AN INTERNATIONAL COMPARISON OF ‘OVER-EMPLOYMENT’ TRENDS IN MONEY WAGES

Abstract

'OVER-EMPLOYMENT' might perhaps best be defined as that state of affairs in which the number of unfilled vacancies for labour greatly exceeds the number of unemployed. While this is probably the best definition, it is not very practicable statistically. We cannot ever hope to get a complete measure of the number of unfilled vacancies. Even direct inquiry among employers, if we could afford the time and money for it, would still probably give us rather uncertain accounts of the number of their unfilled vacancies. In Britain, where State Labour Exchanges are an institution long established, and form part of the administrative machinery of a system of compulsory unemployment insurance, so that employers make more use of them than they would otherwise, use can perhaps be made of statistical records of the number of unfilled vacancies. Even under these circumstances, however, statisticians consider that these figures can only be used with extreme caution. While an excessive number of unfilled vacancies for labour can therefore hardly ever be the subject of direct statistical enumeration, we all know the cycle of consequences which follow from this state of affairs. Labour, both individually and collectively, conscious that it is in short supply, seeks to take advantage of the situation, sometimes through a direct increase in wage-rates, but not necessarily always in this way. Labour may also seek changes in working conditions, additional overtime, a higher proportion of work paid for at overtime rates, up-grading, and a variety of indirect concessions (whose consequences will show in statistics of 'earnings', but not in statistics of 'wage-rates'). But at the same time the employer, knowing that his competitors, and often his customers, are short of labour too, will also take advantage of the situation, sometimes too through direct price increases, sometimes indirectly through delayed delivery, withdrawal of discounts, deterioration in the quality of goods supplied, and in other indirect ways. The consequences of his actions may not always show themselves in statistics of price changes, though they will in statistics of profits. So while wages are rising, profits are rising too, and the prices of goods are rising (or their quality deteriorating). A rise in the cost of living, quite apart from any state of labour shortage, gives labour further grounds for asking for higher wages. And so the spiral may continue to turn, until