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Another look at low pay1

Published online by Cambridge University Press:  20 January 2009

Extract

Age, lack of skill, employment in certain industries, all contribute to low pay – but with what weight? The purpose of this study is to present evidence that age and skill have been underestimated and the industrial effect misconstrued as factors in low pay. We then attempt to spell out the handicaps of the low paid in labour markets, of which high rates of unemployment are the main sign.

Type
Articles
Copyright
Copyright © Cambridge University Press 1972

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Footnotes

*

Lecturer in Economics, London School of Economics.

Research Department, General and Municipal Workers' Union.

1

We would like to thank the following for help: E. Reeves and D. W. Flaxen of the Department of Employment, for unpublished data from the 1970 Earnings Survey: K. Matthews and Mrs K. Jensen, E.D.A.R.C, for research assistance: H. Johnson, D. Metcalf, P. Wiles, P. Doeringer, C. Foster and members of the L.S.E Seminar on Poverty for comments.

References

2 The point is made and evidence presented in National Board for Prices and Incomes, General Problems of Low Pay, Report no. 169 (HMSO Cmnd. 4648, 1971), p. 55.Google Scholar

3 Marquand, Judith, ‘Which are the Lower Paid Workers?’, British Journal of Industrial Relations (11 1967).CrossRefGoogle Scholar Department of Employment and Productivity, A National Minimum Wage., An Inquiry (HMSO, 1969).Google Scholar West, E. G., ‘Britain's Evolving Minimum Wage Policy: An Economic Assessment’, Moorgate and Wall Street Journal (Autumn 1969).Google Scholar

4 D.E. Gazettes, November 1970–February 1971. We are also grateful to the Department for providing some unpublished tabulations.

5 Fuchs, V., The Service Economy, Columbia University Press/NBER 1968.Google Scholar

6 Ibid. p. 6.

7 Gazette, D.E., 11 1970, table 6, p. 90.Google Scholar

8 NBPI, Report No. 169, loc. cit. p. 39.

9 The Department of Employment's 1970 Earnings Survey – from whose published and unpublished tabulations most of our data are drawn – classifies workers by three skill levels. The classification is most comprehensive for unskilled, in the sense that it covers most of the workers who are counted as unskilled in the Census. The coverage only differs from the Census in the exclusion of certain relatively minor occupations – messengers, porters and ticket collectors, stevedores and dock labourers, lorry driver's mates, kitchen hands and cleaners. The skilled and semi-skilled classifications are less comprehensive and exclude many such workers outside manufacturing. The all-manual category is however an exhaustive count of all such workers in the economy, which covers the three skill categories and the residual group.

10 Gazette, D.E., 12 1970, table 28, p. 1109.Google Scholar

11 Gazette, D.E., 01 1971, table 83, p. 52.Google Scholar

12 D.E. Earnings Survey, 1970: unpublished table.

13 Marshall, A., Principles of Economics, 8th edition, London: Macmillan, 1969, p. 459.Google Scholar

14 Townsend, P., ‘The Older Worker in the United Kingdom’, unpublished manuscript, p. 9.Google Scholar

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16 The number of registered unemployed recorded as unskilled in the Census data was for April 1966 about 50,000. The number of unskilled unemployed in the D.E. data for March 1966 was about 123,000. The explanation for the difference might lie in the different methods of classification of the two surveys. The Census groups workers by their occupational classification – the D.E. by the level of jobs they are aiming at. But whichever data are used in the numerator, the unemployment rate for unskilled is higher.

17 Census table reproduced in Jones, K. and Smith, A. D., The Economic Impact of Commonwealth Immigration, National Institute of Economic and Social Research, 1970, p. 168.Google Scholar

18 Gazette, D.E., 03 1969, p. 215.Google Scholar

19 Reder, M. W., ‘The Theory of Occupational Wage Differentials’, American Economic Review, 12 1955.Google Scholar

20 D.E. Earnings Survey unpublished tabulation and Gazette, D.E., 04 1971, pp. 378–9.Google Scholar

21 Baumol, W. J., ‘Macro-Economics of Unbalanced Growth: The Anatomy of Urban Crisis’, American Economic Review, 06 1967.Google Scholar

22 Kaldor, N., ‘Causes of the Slow Rate of Economic Growth of the UK’, Inaugural Lecture, Cambridge University Press, 1966.Google Scholar

23 NBPI, Pay and Conditions of Service of National Health Service Ancillary Staff: Report No. 166 (HMSO Cmnd. 4644, 1971), p. 25.Google Scholar

24 D.E. Earnings Survey, unpublished table.

25 Gazette, D.E., 03 1971, p. 262.Google Scholar

26 Ornati, O., Poverty Amid Affluence, Twentieth Century Fund, New York, 1966.Google Scholar