NATIONAL WAGE RATES AND EARNINGS COMPOSITION — A NOTE ON POTENTIAL SOURCES OF SEX DISCRIMINATION IN PAY
| Published date | 01 March 1977 |
| Author | Olive Robinson,John Wallace |
| DOI | http://doi.org/10.1111/j.1467-8543.1977.tb00076.x |
| Date | 01 March 1977 |
British
Journal
of
Industrial
Relations
Vol.
XV
No.
I
RESEARCH NOTE
NATIONAL WAGE RATES AND EARNINGS COMPOSITION
-
A
NOTE ON POTENTIAL SOURCES
OF
SEX DISCRIMINATION IN
PAY
OLIVE
ROBINSON*
AND
JOHN
WALLACE”
THE
following observations consider the extent
to
which N.E.S. findings, now
widely regarded as the most comprehensive source of earnings data available,
provide sufficient information for a thorough assessment of the changing role of
pay components to be made. The writers are particularly concerned with the limi-
tations imposed
on
attempts to identify the contribution to gross earnings of pay
rates fixed by national
or
industry wide negotiations,
or
of ‘basic pay’ levels resul-
ting from company bargaining and unilateral wage decisions. Our interest in this
matter arises from research into the implementation of equal pay legislation in the
distributive industry. Since equal pay may be determined at minimum
or
higher
rates of pay, it is essential to consider the contribution
of
all wage components to
malelfemale differentials at varying earnings levels. It is to be expected that
increasing significance will be attached to the function of negotiated
or
statutory
minimum rates as
a
consequence
of
incomes policies designed to restrict earnings
by allowing
a
maximum supplement, in either absolute or percentage terms, which
is not allowed to influence rates
at
which overtime, P.B.R. and other premia are
calculated. A shift in attention from other pay components may also result from
an extension of wage negotiations incorporating into basic
or
minimum rates
of
pay,
a
proportion of items such as P.B.R., other forms
of
incentive and in some
cases overtime earnings.
Recent articles in this journal have indicated some of the problems involved
in
identifying earnings composition from N.E.S. data. Addison,’ and Elliott and
SteleZ have noted reductions in the number of separate pay components since the
first N.E.S. of September
1968,
the main effect of which has been the emergence
of ‘all other pay’, defined by the N.E.S. as including ‘not only basic pay but any
items other than overtime payments, P.B.R. etc., payments and shifts, etc., pre-
mium payment~’.~ The form in which N.E.S. data are currently presented corres-
ponds with conventional methods of measuring ‘wage drift’ by isolating overtime,
P.B.R. and shift pay from
gross
earnings,
a
recent example being the Department
of Employment’s analysis of changes in the relative weight of these components
in industries affected by major, collective agreements
or
wage orders over the
period
1970-74.4
This approach leaves unresolved, however, any consideration of
‘wage drift’ between minimum nationally determined rates, higher pay scales of
companies and the various rates paid to individuals. From the simultaneous
operation of wage determination processes at these levels it is possible to con-
ceive of
a
multi-stage ‘wage gap’ existing between pay rates, all
of
which con-
stitute ‘basic rates’. In specific instances such a ‘wage-gap’ may be of greater sig-
nificance than ‘wage drift’ as normally defined.
Addison, in adopting
a
definition of basic pay
‘as
all payments consolidated for
calculating overtime pay’, appears
to
accept the limitations imposed by the use of
‘all other pay’
in
N.E.S. data,
a
serious weakness in an examination
of
‘the
*
Senior Lecturer (Labour Economics), School
of
Management, University
of
Bath.
‘f
Lecturer, Industrial Relations, Department
of
Management,Teesside Polytechnic.
10
1
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