department State,Labor,pp. 313-15, 342-47. Instituin of The results of "Prices Commodities." Smithsonian Thesurvey appear U.S. Bureau Labor, American the tionrequested a longtime that resident thePhilippines, of ColonelF. F. Hilder, direct survey. TheSmithsonian of wanted makethefindings thesurvey of anexhibit theupcoming to at Pan-American part the describes Pan-American exhibitandCol.Hilder. Exhibit," Hamson,"Philippine Exposition.

Philippine WageDifferentials

777

reacheda broad cross-sectionof workingManila.Data on 664 establishments in 69 industries,employing22,155 men, women, and childrenwere The 13,620 men formedabouta one-in-tensampleof Manila's reported.'6 The men,who numbered131,659 in the 1903 census.'7 most commonoccuwere "masters" = 653) and "workmen" = 8,681). Anecdotal (n (n pations informationconfirmsthat a large shareof Manila'slaborerswere general workerswho did not specializein a particular craft."Industry Manilahas in not yet reachedthe degreeof... specialization foundin the United States," to the survey report."Theworkmanin many establishments is according to accustomed performany sortof workthathe maybe calleduponto do."18 Otheroccupational categoriesincludedsemiskilledworkers,skilled craftsmen, and apprentices.19 The surveyreported wages in termsof dollarsper day for some workers, and dollars per month for the rest. An ideal wage measurewould report moneypaidperunitof timeworked.Forworkerspaidby the dayI estimated this by dividingthe daily wage by hoursworkedper day,which yielded an for hourlywage estimate.Unfortunately, workerspaidby the monthit was notpossibleto estimateearnings unitof timeworkedbecausethe survey per didnotreport estimatesof days workdays week ormonth.Contemporary per workedper week variedsubstantially, from fourto six, andmay well have variedsystematicallyby ethnicity.20 what follows I shall analyzehourly In of dailyworkers,andreferto monthlywages for contextor corrobowages ration.A second unfortunate omissionfromthe surveywas dataat the firm level. As a result,I could not determine whethera given firmpaid different wages to workersof differentethnicitiesfor essentiallythe same work. Wages consisted of cash and in-kindpayments.All workers reported receiving some cash for theirwork. A few Filipinosandwhites, andmany Chinese,also receivedin-kindpaymentsof room andboardas partof their room and compensation.For some low-paidworkerssuch as apprentices, boardconstituted largeshareof overallearnings. set a cashvalue on the a To in-kindpaymentsI reliedon reportsin contemporary publications.Rentfor
6 Given the nearlyuniversalone-to-onerelationship betweenthe numberof establishments an in and inferenceis thateach establishment a was industry the numberof masterssurveyed,a reasonable owned and operated the master. Legarda, See proprietorship by Afterthe Galleons. 17 U.S. Bureau ofthe Census,Census,Volume Population,p. 210. Thetotalpopulation Manila, II: of to according the 1903 census,was 219,952. U.S. Bureauof Labor, 18 "Prices Commodities," 30; see also Clark, of "Labor p. Conditions," 737. p. black'9Semiskilledworkersincludedbox fillers,box finishers,andsorters(in the cigarindustry); smith'sandcarpenter's and workers.Skilledcraftscoachmen; helpers;clothworkers; ladlers; leather men includedblacksmiths, carpenters, cigarmakers, foremen,molders,and cigarrollers,compositors, painters.Engineerswere includedwith masters.All childrenand apprenticeswere categorizedas Whilewomenwere includedin the survey,they arenot analyzedherebecauseonly 22 of apprentices. the8,521 womenin the samplewereChineseandtheoverwhelming of (83 majority percent) allwomen were concentrated a single industry, in tobaccoprocessing. 20 Clark,"Labor "Labor Conditions," 866; andBeardsley, p. Conditions," 542. p.

