Internal Labor Markets and Manpower Analysis

TL;DR: In this paper, a tripartite body composed of the government, the TUC, and the Confederation of British Industry (CBI) should determine the criteria, review all proposals for pay increases, and be legally empowered to refuse increases.

Abstract: While this seems reasonable, many of the cases investigated showed that low pay and high earnings often went together, so that help to the low paid was aid to the high earners. Again, the policy allowed exceptional pay increases in order to secure change in the distribution of manpower, which was rarely achieved, and to increase productivity. Yet, as he shows, the productivity criterion was often used as a rationalization for pay awards which could not be prevented or which, had they been stopped, would have occasioned politically embarrassing and economically damaging strikes. Although Clegg has a fine time deriding the anomalies in the policy, his comments are unfair. The policy did not create the anomalies but merely highlighted those which existed. The intractability of the problems facing the policy-the piecemeal approach of the PIB; the different criteria applied by the PIB, the Trades Union Congress (TUC) and the government; the downgrading of the criterion of comparability by the government in 1968; the inability of the government to control prices; and the fact that many negotiators were allowed to go their own wayleft the policy in shreds. It is Clegg's main purpose to pick up and put together the pieces. First, he proposes a pay standstill and the government's taking steps to prevent excessive price rises. Next, he advocates a comprehensive overhauling of plant pay structures. He is rightly concerned with closing the earnings gap, for as he points out, it is relatively easy for an incomes policy to control rates but it is earnings which are crucial. Following this, criteria should be established for the payment of pay increases. He wants a list of those entitled to increases to keep them in line with the general rise in prices, a list of those entitled to more, and a ceiling established for those in the middle. He seems to disregard, however, the fact that even keeping wage increases down to the level of price rises is itself inflationary. However, Clegg suggests that a tripartite body composed of the government, the TUC, and the Confederation of British Industry (CBI) should determine the criteria, review all proposals for pay increases, and be legally empowered to refuse increases. This, as he admits, is a tall order. Its effectiveness will depend on the willing cooperation and consent not only of the CBI and the TUC but also of all those, including junior managers and workers, involved in pay negotiations. Even more utopian is his assumption that we can devise, have accepted, and implement a new national ranking of the pay appropriate to different jobs and occupations. As he shows in his analysis of the last policy, many increases were conceded not because they were fair or because they were based on a strong economic case but because of the intervention of the politicians. This presumably would happen in any incomes policy and hence erode public confidence in the fairness of the policy which Clegg considers to be all important. But then, as Max Weber once said, \"man would not have attained the possible unless time and again he had reached out for the impossible.\