Towards a macro-social approach to the theory of the formation of wage and salary structure

Note: this paper was written during 1974 and early 1975, while I was a research fellow at the LEST, with lots of advice and feedback from Rodney Crossley, François Sellier, Jean-Jacques Silvestre and Marc Maurice. I saw the paper as a possible contribution to their comparative work on France and Germany which was at its most intensive phase while I was at the LEST: hence the search for societal factors that shape pay structures. I circulated the paper as part of my job search, and although the academic labour market was reeling from the first oil shock, I was surprised at the generosity of older and wiser scholars with their time and comments despite the dearth of entry jobs. These I still treasure. Among these, I received brief but perceptive comments from John Hicks, who asked how the model would work with the introduction of competition, and who made some very kind and helpful suggestions for my job search. Barbara Wootton also expressed interest but was also critical of its style and generality. Willy Brown sent me a long and very generous set of comments, which we eventually discussed at our first meeting in Warwick in spring 1975. Guy Routh kindly put me in touch with Henry Phelps-Brown who advised against trying to publish it on the ground that it was too speculative, and that if I were to research the subject properly, I should need to devote much more effort to a detailed empirical analysis. He also advised that big problems should be divided up into much smaller ones to make them workable: one cannot work on a whole oak tree, but should cut it up first into planks. The opportunity to do this came with my job at Sussex from September 1976 on a project with Christopher Saunders on pay inequalities and inflation in western Europe. That gave the opportunity to look at some aspects of the problems outlined in the paper, but it also took me towards the way in which labour market and firm structures shape pay structures. In this, I was also greatly influenced by the France-Germany project of Maurice, Sellier and Silvestre, and their work on the ‘effet sociétal’. By then too, my confidence in the first of the structuring principles, the authority hierarchy, had been eroded. During my year as a researcher on industrial democracy in 1975-76 at the then Department of Employment, Peter Brannen and John McQueeney showed me that authority could rest on compliance as much as on a belief in its legitimacy. My work at Sussex on pay structures showed them to be more varied than I had originally thought. Finally, my attempts to probe the empirical side of studies of worker orientations that might have provided support for the potency of beliefs about authority, notably by Goldthorpe et al and Blackburn and Mann, showed them to be real but much less all-embracing than I had first imagined. I have not given up on the social determinants of pay structures, but Phelps-Brown was probably right to advise me to try an alternative path. The current version is the fifth, of January 1975. A version of the paper’s fourth draft also exists in a French version: ‘Esquisse d’une théorie de la hiérarchisation des salaires’, Note de recherche, Laboratoire d’Économie et de Sociologie du Travail, CNRS, Aix-en-Provence, 8 Nov. 1974, NG/74/456, 28 pages, mimeo. The argument was taken a little further in my ‘Critique de l’analyse économique des faits sociaux: le cas de la recherche sur le marché du travail’, which was published as a research report of the LEST in 1976, chapter 10 (Action Thématique Programmée Internationale du Centre National de la Recherche Scientifique, no. 1655 1599). There, I tried to develop further the argument about the nesting of the different structuring principles, and the need to maintain ‘structural integrity’ at each successive stage of ranking pay levels. The paper’s title itself mirrors that used by Mike Piore who spent the summer of 1974 at the LEST. David Marsden. London School of Economics. September 2008