778

Murray

a single-roomtenementin Binondo, the Chinese districtof Manila, was to reported be $6.00 per month.The value of boardin a workerdistrictof Manilawas reportedas $0.25 per day, which was addedto the wage for reductions thosereceiving thosereceivingthreemeals,withproportional for one or two meals.21 Because this board allowance was close to the only valueof food promisedChinesesojourners the DutchEastIndiesaround in to be a reliablevaluation.22 1920-$0.30 per day-it appears The Americans who conductedthe survey described respondents as or Whitesprobably includedbothSpaniards "native," "Chinese."23 "white," were MalayFilipinos and andAmericans,andpresumably most "natives" were sojourners who had been born in China and would most "Chinese" eventuallyreturnthere.Whichcategorywas used for Spanishand Chinese mestizos (mestizoespanol andmestizosangley)is not clear.Chinesemestizos had been a numerousand economicallyimportant class for centuries. But in the 1903 census, less than 1 percentof men in Manila identified the themselvesas mestizos.Inallprobability, censussubsumed bothmestizo groupsunderthenew category"Filipino," previouslyusedto describecreole andhenceforth usedto describeall personsbornin the islands.24 Spaniards, It appearsthatthe accuracyof the economicdatain the surveywas quite good, though there is no way to know for sure. Victor Purcell, who had auditedChinesebooks in Penangin the earlytwentiethcenturysome years beforejoining the Cambridge historyfaculty,assertedthataccountskeptby were generallysimple to follow.25 Chineseshopkeepersand entrepreneurs One way to assess the accuracyof the surveyis to compareit to contemporarysources.The U.S. PhilippineCommissionconductedthe 1903 census with full Filipino participation, enumerators. includingChinese-speaking Given the tumultof the years 1896-1905, it appearsto have been "as good a countas was possible at the time,"by one scholarlyassessment.26 Table1 the shareof Chinese in the workforcesof variousindustries,and displays their averagewages, from the two sources. Data from the sources are in
here are the same as in the survey, Clark,"LaborConditions," 838-39. The units reported pp. U.S. dollars,which tradedat approximately dollarto two silverMexicanpesos (the one namely,gold standard on currency the islands). 22Rationsin the DutchEastIndies(given in Chen,ChineseMigrations, 66) were approximately p. 4 oz. eachof fish and freshvegetables,2 oz. eachof salt fish and freshbeans, 1 oz. of lard,and 2.25 in lbs.ofrice. TheManilaprices thesefoodstuffsappear U.S. Bureau Labor, of of "Prices Commodiof ties,"pp. 30-31. 23 Relativeto theirsharein the 1903 censusof 16 percent Manila'spopulation, of the Chineseshare in in the surveyof 34 percentindicatesoversampling. 1 percent,whites were undersampled the At surveyrelativeto their5 percentin the census. 24Doeppers,"Evidencefromthe Grave," 272. See also Wickberg, Chinese,p. 31, who describes p. Chinesemestizosas a particular groupof Filipinos,in contrastto the rest of SoutheastAsia, where mestizoswere seen as a particular type of Chinese. 25Purcell,Chinese,p. 632. 26 QuotefromNormanOwen in Doeppers,"CivilRecords," 361. p.
2

Philippine WageDifferentials
1 TABLE IN INDUSTRYCHARACTERISTICS THE 1900 SAMPLEAND 1903 CENSUS ShareChinesein Workforce (percentage) Industry 1900 Sample 1903 Census

779

AverageMonthlyWage (dollars) 1900 Sample 1903 Census

7.06 n/a 6.70 100.0 Trunk making 8.26 "dominance" 9.01 100.0 Furniture factory 6.89 93.4 75.8 8.09 Shoe factory/makers 7.91 10.76 88.8 "majority" Soap factory 8.01 6.90 86.9 27.2 Tin shop or tinsmiths 12.20 90.1 9.34 83.6 Lumber milling 3.1 11.07 12.79 43.2 Metalfoundries& machineshops 56.8 8.73 8.63 34.7 Confectionery 0.2 10.91 6.34 10.3 making Cigar/cigarette 11.46 9.1 7.2 13.63 Photography 27.8 6.92 6.89 8.6 Bakery 12.25 4.2 2.5 13.83 factory Carriage/cart/wagon 12.1 11.28 9.30 0.5 Tailor shop 2.0 12.37 16.62 0.0 Printing 14.50 0.0 1.8 13.00 Hatmaking 12.45 0.0 12.50 0.8 Harnessmaking 0.0 11.68 8.30 0.0 Bookbinding 20.20 14.93 0.0 0.0 Lithography Sources:U.S. Bureauof Labor,"Pricesof Commodities"; U.S. Bureauof the Census, Census,vols. II (Population)pp. 1003-04, and IV (Agriculture, Social, and IndustrialStatistics),pp. 506-09. Furniture soap assessmentsarefromWickberg, and Chinese, 109-10.

