Wage Relationships —The Comparative Impact of Market and Power Forces

Abstract

One modern version of Adam Smith’s famous observation (Book I, Chapter 8) might read: ‘Workmen are always in constant and uniform combination to raise the wages of labour above their actual rate’. Now this version would not be so true as Smith’s about ‘masters’ (as Smith himself noted), for their combination is less the ‘natural state of things’. Workers, being more numerous and diverse, have less of a community of interest than masters and a greater need for formal bonds. These formal bonds, over the past century, have been supplied by labour unions in many trades and industries in those industrialized nations which are organized into pluralistic systems, and a major purpose of most of these unions has been to modify ‘market forces’ by group decisions and organized power in setting wages.KeywordsCollective BargainingSkilled WorkerWage DifferentialUnskilled WorkerLabor Relation ReviewThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.