THE COMPOSITION OF MANUAL WORKER WAGE EARNINGS
| DOI | http://doi.org/10.1111/j.1467-8543.1976.tb00037.x |
| Author | John T. Addison |
| Published date | 01 March 1976 |
| Date | 01 March 1976 |
British Journal
of
Industrial Relations
Vol.
XIV
No.
1
THE COMPOSITION
OF
MANUAL WORKER WAGE EARNINGS
JOHN
T. ADDISON*
THIS article reviews certain empirical results arising from the first phase of an in-
vestigation into the manual worker industrial wages structure. The major study
will in part draw upon the material presented here in attempting
a
detailed
analysis
of
earnings determination at the broad industry level. The aim of the
present paper is, however, of more modest dimension.
It
is concerned with wage
composition and the principal focus of attention will relate to the ‘importance’ of
basic pay in weekly earning,
1968-74.
The study proceeds as follows: first, the
wider context of the major study is introduced simply to locate the largely
descriptive approach here adopted; secondly, the nature of basic rate data is con-
sidered; thirdly, the principal data input of the present study, namely New Earn-
ings Survey (N.E.S.) material,
is
introduced and analysed, and, fourthly, certain
tentative ‘explanations’ of the observed relationships are advanced.
THE WIDER CONTEXT
Almost
all
post-Phillips studies of aggregate wage inflation in the U.K. have
used wage rates (or, more accurately,
W)
as the dependent variable (Lipsey,
1960;
Archibald,
1969;
Lipsey and Parkin,
1970;
Parkin,
1970;
Thomas and Stoney,
197 1).
This despite the widely observed postwar phenomenon of wage/earnings
drift’ (Turner,
1956, 1962, 1964, 1967;
Marquand,
1960;
Lerner and Marquand,
1962, 1963;
Phelps Brown,
1962;
Lerner,
1965;
Office
of
Manpower Economics,
1973)
and clear evidence to the effect that changes in earnings may occur quite
independently of changes in wage rates (Routh,
1959;
Taylor,
1972).
And,
moreover, neatly side-stepping the view
of
many industrial relations theorists of
institutionalist persuasion that the British industrial relations system has decom-
posed into two separate systems (Royal Commission on Trade Unions and
Employers’ Associations,
1968).
The reliance
of
the economist upon a composite (male and female) index of
wage rates is partly to be explained by data availability.* A more fundamental
reason is, of course, that economics has no
theory
cf the rates-earnings-drift
nexus, or a
theory
of the behaviour of bargaining structure which underlines this
nexus. Consequently, the limited research within this area has relied upon
ad
hoc
hypotheses as a source of testable predictions rather than conditional predictions
drawn from some basic bedrock of economic analysis
of
wage composition-
bargaining structure interaction (Paish,
1958;
Turner,
1956;
Dicks-Mireaux and
Shepherd,
1962;
Gillion,
1968).
This relative lacuna in economic knowledge is paralleled by that attaching to
the historical method of the institutionalist industrial relations approach, most
clearly formulated in Donovan. Whilst the latter describes the way in which an in-
formal, fragmented and autonomous process of bargaining at the plant level has
grown up to occupy a place of at least equal importance alongside the formally
recognised machinery of industry-wide bargaining it makes little or no attempt to
‘explain’ the phenomenon. Moreover, the institutionalist approach nowhere ex-
plicitly states the criteria which a good industrial relations system should satisfy.
Consequently, unless one has established some clear idea of what the system is
Visiting Professor in
Economics,
Temple University, Philadelphia. Lecturer
in
Political
Economy, University of Aberdeen.
56
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