general agreement,and accord with descriptionsfound in the historical literature. According to many sources, most soap makers,woodworkers, and in carpenters, buildingtradesmen generalwere Chinese.7 If the 1900 of was as representative Manilaas these similaritiessuggest, surveysample then it deserves furtheranalysis,given the dearthof historical studies of wage differentials amongnonwhitegroupsin general,andthe Chineseoverseas and theirneighborsin particular.
EARNINGS OF CHINESEAND FILIPINOSIN MANILA

To comparewages by ethnicitya good place to begin is with the simple, raw averagesthatthe 1900 surveyyielded (Table2). Accordingto the survey, the averagemonthlyand daily wages of Chineseworkerswere about 50 percenthigherthantheirFilipinocounterparts'; comparison hourly but of to wages cuts the Chinesewage premium just 15-20 percent.Averagewhite were far above the rest. It remainsto be seen how wages, unsurprisingly, muchof these wage differenceswas the resultof compositionaldifferences
27Wickberg, Chinese, pp. 109-10; Clark, "Labor Conditions," pp. 810-17; and U.S. Philippine

Commission, Report,p. 156.

2 TABLE IN OF CHARACTERISTICS THEMANILAWORKFORCE 1900, BY PAYPERIODAN Workers Paid per Day Filipino Numberof observations Totalnumberof workers Averagedaily wage ($) Averagehourlywage ($) Averagemonthlywage ($) Masters(percentage) Craftsmen (percentage) Semiskilled(percentage) Workmen (percentage) (percentage) Apprentices Shareof workerson 8-hourworkday(percentage) Shareof workerson 10-hourworkday(percentage) Shareof workerson 12-hourworkday(percentage) Shareof workersin monoethnicindustries (percentage) deviationsarein parentheses. Note: Standard Source:U.S. Bureauof Labor,"Pricesof Commodities." 3 40 18 39 0.6 99.6 0.4 0.0 6 5 2 2 87 4 24 75 0.4 50 95 0 0 5 0 95 5 0 0 4 24 11 59 2 69 31 0.1 24 186 5,108 0.44 (1.10) 0.055 (0.14) Chinese 138 3,179 0.63 (1.22) 0.065 (0.12) White 19 21 2.07 (1.29) 0.26 (0.16) All 343 8,309 0.52 (1.31) 0.06 (0.14)

Fili

299 3,701

12 (21

5 12 3 73 1

90 3 7

Differentials PhilippineWage

781

among ethnic groups. Consider, for example, occupational categories: amongworkerspaidby the day,61 percentof Filipinoswere relativelywellor paid semiskilledworkers,skilledcraftsmen, masters,while 91 percentof Chinesewere relativelypoorlypaidworkmenor apprentices. Amongworkers paid by the month, occupationaldistributionswere similar for both who were likelierto be FilipinothanChigroups(except amongcraftsmen, The greatmajorityof whites were masters;no whites were apprennese). tices or semiskilledworkers. To control for these variables, I estimatedseveral regression models (Table 3). The regressandin each model was the log of either hourly or monthlywages. The resultsfor workerspaid daily appearin Models 1, 2, and 3, andthose for workerspaidmonthlyin Models 4, 5, and 6. The techwith theweightfor eachobservation niqueusedwas weightedleast squares, set equalto the numberof workersin it. To drawout effects of ethnicitythat effects, I createda series of dummyvarimightbe maskedby occupational ables. The first groupincludedfouroccupational variables,with workmen the omitted category.The next group consisted of all five occupational variablesinteractedwith a dummyset to one for observationsof Chinese the definedforoccupations interacted with workers; lastgroupwas similarly a white dummy.Thus, the first groupshows occupational structures wage for Filipino workers,the second set shows the marginaleffect of Chinese ethnicitygiven occupation,and the thirdset shows the marginaleffect of white ethnicitygiven occupation.The models also included a continuous variablefor the numberof firmsin an industry, a roughmeasureof moas nopsonyor monopolypower.Models 1 and4 includedall these regressors, but no others.Models 2, 3, 5, and6 introduced dummyvariablesfor length of workday; Models 3 and6 further addeddummyvariablesfor each indusand for industrieswith monoethnicworkforces. try, The estimatesin Models 1 and 4 confirmthe patternfound in the raw averages.Controllingfor occupation,the ManilaChinesetypically earned more thantheirFilipino counterparts. Among workerspaid daily,Model 1 shows largeandstatistically significantChinesewage premiathatwerepaid to workmen(33 percent),semiskilledworkers(52 percent),andapprentices earnedapproximately same the (82 percent).Chinesemastersandcraftsmen as theirFilipino counterparts. the monthlywage regressions,which sufIn fered from the omission of days (and hence hours)workedper month, all Chineseworkers except the semiskilledwere paid significantlymore than whites earnedsignifiFilipinosin the same occupation.In all specifications cantly more than Filipinos in the same occupation.Pairwise tests not remorethanChinese portedhere also showedthatwhites earnedsignificantly in nearlyall occupations. Wagepremiaforwhiteworkmenwere inconsistent withthereputation Americans acquired on-the-jobdrunkenness that had for

