Centralized bargaining in South Africa led to significant wage increases in mid-sized firms within bargaining councils, affecting the overall wage structure. These wage hikes spilled over to other firms in the same labor market, with more connected firms raising wages more, reflecting monopolistic competition dynamics. The contract changes had varying effects on different firms based on their average wage, reducing the size of low-wage firms but benefiting higher-wage ones. Overall, the negotiated wage increases pushed wages and job structures upwards, influenced by institutional regulations, monopsonistic competition, and firm differences.