Frederic Meyers

The Interindustry Wage Structure and Productivity

The hypothesis, advanced by Dunlop, Garbarino, and others, that interindustry differences in output per man-hour may be significant in explaining observed differences among industries in levels of average hourly earnings is subjected to further statistical exploration in this article. (Authors abstract courtesy EBSCO.)

Book Note and Review: Labor Economics: Basic Facts on Productivity ChangeBasic Facts on Productivity Change. By FabricantSolomon. New York: National Bureau of Economic Research, 1959. viii, 49 pp.

I think it is clear that if labor organizations do have the political power to control central banking policy and to use it to implement their own policies, the wageprice spiral will rule. Unfortunately, some persuasive economic teaching of recent years has given intellectual support to the new inflation trend. Nevertheless, it is now being resisted by central banking authorities. If this resistance continues, then labor and management will be forced to settle their own disputes without taking it out of the general public and damaging the economy. In a society of powerful but unequal economic forces, some force must protect the national interest and that force can be no other than a responsible executive and legislature, and a faithful central bank. The struggle between the interest groups must then be conducted within the limitations of a stable price level. I agree with this authors view that the war and postwar inflation was a result of excessive demand and cannot be explained in any meaningful sense by the wage-price spiral, which is essentially a problem of the present decade. So much for the general argument. The discussion of the British and American war time wage policy is well done. War creates excessive demand. Keynes thought he could induce labor to work, and still defer effective demand, until the war was over. On the whole this was done. Labor worked hard, got its wages, saved, and hoped to buy in the postwar period. But, of course, when labor sought to buy, inflation resulted. This result was largely unexpected by many of the Keynesian stagnationists who felt postwar demand would be deficient and that deferred spending would merely maintain this demand. Real demand, in any event, had to be deferred, and labor had to be induced to save; however, it was the stagnation economists who really deluded themselves whilst telling the worker that his savings could be effectively spent when the war was over. I hope that the above emphasis upon the general wage-price problem, which is a scheme running through the whole book, will not obscure the general character of this volume as a factual and analytical description of the institutional situations confronting various economies and governments during the postwar period. It might be called a book on comparative wage-price policies. It is informative throughout and it furnishes a necessary background for analysis and public policy. The author is sensitive to facts and remarkably free from a bias that might have been created by obsession with any particular political ideology, or what is worse for objective thinking, preoccupation with theories remote from reality. Students of labor, of monetary and fiscal policy, and of economic theory in general may benefit, if they will, by giving this work their careful attention.

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Examines the decision-making process to resolve wage disputes in the railroad industry. Interpretation of the wage comparisons; Influence of changes in costs of living; Adequacy of the salary for the support of the employee. (Abstract copyright EBSCO.)