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Murray
3 TABLE DETERMINANTS WAGERATES OF variable: wage) (dependent log HourlyWage Variable [1] [2]
(0.09)

MonthlyWage [3] [4] [5] [6] 2.38*** 2.37*** 2.21*** (0.04) (0.28) (0.05) 0.75*** (0.12) 0.14 (0.09) 0.07 (0.09) omitted -1.39*** (0.I1) -0.03 (0.22) 0.30** (0.12) 0.07 (0.14) 0.26 (0.19) 1.47*** (0.22) 0.82*** (0.14) 1.47*** (0.17) 0.47* (0.26) omitted 0.27 (0.20) 0.06 (0.09) -0.002 (0.001) 0.82*** (0.06) 0.22*** (0.08) 0.09 (0.11) omitted -1.37*** (0.08) -0.60*** (0.14) 0.06 (0.09) -0.08 (0.I1) -0.14 (0.13) 0.95*** (0.15) 0.78*** (0.09) 1.50*** (0.18) 0.64*** (0.07) omitted 0.68*** (0.11) 0.16 (0.22) 0.01 (0.02) 0.10 (0.16) omitted Yes 479 0.60 0.55

Intercept

-3.07*** -3.05***

-3.06*** (0.11) 0.95*** (0.10) 0.53*** (0.16) 0.05 (0.18) omitted -0.76*** (0.19) -0.63*** (0.13) -0.34*** (0.11) 0.01 (0.15) -0.16 (0.12) 0.31* (0.17) 0.41*** (0.15)

(0.10) and Worker job characteristics Masters 1.05*** (0.14) 0.42*** Craftsmen (0.13) Semiskilled -0.03 (0.15) Workmen omitted -0.72** Apprentices (0.19) * -0.13 Chinese masters (0.I1) * 0.17 Chinese craftsmen (0.17) * Chinese semiskilled 0.52*** (0.15) Chinese- workmen 0.33** (0.13) * Chinese apprentices 0.82*** (0.19) White?masters 0.57*** (0.17) White ?craftsmen White?workmen 8-hourworkday 10-hourworkday 12-hourworkday

0.78*** (0.09) 0.12 (0.08) 0.06 (0.09) omitted -1.40*** (0.I1) 0. 19** (0.09) 0.37** (0.16) 0.15 (0.19) 0.46*** (0.08) 1.73*** (0.11) 0.81*** (0.11) 1.47*** (0.17) 1.00**' 0.99*** 0.44*** 0.60*** (0.10) (0.09) (0.13) (0.18) omitted omitted 0.50*** 0.24* (0.13) (0.13) 0.35* 0.45** (0.18) (0.19) -0.005** (0.002) 0.015* (0.008) 0.16 (0.13) 0.47** (0.23) omitted Yes 343 0.66 0.59 -0.001 (0.001)

1.04*** (0.14) 0.43*** (0.13) -0.03 (0.15) omitted -0.73*** (0.19) -0.57*** (0.17) -0.24* (0.14) -0.09 (0.16) -0.04 (0.16) 0.36* (0.22) 0.57*** (0.18)

characteristics Industry Numberof firmsin industry -0.004 (0.002) All-Chineseworkforce All-Filipinoworkforce Multi-ethnic workforce dummies? Industry Numberof observations R2 AdjustedR2
*=

No 343 0.39 0.37

**
-

No 343 0.51 0.48

No 479 0.45 0.44

No 479 0.47 0.45

-

Significant at the 10 percent level.

Significant at the 5 percent level. "

Significant at the

1 percentlevel. indicateduse of asymptotically consistentstandard Notes: Whitetests for heteroskedasticity errors, of in Methodusedwas WLSwithweightsequalto number workersin each which appear parentheses. observation.

