Abstract
A BROADSHEET "Wages and the Cost of Living Index" (No. 220) issued by Political and Economic Planning gives a useful brief review of the cost of living index itself and of the wage systems in the building and civil engineering, railways, iron and steel, coal and cotton industries and the Civil Service in Great Britain. The broadsheet forms part of a report on industrial relations which P E P is preparing, and does something to meet the need for a study of wages and other aspects of industrial relations which such innovations as 'pay-as-you-earn' have intensified. In addition to its descriptive part, the broadsheet includes the general conclusion, first, that if wage policy were sufficiently well co-ordinated between workers and employers and between different industries, it could be arranged that wages should not fall as much as prices during the down-swing, and that in return they should not be pushed up so much when prices are once more rising. Such a policy has been put into practice in Sweden with results that open up a vista of possible 'trade-cycle bargaining', under which the application of sliding scales as we know them would be inappropriate. From the workers' point of view it would be wrong to peg wages to the cost of living and thus stabilize real wages when their productivity is increasing and prices falling, for this would mean that their share in the product of their labour would be declining. One may expect that if post-war employment succeeds in producing a steadily rising national income, workers in most industries will prefer to rely on their bargaining power rather than on automatic scales. Part of the dynamic of a full employment policy must be the general striving for an uninterrupted rise in the standard of living, and therefore in real wages.
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Industrial Relations and the Cost of Living Index. Nature 154, 359 (1944). https://doi.org/10.1038/154359a0
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DOI: https://doi.org/10.1038/154359a0