Although labour market research is now highly topical, few studies have considered the impact of multinational firms and global competition on labour markets. This study combines an industry level and a firm level analysis on the wage and employment effects of multinational companies, which has not been attempted in any previous work. The author explains how many foreign-owned companies based in the UK pay higher wages in absolute terms than do domestically-owned firms, but not sufficiently high to match their even greater productivity. Hence, for foreign-owned firms the share of wages in output or in total income generated tends to be low. In view of this, important questions are raised regarding how global changes in the structure of production may affect labour markets and the organisation of work in the future.