WAGE POLICIES ABROAD
| Author | T.L. JOHNSTON |
| DOI | http://doi.org/10.1111/j.1467-9485.1958.tb00358.x |
| Published date | 01 June 1958 |
| Date | 01 June 1958 |
WAGE
POLICIES
ABROAD
I
A Cook's
tour of foreign wages policies has become a fashionable
form of exercise in the post-war discussion of these problems, and the
Netherlands and Sweden in particular are often held up to others' as
countries whose approaches to the problem set a good example, or
provide illustrations of what we must at all costs avoid, or could
never tolerate. It is not surprising
to
find a variety of conclusions
being drawn about foreign experience, firstly because of the value
judgments that are brought to discussions of such vague concepts as
'
full employment in a free society
',
and, secondly, because of the vast
complex of non-economic forces-political, institutional, social and
historical-which impinge
upon
the markets for wage determination
in
different countries.
Different countries have at various times attached
a
different order
of priorities not only to freedom of collective bargaining, full employ-
ment and stable prices, but also to investment requirements, price
controls, monetary policy, the use and usefulness of the rate of
interest as a policy weapon, balance of payments problems, and adjust-
ments and reconciliation of claims
on
scarce resources via social policy,
wage restraint and a profits squeeze.
An
attempt will be made here to elucidate some of the wage
policy issues which 'have proved significant for three countries, the
Netherlands, Sweden, and the United States. These countries are
selected because they typify economies in which different approaches
to wages policy have been developed, and indeed-and this will be
one of the main theses
of
this paper-made necessary by the economic,
social, political, and institutional framework within which wage deter-
mination is carried
on.
All three countries accept the general goal of
high employment, but none has committed itself to any precise per-
centage figure for what it understands by full employment. Sweden
and the Netherlands are, however, full employment economies
in
the
vague
'
3
per cent.' sense customarily attached to the concept, although
there have been significant variations
in
the level or degree
of
un-
employment at different phases of the post-war period.
In
the USA.
1
For
an interesting Swedish trade union appraisal
of
the Dutch system,
see
Rapport angdende
lonesystem,
lonepolitik, arbetsvdrdering
och
lonestatistik
i
Holland,
mimeographed, LO-TCO, Stockholm,
1957.
126
WAGE
POLICIES
ABROAD
127
the unemployment percentage has fallen below
3
per cent.
in
only
one year (1953) but it has exceeded
5
per cent. only in 1949, 1950
and 1954.
If
we follow Zoeteweij and take the essentials
of
a national wage
policy to mean a situation
in
which
‘
decisions regarding the level and
structure of wages are taken
in
respect of the economy as a whole and
with explicit reference to the country’s economic (and social) situa-
tion
’,z
the three countries selected offer sufficient contrasts for our
purposes. Each has had a different type of policy, in that a conscious
centralised wages policy has been operated under government super-
vision in the Netherlands throughout the period, in Sweden attempts
have been made to co-ordinate wages policy by voluntary agreement
and without direct government intervention, while
no
conscious overall
control has been exercised in wage determination by private or public
bodies in the United States since World War
11,
except for the 1951-52
experience
of
the Wage Stabilization Board.
The analysis falls into three parts, first
a
brief description of the
institutional processes by which wages are determined, secondly an
analysis of post-war experience of wages policy, and a final section
which will take up aspects of this experience which suggest particularly
pressing, or common, or fruitful problems for discussion in this country
and elsewhere.
I1
Post-war wages policy in the Netherlands has been conditioned by
the Occupation, high pre-war unemployment, the division of both
employers’ and workers’ organisations along ideological and religious
lines, and by common acceptance in the immediate post-war years
of
the need to tolerate some limitation of group interests in order to
promote national recovery. The recovery programme was founded
on
agreement about the urgency for increased production and produc-
tivity, a distributive idea of social justice in the process, and a clear
recognition that a centrally directed wages policy was an essential
part
of
economic planning for recovery and full employment. It was
therefore considered legitimate to control the general forces of wage
determination to these ends. All this is clearly reflected in the struc-
ture and organisation of the three main bodies which have comprised
the machinery for determining and administering the national policy
*
See Bert Zoeteweij,
‘
National Wage Policy: the Experience
of
the Nether-
lands’,
International
Labour
Review,
Vol.
71,
1955,
p.
151.
To continue reading
Request your trial