Philippine WageDifferentials

783

The andheat exhaustion.28 remainderof this articlewill focus on the Chinese-Filipino wage gaps. Fromthis perspective most important the sourceof the Chinesewage premiumwas theirwillingnessto workmorehoursperdaythanFilipinos.Model 2 included for and dummyvariables 10- and12-hour workdays, was estimated withtherelatively Model1 to Model high-quality hourly wagedata. Comparing inclusion controls lengthof workday of for the reduced magni2, substantially tudeof the Chineseinteraction coefficient eachoccupation. for Amongmasters andcraftsmen, werepaidsignificantly thanFilipinos, Chinese less after controlThe magnitudes the gap-24 percentless for of ling for hoursper workday. craftsmen 57 percent formasters-are economically and less Likemeaningful. eliminated whathadbeen quitelarge wise, controlsfor lengthof the workday ethnicwage gapsthathadfavored Chineseamongsemiskilled the and workers workmen.Even the magnitude the gap amongapprentices reof was general ducedby morethanhalf. The samebasicpattern muchsmallerwage gaps of aftercontrollingfor hoursper day prevailed amongmonthlyworkers.After for for controlling lengthof theworkday,the Chinesewage premium masters 19 percent) vanished thatforworkmen and 46 percent) (previously (previously was halvedin magnitude becamestatistically and insignificant. Othersourcesconfirmthe attribution Chinesewage premiato overtime of bonuses.Inthe hourlywage regressions, statistically significantcoefficients of the 10- and 12-hour-workday dummiesin Models 2 and 3 suggest that thosewilling to workovertimecould earnsubstantial bonusesof 25 percent or more. Since nearlyall Filipinoswho were paid daily workedeight-hour of days, andthree-fourths Chineseworked10-hourdays (Table2), it stands to reason that the prime beneficiariesof such overtimebonuses were the Chinese. The PhilippineChinese may have broughta custom of working long dayswith themto Manila.By one contemporary estimate,blacksmiths, and boilermakers, machinistsas well as simplelaborersin tur-of-the-centurymachineshops worked 11 hoursper day in Hong Kong, but only 9.5 hoursper day in Manila.29 Filipinoswere certainlyawareof Chinesepracof tice, becausethey complained bitterlyof routineChinesedisregard eightlaws.30Duringthose longer days Chinese laborersinsisted hour-workday upon double pay for overtime from American employers, but Filipinos Overtimepremia,then, formedan establishedpractice generallydid not.31 that would account for much of the disparityin wages between the two
ethnic groups.32
29

28 Clark,"LaborConditions," 797, 819. pp.

Ibid., p. 820.

30 Purcell,Chinese,p. 634. 31U.S. Department War, of AnnualReports,vol. X, part 1, p. 159. 32 Inperfectlycompetitive labormarkets, determine output priceandlaborproductivity wages.Inthe effectsof outputpriceandsome effectsof labor presentstudy,dummyvariablesfor industry captured

784

Murray

characteristics. The otheravailablecontrolvariableswere industrial Seas has lectionby ethnicityintoparticular industries, notedpreviously, played an important in severalhistorical role labor-market settings.Here,inclusion of dummyvariablesfor each industryand for industrieswith monoethnic workforceshadmixed effectson ethnicwage differentials. Amongworkers for (Model3) hardlychangedthemagnitudes paiddaily,controlling industry of theChineseinteraction coefficients,whichsuggeststhathoursworkedper day was a greater influence on wages than was industrialsegregation. Among masterspaid monthly,inclusionof controlsfor industry(Model 6) induced a 60-percentwage differentialfavoring Filipinos; in this group roles in bothplayedimportant lengthof workdayandindustrial segregation craftsethnicwage differentials. Aftercontrollingfor industry, determining men of bothethnicitieswho werepaidmonthlyearnedessentiallythe same; in thus, the greaterwages of Chinesecraftsmen Models 4 and 5 was likely due to segregationinto higher-paying industries.In the otheroccupational of workerspaid monthly,inclusionof industrial variableshad little groups effect on wage differentials. in Therewere a few industries whichworkforces were wholly Chineseor betweenall-Chineseandall-Filipinoinduswholly Filipino.Wagesdiffered tries.Nearlyhalf (44 percent)of the Chinesein the Manilasampleworked in all-Chineseindustries,which paid above-average wages. Daily workers of all occupationsin all-Chineseindustriesearnedon average$0.074 per hourandmonthlyworkers$21.21 permonth,compared overallaverages to of $0.060 perhourand$14.43 permonth.Industries with multiethnic workforcespaid ChineseandFilipinoworkersequallyby the hourat $0.055, but monthlywages for Chinese($16.44) exceededthe $12.01 earnedby Filipinos; this could have been due to differencesin hours worked per month. Ethnicallyhomogeneousindustries may have resembledmonoethnicfirms in multiethnicindustriesin differentemphaseson qualityand quantityof product.In furniture makingand cigar making,for example, the Chinese were supposed to have produced relatively cheap, low-quality goods quickly,while Filipino goods were more expensive, of higherquality,and Such productionstrategiesmay have influrequiredmore time to make.33 enced wages if one or the othergroupworkedwith differentquantitiesor vintagesof physicalcapital. Hourly and monthly wage differencesbetween Chinese and Filipino differences.The magniapprentices probablystemmedfromdemographic
laborproductivity day,but mayhave had a diminishing per productivity. Longerworkdaysincreased effectin termsof productivity hour.InModels2, 5, and6 thepremium paid fora 12-hour marginal per betweenthe coefficientswas statistically day, workdaywas less thanfor a 1O-hour andthe difference of workerexhaustion reducedthe marginal productivity significantamongmonthlyworkers.Perhaps hours 11 and 12 below thatof hoursnine andten. 33Wickberg, Chinese,p. 110.

