By Maurice Scott, Robert A. Laslett (auth.)
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Extra info for Can We Get Back to Full Employment?
By the level of unemployment; the profitability of firms; the cost of being on strike; and the attitude of workers, the media and the government, which in tum will be much influenced by the rate of inflation. Collective bargaining is a cautious trial and error process. e. wages to accelerate) until resistance is felt to be strong. Some sort of balance will then be struck between profitability and unemployment, the point of equilibrium being determined by the cost of being on strike and the attitude of workers, the media and the government.
This means that in any given period (or wage-round, if such a thing really exists) it is very important to know 'the going rate', since most wage increases will cluster quite closely round it. g. prediction of the outcome of particular wage bargains) very important, it does not provide us with an explanation of why wage increases are sometimes greater and sometimes smaller. For this we have to know what it is that determines the 'going rate', and the answer to that may be found in factors which seem relatively unimportant in any particular wage bargain, where what chiefly matters is the going rate itself.
159). All this can, however, be reconciled with a monetarist standpoint if one believes that the wage push was due to a growing realisation that inflation was here to stay. For a given degree of tightness of the labour market, then, bigger wage increases were demanded and secured because both sides to the negotiations recognised that prices and other wages were going to go on increasing in the future. Hence it was (on this view) changing price (and wage) expectations which caused the acceleration in wage increases.
Can We Get Back to Full Employment? by Maurice Scott, Robert A. Laslett (auth.)