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Unions, many of them highly specific in their membership, are very active in government. We may ask why in government, when they are docile elsewhere? First, the majority of these unions are not affiliated to the FTU or TUC, indicating that they are unions with strictly economic, not political or social objectives. Second, they have only one employer and that employer is most susceptible to political pressures both from Britain and within the Colony. In other words, it is most likely to import British negotiating procedures and most vulnerable to the threat of disruption to the Colony's services. It is manifestly not the case that workers are unable to take industrial action against the state.
St is not their state; it is a British presence of very tenuous political standing. Third, government does operate with a highly standardized, public scale of pay and work conditions a situation unique in EK, where proliferation of methods of pay and decentralization are the rule and this allows concern for differentials to be manifested as concrete rational arguments by workers. Finally, as I think the CSB is aware, (since they pointed out some of the more glaring loopholes), government has a very inflexible system of labour relations which gives workers little alternative to escalating industrial action when they have a grievance. Bureaucratic procedures 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 service. The very existence of a monolithic employer promotes combinations of workers, even if, as in this case, combination is highly fragmented.
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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
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(b) Government's effect on private sector wages: intimate link between pay in government and in, e.g., 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 teses 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 the largest employer in HK and, when the private sector is slack, it recruits substantial numbers of new employees (9,000 in 1975): So, for some categories of labour, government pay increases can easily be transmitted as labour market pressure on competing industries. But here, too, there are limits to the amount of labour mobility that can occur between the private and public sectors. The most that can be caio is that
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