THE INADEQUACY OF RECENT WAGE POLICIES IN BRITAIN
| Published date | 01 June 1958 |
| Date | 01 June 1958 |
| DOI | http://doi.org/10.1111/j.1467-9485.1958.tb00356.x |
THE INADEQUACY
OF
RECENT WAGE POLICIES
IN
BRITAIN
I
PRELIMINARY
ASSUMPTIONS
I
SHALL
assume without discussion that wages have been rising more
rapidly than prices or productivity in Britain in recent years, that they
have in consequence been creating a situation of wage-induced
inflation, and that this has been especially true of
1956
and
1957.
This assumption must not be taken to imply, however, that wage
increases were the sole inflationary factor at work.
I
shall also take for granted that the gap between wage rates and
earnings is now considerably wider than before the war. My further
assumptions are largely controlled by reflection on the differing forces
at work on wage rates and earnings, and on the relation between them.
I
shall assume, for example, that wage rates are determined by
national negotiations, or by arbitration or conciliation conducted at
the national level. The result of this process is a formal document
setting out general conditions as to wages and hours for all workers
covered by the document. The scope and applicability of such a docu-
ment will depend on three sets of factors:-
(a)
whether it refers to
one firm or employer or to an industry
;
(6)
whether it refers to mini-
mum or standard rates of wages
;
and
(c)
whether the document itself
is complex or simple.
(a)
While some very large and some very small firms negotiate and
settle their wage rates independently of all other firms, in the majority
of cases wage rates are agreed for groups of firms constituting an
industry. Such industries may be easily definable, or amorphous
;
but
industry-wide national agreements, whether relating to standard
or
minimum rates, cannot usually cover all the circumstances of the labour
forces of all the firms in the industry, and
so
must inevitably require
supplementation in greater or lesser degree.
(b)
Wage rate agreements nationally negotiated for whole indus-
tries may detail either standard rates or minimum rates. Naturally,
minimum wage rates require more supplementation than standard
rates
;
but, because the negotiated rates have to be such as can be
applied by all in an industry, and not just by the better
off
firms,
standard rates too require to be supplemented. Moreover, the paradox
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