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industrial action when they have a grievance.
Bureaucratic proce-
dures which take a long time to be implemented and which are
unsupported by mechanisms of arbitration/conciliation can only add
to the build-up of pockets of worker militancy in the civil ser-
vice. The very existence of a monolithic employer promotes
combinations of workers, even if, as in this case,
highly fragmented.
combination is
In conclusion, it ought to be noted that government expenditure
on wages (both in terms of employment volume and salary levels) has
accelerated rapidly since 1970, for reasons that are known only to
those who manage the economy. What has been the effect on the
private sector?
There is a very
(b) Government's effect on private sector wages: intimate link between pay in government and in, eg the utility
companies who form a significant part of the PIU's sample of 68
firms. They employ similar types of labour and direct comparison
is easy.
Most large company managers told me that they had to
follow the government rate a plausible exaggeration of the true
situation. It only has to be partly true for an inflationary spiral
to be generated. The government surveys wage trends in the private
sector and bases its own increases on those trends (let's forget for
now the arguments about the effect of incremental scales on such a
comparison); by the time its award is announced, workers in the
private sector seek a raise to catch up and this in turn is monitored
by next year's survey
etc, etc.
It is also the case that very
profitable companies are the bulk of those surveyed, so that what
Jardines can afford to pay out is, we are told, foisted on an
unwilling, less profitable firm through the government's action.
There are certain basic flaws in this argument: mainly, how
is "workers' demand for equivalence with government" transmitted
as an effective constraint on company wages policy? This is
particularly germane since the companies we are talking about have
low turnover rates and a strongly internalised labour market, for
reasons outlined in section 4, So, in the absence of marked
inter-firm mobility and strong collective representation within
firms, workers cannot demand anything, unless the employers find
these demands reasonable. It may be a different story in more
competitive sectors of the labour market. The government is by far
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