The Wages Structure and Some Implications for Incomes Policy

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. (1) Wage rates have risen rather less than wage earnings over the past decade. Nevertheless changes in wage rates have been a major determinant of changes in earnings. Generally speaking, the immediate effect of a wage rate change has been to raise earnings by the cash amount of the negotiated increase. But some other factor has also been contributing to increases in earnings. This factor may simply be the persistently high pressure of demand since the war (such changes in the pressure of demand as have occurred over the past decade have not been a major factor) ; or it may be partly the long-term effects of increases in wage rates. It seems clear that an incomes policy directed at wage rates would have a considerable effect on wage earnings.