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37.

Chapter 6

WACES AND PRICES

Manufacturing wages and earnings

75.

Manufacturing wages have been increasing rapidly since March

1975. The increase gained momentum in 1976 as the market for manufacturing

labour tightened. In March and in September 1976 the vacancy rate (defined

as the ratio between the number of vacancies and the total number employed)

in manufacturing was higher than the unemployment rate for the economy as

a whole. This shortage of labour has brought nominal average daily wage

rates (including fringe benefits) in September 1976 to a level 16% higher

than in the corresponding month a year ago; the similar measure of wage

rates in March 1976 was 15% higher than March 1975. As manufacturing

employment in March and in September 1976 was respectively 18% and 24%

higher than the corresponding month a year ago, it can be inferred that

total earnings for manufacturing labour in 1976 were roughly 40% higher

than in 1975. But increases in wage rates do not necessarily reflect

accurately increases in earnings.

When the labour market is tight, as

was the case during 1976, the excess demand for labour can be satisfied

if workers are willing to work overtime. So, increases in eamings may

be more rapid than increases in wage rates; and total eamings for

manufacturing labour in 1976 were probably more than 40% higher than

in 1975.

76.

Real wage rates in manufacturing in September 1976 were still

marginally below the peak level recorded in March 1973. Real average

daily wage rates in manufacturing in September 1976 were 3% higher than

in March 1976 and 12% higher than in September 1975. There was thus a

smaller increase between March and September 1976 than between September

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