THE PRESENT COMPLEXITY OF WAGE PAYMENTS1
| DOI | http://doi.org/10.1111/j.1467-9485.1955.tb00738.x |
| Published date | 01 October 1955 |
| Date | 01 October 1955 |
SCOTTISH
JOURNAL
OF
POLITICAL
ECONOMY
FEBRUARY
195
5
THE PRESENT COMPLEXITY
OF
WAGE PAYMENTS'
I
THE
purpose of this article is to draw attention to the large number
of
different types of payment that are generally included under that
convenient shorthand term--' the wage
'.
There has been in recent
years some confusion-and not
a
little despair-evident
in
the attitude
of
economists
to
wages problems. It
is
the contention here that much
of
this is due
to
the lack
of
a clear decision on what it is that is being
.
talked about: what
is
a
wage and
from
what types of payment is
it
built up?
The approach diverges
from
the conventional
in
three ways. First,
stress
is
laid primarily on differentials and the picture is close and
detailed. It is more concerned with the short period than with long-
run effects
or
long-run equilibrium. Secondly. more importance than
has recently been fashionable has been accorded
to
the pattern
of
wages
as
it
appears at the factory level, rather than
in
the broad sweep
of
industry. Thirdly. though the economist has generally been brought
up
to
do most of his reasoning on wages
in
terms of time rates. here
other forms of payment are given a much heavier weighting than has
been customary.
I1
THE
COMPLEXITY
OF
WAGE
PAYMENTS
Three points
at
which the wage overlaps with other sources
of
income must
first
be cleared up.
First.
'
wages
'
and
'
earned income
'
must be distinguished.
'
Earned
income
'
denotes a group of payments wider than
'
wages
'
since
it
in-
cludes the fees and earnings of self-employed persons, which, though
'A
version
of
this article
was
read
to
a
Study
Group
of
the Manchester
Statistical Society
in
March,
1954.
1
I
7
D.
J.
ROBERTSON
income from work.
are
not
‘
wages’. Moreover, a person’s ‘earned
income
’
Iim
a
longer time-reference than his
‘
wages
’
and may include
\va:es’
fruiii
more than one employment.
For
example, a man’s
earned income over a year might cover several changes
of
job,
and
periods
in
which he had more than one
job
at the same time. while
‘
\v;~pe
’
can normally be applied only
to
the proceeds
o€
one
employ-
nicnt.
and is generdly reckoned
for
a
shorter period,
Sccoiidly,
a distinction can be made between
‘
wages
’
and
‘
salaries
’.
It
appears
to
be largely an unfortunate accident that the
term
’
iviipcs
’
should be used
to
cover all payments to employees,
in
\vhich cast:
it
includes salaries, and that this same general term should
he contrrrcted
in
its
scope
also
to
denote
the
larger segment-those
who
work
with
their hands. who are
‘
works
’
rather than
‘
staff
’
whose
pay is reckoned
by
the week
or
the hour rather than by the month,
or
who
represent direct
as
against indirect
or
overhead labour cost
to
the employer.
It
seems probable that this distinction between
‘
wages
’
xnd
‘
salaries
’
is
over-stressed. particularly since
it
results
in
a
con-
ccntration
of
attention
on
it
to
the neglcct
of
other important dis-
tinctions within
the
worker’s
pay
packet. Here ‘wage
’
is
generally
usctl
to
refer
to
the
iiarrow
grouping only.
Thirdly, there is a distinction between monetary and non-monetary
paynierirs.
Some advantages
of
a
job
are not represented by money
ad
;ire
ditlicult
to
reckon
in
money terms,while others.such as pension
bciielil.
or
p:iitl
holidays, are represented
in
money terms
but
are not
rcckoiictl
;IS
prt
of
‘
the wage
’.
These ‘fringe benefits’
or
‘
net
;tJvanlages
’
cotistitute difTerences between man and man
in
the labour
rriarket
and
may
be
important factors
in
deciding between jobs. They
;ire
not
generally reckoned
in
the pay packet. however, and
are
ex-
cluded
here.
Tho
tlis!inctions
to
be dealt with here are those between wage rates
atid
other
payiiienls
included
in
the pay packet
of
the wage-earner.
Thc
lirst
mijor section
of
the pay packet
is
the wage rate. Such
KIICS
iiiay
be
considered under
two
headings. negotiated or agreed
r;i!cs
applic;iblc:
nationally
or
to districts, and rates actually paid
!oc;tlly
;I[
factory level.
Conlcrenws
of
employers’ associations and trade unions,
or
rtic‘ctirigs
of
roirncils with both sides represented, are practically
uni-
\crsal
in
all
industries
in
Britain. Meetings
of
this kind-after due
I~ic.kei-iii~--feiicrally
produce
P
national
rate
for
their
industry
or
at
lc;t\t
;I
scliciiie
of
district rates. The actual fornis taken by the agreed
rxic.
Iio\.r‘evcr.
diner widely.
In
some cases rates are prescribed which
:!Ic
!o
lie
riatiotial
sraridiird
rates
and which specify occupational
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