The recent debate questioning whether unemployment in the 1970s represents sectoral adjustment or cyclical variation is expanded to examine cyclical and structural causes of real wage variability. Using PSID panel data, wages respond more to persistent sectoral shocks than cyclical shocks in the 1970s, making recent estimates of procyclical wage variability appear weak in perspective. Employing a model of endogenous sector-specific individual skills, older workers earning economic rents are shown to have the greatest wage response to sectoral shocks. These results are consistent with the hypothesis that short-run cyclical shocks may be met with hours adjustment, as specified in implicit or explicit contrasts, but that persistent shocks require wage adjustment.