The Impact of Incomes Policy on the Male Inter-Industry Wage Structure

Abstract

With few exceptions, the wage guidelines between 1975 and March 1987 in Australia imposed uniform percentage wage adjustments. From 1975 to 1983, however, the inter- industry Average Weekly and Ordinary Time Earnings distributions exhibited increased dispersion, which reflected less stringent compliance requirements than the later period, when intra-industry wage dispersion appeared to rise. During the period 1983-87, incremental creep and job promotions for incumbent workers appear to explain part of the increased dispersion. Over the period 1966-88, both inter-industry wage distributions exhibited significant rank order correlations, except for the period 1980-81 during the breakdown of the centralized system. This suggests that there is a relatively stable ordering of inter-industry wages, irrespective of the presence or absence of incomes policy.