Philippine WageDifferentials
25 -

785

20 -

Filipino Chinese

5-

10

20

30

40

50

60

70

80

90

100

Startingage of 5-year age group

2 FIGURE AGE DISTRIBUTIONS OF MALE POPULATIONS IN MANILA, 1903

Sources: U.S. Bureau of the Census, Census: VolumeII: Population, table 18, p. 387.

tude of premiapaid to Chinese apprentices was reducedby inclusion of controls,butthe wage gapremained significantin all specificationswithout to pay period.Muchof this gapmusthavebeen an age premium.The regard flow of Chinesesojournlaborconsistedlargelyof prime-agemales, which of is illustrated the age distribution ChineseandFilipinomales in Manila by in Figure2. About a quarter Filipinomales in Manilawere underage 14, of but only about2 percentof the ManilaChinesewere thatyoung. Relatively small age differencesof two or threeyearscould have led to largeproductivity-and hence wage-differences amongteenageboys. To assess the relativestrengthsof all these factors,Table4 presentsthe results of simple wage decompositions,in which wages were estimated using the coefficients from a pooled wage regressionand the mean values of one groupor the other'scharacteristics.34 thatpredictedwages were Note the biasedslightlyhigh,whichpreserved magnitude thewage differentials of in all cases. The occupationaldistributions shown in Table2 indicatethat Chinesewere less likely thanFilipinosto hold well-payingjobs as crafts34The small number of observations in some cells precluded the use of separate regressions for daily and monthly workers. Coefficients for the decomposition came from a pooled regression in which workers paid monthly were assumed to work 26 days per month. See also Oaxaca and Ransom, "Identification," for theoretical justification.

786

Murray
4 TABLE

WAGEDECOMPOSITIONS FROMA POOLEDREGRESSION HourlyWage Estimated averageChinesewage Chinesewage Predicted Predicted wage if Chinesehad insteadthe distribution Filipinooccupational distribution Filipinoindustrial distribution Filipinohours-per-day Estimated averageFilipinowage Predicted Filipinowage Predicted wage if Filipinoshad insteadthe Chineseoccupational distribution distribution Chineseindustrial Chinesehours-per-day distribution Sources:See the text. 0.061 0.065 0.089 0.041 0.051 0.051 0.055 0.041 0.075 0.061 MonthlyWage 17.08 17.89 18.06 14.04 11.53 11.04 12.01 10.44 13.44 16.36

men, andthatChinesewere more likely to be relativelypoorlypaid workmen. The decompositionsuggests that had the Chinese worked 8 and 10 hourdays in the sameproportions Filipinos,or hadthey been distributed as acrossindustriesin the same proportions Filipinos,the wage gap would as have shrunksubstantially. the otherhand,hadthe Chinesebeen distribOn uted acrossoccupationsin the sameproportions Filipinos,the wage gap as Chineseworkerswouldhavebeeneven larger. Amongdailyworkfavoring to ers,industrial segregation appears havecausedabouttwice as muchof the as hours;amongmonthlyworkers,hoursseems to have inducedtwice gap as muchof the gap as did selectionby ethnicityintoparticular industries. By eitherreckoning,selectionintoparticular industries accounted a substanfor tial shareof the ethnicwage differential.
OTHER INFLUENCES ON WAGES

