MINIMUM WAGES IN A FULLY EMPLOYED CITY
| Author | E. G. A. Armstrong |
| Date | 01 March 1966 |
| Published date | 01 March 1966 |
| DOI | http://doi.org/10.1111/j.1467-8543.1966.tb00917.x |
MINIMUM WAGES IN A FULLY EMPLOYED CITY
E.
G.
A. ARMSTRONG*
BIRMINGHAM
is
self-evidently a prosperous city. In employment terms
from March
1960~
to December
1964,
the city’s monthly percentage rate
of unemployment averaged
1.6
per cent against
1.9
per cent for Great
Britain. Since
I
955
Birmingham Corporation has had to pay ‘excess rates’ in
order to attract, and more particularly to retain, manual workers.
A
large
coloured immigrant population has been successfully absorbed into the
city’s work force. Labour shortages remain. Indeed
1965
has brought
newspaper advertisements for the
‘&I
,000
a year’ milk roundsman. Given
these conditions, have Wages Councils become redundant in a fully
employed city and by inference in a fully employed society?
To
try and
answer the first part of the question, research begun in Birmingham sets
out to measure (a) the extent of trade union penetration into the city’s
regulated trades: (b) the reactions by employers in these trades to Wages
Regulation Orders as these become effective: (c) the amount of under-
payments in Birmingham recovered by Wages Inspectors during
I
962,
1963
and
1964 (1962
is the earliest year for which it is possible to
separate the Birmingham from the Midlands records). What follows is an
analysis of the last part of this three pointed probe into the role of minimum
wages in a fully employed city.
In the three years under review, the monthly percentage rate ofBirming-
ham unemployment averaged
1.7
per cent and this takes into account the
inflated levels of unemployment during the early months of
I
963
due to the
exceptionally bad weather. During these three years
E
I
4,445
arrears were
recovered for Birmingham workers by Wages Inspectors.
EI
I
,419
of this
resulted from routine inspections. These sums merit further investigation
and indicate that full employment does not ensure full compliance with
minimum standards.
INSPECTION
POLICY
AND
USE
OF
DATA
The level ofroutine wages inspections for
I
962,
I
963
and
I
964,
nationally
and regionally, was set at
7.5
per cent of covered establishments for each
trade. In addition every complaint was investigated. Inspection policy
being determined by national and regional criteria, Birmingham does not
constitute
a
separate area but forms part of the West Midlands. Inspection
records for all Wages Councils are compiled on regional and national bases,
*
Lecturer in Industrial Relations, University
of
Aston
in Birmingham (Designate)
1
First publication
of
Unemployment percentages
for
principal
towns.
22
MINIMUM
WAGES
IN
A
FULLY
EMPLOYED CITY
23
annual summaries being issued to individual Wages Councils. Excerpts
from the national summaries appear in the
Ministry
of
Labour
Gazette.
With encouragement and help from national and local Ministry of
Labour officials, it has been possible to isolate and study certain details of
individual Birmingham inspections. In doing this and in presenting the
information which follows, the anonymity of the firms inspected has been
scrupulously safeguarded.
ARREARS
RECOVERY
-
BIRMINGHAM
AND
BRITAIN
The ‘city of
I,OGI
trades’ provides
a
good cross section
of
Wages
Council activity. In
1964, 43
of the
50
Wages Councils for Great Britain
and England and Wales covered Birmingham firms. These ranged from
small trades such
as
Hair, Bass and Fibre with fewer than ten establishments,
to the retail and catering giants. In October
1964,
Birmingham had
2,
I
22
establishments covered by the Retail Food Wages Council. At this time,
the five retail and four catering Wages Councils accounted for
7,533
of
the
city’s
10,281
covered establishments.
In
1962, 1963, 1964,
the levels of inspection of listed establishments for
Britain were
9-3
per cent,
9-7
per cent and
9.6
per cent. For Birmingham the
corresponding figures were
9.7
per cent,
10.9
per cent and
7.5
per cent.2
On average there is thus only
a
small difference between national and city
inspection levels. There is a startling difference in the arrears experience.
In
1962
Birmingham underpaid workers constituted
2-3
per cent of
Britain’s underpaid workers but accounted for
3.6
per cent of the national
total
of
arrears. In
1963
and
1964
the corresponding figures were
2-4
per
cent workers
-
4.1
per cent arrears,
1.5
per cent workers
-
2.2
per cent
arrears. Table
I
points up the consistency of this pattern.
TABLE
1
Average arrears per underpaid worker
Great
Britain Birmingham3 Birmingham
DiJirential
%
54.8
E
14.4
1962 9.3
1963 9.8 16.7 70.4
1964 10.9 15.3
40.4
E
There is no obvious reason why Birmingham underpaid workers should
fare worse, to an average extent of
55
per cent than underpaid workers as a
whole. The commonsense expectation would be that Birmingham, with a
lower level of unemployment than the national average, would experience
a
lower level of arrears. Only a major and Ministry sponsored inquiry could
establish whether the Birmingham experience was typical of other industrial
2
This drop is attributable to staffing problems.
3
These averages are not based on low absolute figures. Birmingham underpaid workers
totalled
331
in
1962,371
in
1963
and
228
in
1964.
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