The Composition of Manual Worker Wage Earnings

Abstract

THIS article reviews certain empirical results arising from the first phase of an investigation 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 considered; thirdly, the principal data input of the present study, namely New Earnings Survey (N.E.S.) material, is introduced and analysed, and, fourthly, certain tentative 'explanations' of the observed relationships are advanced. THE WIDER CONTEXTAlmost 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' (TurnerOffice 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 decomposed 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 compositionbargaining 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 informal, 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 explicitly states the criteria which a good industrial relations system should satisfy. Consequently, unless one has esta...

National Wage Rates and Earnings Composition — A Note on Potential Sources of Sex Discrimination in Pay

“…1 Thus the narrowing of differentials by 8 . It is of particular importance however to note that though the rising trend of 'all other pay' is observed for each of the other male occupations, amongst sales assistants, the occupation most likely to give rise to equal pay problems, 'all other pay' of men fell from 88.…”

“…It is of particular importance however to note that though the rising trend of 'all other pay' is observed for each of the other male occupations, amongst sales assistants, the occupation most likely to give rise to equal pay problems, 'all other pay' of men fell from 88. 1 Thus the narrowing of differentials by 8 . 2 per cent between male and female sales assistants' 'all other pay' seen in Table l(b) has been offset by changes in their methods of wage payment to give a reduction in differentials of only 2.6 per cent measured in terms of gross pay.…”

The Contraction of Collective Bargaining in Britain

“…The Commission's view of the ineffective nature of industry-wide agreements proved controversial (Elliott and Steele 1976;Addison 1976;Brown and Terry 1978;Elliott 1981). There was implied support from the New Earnings Survey; a later analysis by Elliott and Murphy (1990: 400) found that, for the years 1973, 1975 and 1983, three-quarters or more of male private-sector manual workers were paid basic hourly rates at least 10 per cent more than their appropriate national agreements; and from miscellaneous National Board for Prices and Incomes reports.…”