constant, by Holdinglengthof workdayandethnicconcentration industry this section proposes some explanations to why the hourlywage for an as eight-hourday of Chinese mastersand craftsmen(Model 3) and monthly less wage for Chinesemasters(Model6) were significantly thanthe Filipino wage for the same occupations. Differencesin levels of humancapital,suchas literacyorjob tenurecould have played an important here. The value of literacy could have been role director indirect.Directly,literatemastersand craftsmencould readblueprints, instructionmanuals, or timetables,and their literacy might have advanenabledsmootheradoptionof new technologies.The recordkeeping And in of literacymight have been especially useful for proprietors. tages fact, accordingto the 1903 census, literacywas more commonamongFili-

PhilippineWage Differentials

787

of pino menthanChinese:aboutthree-fifths Filipinomen aged 15 andolder to claimedto be ableto readandwritein anylanguage,compared just under This 15-percentage-point half of Chinese men.35 differencecould explain some of the wage gap amongmastersandcraftsmen. levels ofjob-specific humancapitalamongFilipinomastersand Greater to craftsmencould have contributed their higher wages. In a developing with few formalinstitutions human-capital for transmission such economy as schools or formalapprenticeships, on-the-jobtrainingis criticalfor the transmission humancapital.The averagelevel of such trainofjob-specific ing in a workforceis a functionof tenureof employment(or its reciprocal, In turnover). the early-twentieth-century Philippines,turnoveramongChinese workerswas quitehigh. Inkeepingwith the conventionalwisdom that the overseasChinesewere sojourers, DanielDoeppershas concludedthat Chineseoccupational turnover rateswere muchhigherthanthose of Filipinos earlyin the twentiethcentury.36 example, in 1894 only 16 percent For of the ManilaChinesehadbeen in the Philippinesfor morethanfive years, and in Cebuthe medianstay of Chinesewas only threeyears. factordeservesspecialmention,in partbecauseit appears Onequalitative in so frequently the contemporary and literature, in partbecause it was the of a widely cited articlein this JOURNAL: subject namely,variationin work If effort.37 one groupor the othersimplyworkedharder, theirwages would have reflected such productivitydifferences.The evidence requiressome care in interpretation. Opinionsof employersin the printedrecordfell into two opposing categories.PrivateAmericanemployersgenerallydescribed the Chinese as harderworkers.The operator a shippingfirm noted that of "we invariably the Chinamen few centsper daymorethanthe native a paid as thatwas necessaryto securetheirservices,"which implies a marketpremium earnedby greaterproductivity.38 Manilaand DagupanRailway The blacksmiths1.5Mexicansilverpesospernine-and-a-half-hour paidordinary earned pesos for a workdayof the two day,butspecifically"Chinesesmiths" samelength.39 differences stillhavehadinstitutional rather Productivity may than culturalbases. The Manila and DagupanRailway general manager describedintenseChinesework effortwhen paidpiece rate,but those Chi35 U.S. Bureauof the Census, Censusof the PhilippineIslands,vol. 2, pp. 674-75. Literacyrates amongFilipino and Chinesemen differedlittle fromthose in easternand southernEurope(Cipolla, Literacy,pp. 17, 127). 36 Selection,andTurnover," 396. Doeppers,"Destination, p. 37On work intensityworldwideat this time,see Clark,"WhyIsn't the Whole WorldDeveloped?" Consistentwith GregoryClark'sevidenceon looms per weaverin cottontextiles worldwide,Victor Clark cottonmilloperated Conditions," 809) notedthatFilipinoweaversin Manila'slargest ("Labor p. "onlyhalf as many looms as Englishoperatives." 38Beardsley, "LaborConditions," 542. p. U.S. Bureauof the Census,Censusof thePhilippine 39 Islands,vol. IV,p. 444. In eachcase thework week was reported be six days. For moresuch claimssee Clark,"LaborConditions," 812; and to p. U.S. WarDepartment, AnnualReports,vol. X, pp. 177, 257-58.

