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The Wages Structure and Some Implications for Incomes Policy

Published online by Cambridge University Press:  26 March 2020

L. A. Dicks-Mireaux  and
J. R. Shepherd
L. A. Dicks-Mireaux
Affiliation:
National Institute of Economic and Social Research Office of the National Economic Development Council
J. R. Shepherd
Affiliation:
National Institute of Economic and Social Research
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Extract

During the last decade the relative earnings of different groups of manual workers have not changed to any marked extent. Such changes as have occurred have for the most part been unsystematic, except that there has been a tendency for unskilled rates to rise rather more than skilled rates. In highly-paid industries there has been no tendency for earnings to increase more or less than the average; women's earnings have not changed very markedly compared with men's; nor, as other studies have shown, is there any clear relationship between the relative rise in earnings and changes in the size of the labour force in different industries, or different rates of increase of productivity.

Type
Articles
Information
National Institute Economic Review , Volume 22 , November 1962 , pp. 38 - 48
Copyright
Copyright © 1962 National Institute of Economic and Social Research

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References

(1) See E. H. Phelps Brown and M. H. Browne, ‘Earnings in Industries of the United Kingdom, 1948-59’, Economic Journal, September 1962.

(2) All earnings figures have been taken from the Ministry of Labour's six-monthly earnings enquiries for the United Kingdom. However, these enquiries do not cover the whole economy. The industries included are broadly manufacturing, building, public utilities, public administration and a few service industries. Together they employ about two-thirds of all manual workers in the United Kingdom. The com parison between rates and earnings ends in 1959 because of the change in industrial classification in September of that year.

(1) A small part of this increase reflects shifts in employment between the industries. If allowance is made for this the increase becomes 74.9 per cent. During as comparable a period as possible, the percentage increases in weekly earnings for men in four major groups omitted from the analysis (since the statistics are compiled somewhat differently) were : railways (conciliation grades), 74 per cent; coalmining, 74 per cent; docks, 67 per cent; agriculture, 73 per cent.

(2) Because of the change in industrial classification, data are available for only 128 industries, not necessarily the same as before, but with broadly the same coverage. Also this latter comparison will be more sensitive to the timing of wage settlements, since a single opening and closing date had to be used for so short a period.

(1) Because of the different classifications used, it is not possible to compare systematically wage earnings and wage rates in industry groups smaller than the SIC orders; and even here the comparison is not completely exact. The earnings figures are collected by establishments whereas the wage rate indices tend to be grouped by occupations.

(2) The detailed information on wage rates was kindly made available to us by Mr. J. R. Crossley of the London School of Economics, and is mainly based on the Ministry of Labour's ‘Time Rates of Wages and Hours of Work’, and on changes reported in the Ministry of Labour Gazette.

(3) The selection of skilled occupations was to some extent arbitrary since there is very little information about the numbers affected by a given rate. In general a skill com manding a fairly high wage rate was chosen although foremen were excluded.

(1) ‘Trade Unions, Differentials and the Levelling of Wages’, The Manchester School of Economic and Social Studies, September 1952.

(1) Since statistics of actual earnings are available only for a week in April and October of each year, a more refined com parison of the timing of wage rate changes with earnings changes is impossible.

(2) See, for example, F. W. Paish, ‘Inflation in the United Kingdom, 1948-57’, Economica, May 1958, vol. XXV.

(3) This argument is used in a similar way in E. H. Phelps Brown and M. H. Browne (reference in footnote (1), page 38).

(4) The same causal relationship was found in a sample of 45 firms in the engineering industry; see Shirley W. Lerner and Judith Marquand, ‘Workshop bargaining, wage drift and productivity in the British engineering industry’, The Manchester School of Economic and Social Studies, January 1962.

(1) This index measures the pressure of demand for labour, using the statistics of unemployment and of unfilled vacancies published in the Ministry of Labour Gazette. The method of construction is described by J. C. R. Dow and L. A. Dicks- Mireaux in ‘The Excess Demand for Labour’, Oxford Economic Papers, vol. 10, no. 1, February 1958.

(2) Other variables were, in fact, experimented with. The computations were carried out by the electronic computer of the University of London Computer Unit The results will be described more fully in a forthcoming monograph on Studies in Cost and Price Behaviour.

(1) L. A. Dicks-Mireaux and J. C. R. Dow, ‘The Deter minants of Wage Inflation, 1946-56’, Journal of the Royal Statistical Society (Series A), vol. 122, part 2, 1959.

(2) A general description of this method is given by H. Theil, Economic Forecasts and Policy, North-Holland Publishing Company, Amsterdam 1958, pages 334-361.