788

Murray

nese workers who were paid by the day "won't do anything,"he comMostprivateemployersseemedglumlyresignedto the inevitabilplained.40 restrictions Chinese.41 on of immigration ity By contrastthe civil governor,William HowardTaft, was in his own words "emphatically opposed to the generalpolicy of admittingthe Chinese."42To build supportfor extendingthe ChineseExclusion Acts to the TaftqueriedU.S. Armyemployers civiliansaboutthe quality of Philippines, of their workforces.Accordingto Army commentators Filipinos were so industriousthat Chinese workerswere redundant. The officers dutifully and described Chineseworkersas incessant opiumsmokers,less productive, at the same time quickto demandsuchpay increasesas any higherproducAll tivity wouldjustify.43 told, privateAmericanclaims thatChinesewere moreproductive workersthanFilipinosseemmorereliable.If the businessmen were accurate,greaterChinesework intensitycould have countered and Filipinohuman-capital advantages, therebyplayed a role in the rough workmenandsemiskilledworkers,holdinghoursand wage equalityamong industrial characteristics constant.44 CONCLUSIONS amid Manila at the turn of the last centuryfaced domestic uncertainty relativeprosperity.Internally, PhilippineInsurrection, the begun in 1896, had driven many countrypeople into Manila and many Chinese back to the China.Americanintervention only intensified conflict.How thoroughly and how soon the Americanswould enforceimmigration restrictionswas unknown.In the spiritof the 1882 ChineseExclusionActs, in 1898 Governor Taft's predecessorElwell Otis issued the famous "Otis Order"that into As restrictedChinesere-immigration the Philippines.45 Figure 1 sugto gests, migrationto andfromChinaboth declinedin its wake. Compared theirneighbors,the Philippineswere thriving:real wages were one-fourth higher higherthan in Burmaand the Dutch East Indies, and three-fourths In andmanufactories Manilain the of thanin Thailand.46 the artisanal shops springof 1900, Chineseworkerswere earningon averagewell above what were being paid. The Chinese wage premium their Filipino counterparts
40U.S. Bureauof the Census,Censusof the PhilippineIslands,vol. IV,p. 430. 41 Clark,"Labor Conditions," 820. p. 42 U.S. Bureauof the Census,Censusof the PhilippineIslands,vol. IV,p. 431. 43U.S. WarDepartment, AnnualReports,vol. X, pp. 159-76. 44 Two otherfactors thatseemnot to haveplayeda rolein wage differentials includetradeunionism see andphysicalstrength(as expressedby heightandweight). On the former, Clark,"LaborCondiManila Workers' Unions.On the similarbody size of Filipinoand tions,"pp. 842-44, andKerkvliet, Chinesemen, see Murray, "Stature Body Mass"and"HeightandWeight." and 45Wong,Chinese,pp. 28-29, 71-73; andClark,"Labor Conditions," 820. p. 46Wong,Chinese,pp. 26-27; andWilliamson, table 1. "Globalization,"

Philippine WageDifferentials

789

reflectedtheirwillingnessto worklongerhours-and perhaps workhardto er during those hours as well-and their concentrationin higher-paying industries. Itis worthspeculating whetherthe labor-market experienceof the Manila in Chinesewas typicalof overseasChinesein general.Concentration a few industrieswas common amongoverseasChinesecommunitiesthroughout between Chineseworkersand ChineseSoutheastAsia. Mutualattraction owned firms economizedon migrants'searchcosts and on the cost to emA ployersof estimatinga worker'sfutureproductivity. strategyof intensive laborduringlong workdaysabroad,in orderto save for an eventualreturn Almost by definitionthey would have home, was efficient for sojourners. considered savings while sojourningmore importantthan consumption, relativeto local laborers.In thatsense, the purposeof work for sojourners and locals may have differed,andthus led to differentwage patterns. In broaderterms, the overseas Chinese representan unusualcase of a minoritygroup that has earned higher wages, on average, than the local majority.While rare in the Philippines,anti-Chineseviolence spurredby has simpleenvy of Chineseprosperity beencommonelsewherein Southeast Asia.47Such prosperityin turn-of-the-century Manilaseems to have been due largelyto the willingnessof Chineseto worklongerhours.No evidence indicatesthat Chinese workersfound their way into remunerative sectors deviousmeans.To the extentthatethnicwage differentials some in through ultimatesense reflectedworkerpreferences betweensavingsandconsumpit is important recognizethatsuchwage differentials arisefrom to can tion, innocentsources.
47Chandra, "Race,Inequality."

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This in a Competitive Industry:Evidence from the AmericanWhaling Industry."

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