Re: Wage Setting

[wesburt@xxxxxxxx]

To: Jozef Imrich <chezimrich@xxxxxxxxxxx>

Hello Jozef,

You may already have this source of labor cost data,
but there are some new features, so it seemed
worthwhile to pass it along.

I received a complementary copy of "A Chart book of
International Labor Comparison," in print form.  The
Appendix A on "Sources and Methods" states that the
source documents are available at the Bureau Of
Labor Statistics web site at <http://www.bls.gov/fls/>

The new feature that pleased me was the 19 nation
chart of GDP/capita, and the 19 nation chart of "Total
Taxes On Labor" as a % of GDP.  Now I can re plot Fig1
on the URL in the signature below with current data
from a single source.

I hope this will be helpful.

Regards,

Wes Burt

To further explore "The Optimum Policy" illustrated
at URL <http://www.epie.org/cyber-soc/default.htm>
please join me at list <TOP-subscribe@xxxxxxxxxx>.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
On Wed,  9 Jul 2003 12:48:12 +0000 Jozef Imrich
<chezimrich@xxxxxxxxxxx> writes:
> If anyone on the list is aware of any post 2000 comparative
> wage figures at the OECD or international level (preferably
> coupled with ananalysis of wage setting systems) please
> post them to me.
>
> I gather wage setting system was used to soften impacts
> of deflation depression...
>
> PS: I czeched OECD website ...but without much success.
>
> Thank you
>
> Jozef
>
> Centralised Wage Bargaining: Theoretical
> Considerations and Some Norwegian Experiences
> *
> Jon Reiersen
> Department of Economics and Business Administration
> Vestfold College
> P.O. Box 2241, N-3103 Tonsberg
> NORWAY
> E-mail: jon.reiersen@xxxxxxx
> Abstract:
> Are centralised systems of wage setting good or bad for economic
> performance? The theoretical literature gives no clear answer.
> Multiple
> factors
> contribute to good economic performance, and different wage
> bargaining
> systems may
> affect each one of these factors differently. While centralised
> bargaining might be
> good for unemployment by restraining unions' wage demands and
> creating
> better
> incentives for investment, it may lead to lower work effort and
> greater
> conflicts over
> work organisation compared to a system with local bargaining.
> Against
> this
> background the performance of the Norwegian system of centralised
> wage
> bargaining
> is investigated. It is argued that although this system has
> performed
> quite favourably in
> sustaining low unemployment rates, it is facing major pressure for
> change as a result
> of growing internationalisation, and changes in occupational
> structure
> and production
> techniques.
> *
> This is a revised version of a paper originally prepared for the
> course
> `Comparative Perspectives on
> Work and Organisation', Oslo Summer School in Comparative Social
> Science. I thank Richard Brooks,
> Arne L. Kalleberg and Kalle Moene for helpful comments on earlier
> drafts
> of the paper.
>
------------------------------------------------------------------------
> Page 2
>
> 3. Norwegian
> Experiences
> By comparison with other countries, the Norwegian wage bargaining
> system
> has been
> highly centralised.
> 3
> While wage negotiations during the 1950s generally took place at
> the industry level, they became more and more centralised during the
>
> 1960s (Dølvik
> and Stokland, 1992). There was a move towards decentralisation in
> the
> early 1980s,
> but this trend was reversed in the late 1980s. In 1988 to 1990 the
> wage
> negotiations
> were some of the most centralised in the history of Norway (see
> below).
> As Wallerstein (1990) notes: `
> The conventional wisdom in economics regarding the labour
> market is that competition and wage flexibility are good things. Yet
>
> centralised, encompassing trade
> unions are the unions that are least constrained by labour market
> competition. Moreover, the
> standardisation of wages in different regions associated with
> centralised bargaining reduces the
> sensitivity of wage levels to local labour market conditions.
> ' (p. 983). According to this
> perspective Norway should face major problems achieving full
> employment,
> but the
> Norwegian experience runs counter to the view that the stronger the
> unions, the
> worse off the economy. As Table 1 shows, Norway managed to hold
> unemployment
> down to approximately 2% when it increased dramatically in a number
> of
> other
> European countries.
> 3
> See Calmfors and Driffil (1988), Iversen (1996), OECD (1997), and
> Wallerstein (1999) for a detailed
> comparison of wage bargaining institutions across countries. Dølvik
> and
> Stokland (1992) give a
> historical background of the Norwegian wage bargaining system.
>
------------------------------------------------------------------------
> Page 11
> 10
> Table 1
> Standardised unemployment rates in some European countries
> Average rate of unemployment
> 1974-81
> 1982-88
> 1989-92
> 1993
> 1995
> 1999
> Belgium
> 7.8
> 11.5
> 7.5
> 8.6
> 9.4
> 9.0
> France
> 5.4 9.6
> 9.5 11.7 11.6 11.3
> Germany 3.5
> 6.7
> 4.9
> 7.9
> 8.2
> 8.7
> Italy
> 7.1 9.8 10.4 10.2 12.2 11.4
> Netherlands 5.9
> 10.6
> 7.4
> 6.2
> 6.5
> 3.3
> Norway 1.8
> 2.7
> 5.4
> 6.0
> 4.9
> 3.2
> Sweden 2.0
> 2.7
> 2.6
> 9.5
> 9.2
> 7.2
> Switzerland 0.3
> 0.7
> 1.3
> 3.8
> 3.3
> 3.8
> United Kingdom
> 6.1
> 11.0
> 8.1
> 10.4
> 8.7
> 6.1
> Source: OECD
> A possible explanation, along the lines suggested in the theoretical
>
> literature reviewed
> above, is that Norway managed to hold unemployment down because
> centralised
> encompassing unions had internalised the macroeconomic consequences
> of
> their
> actions and had agreed to lower real wage levels. In addition, by
> the
> adoption of the
> Rehn-Meidner principle of solidaristic wage policies, wages were
> successfully held
> back in the most productive enterprises, in turn facilitating high
> investments and
> productivity growth.
> However, as shown in Table 1, the difference between unemployment in
>
> Norway and in the rest of Europe narrowed during the early 1990s.
> Unemployment in
> Norway rose from approximately 2% in 1986 to a historical peak of 6%
> in
> 1993. If we
> also include workers enrolled in active labour market programs, the
> unemployment
> rate was as high as 9%. But, as can be seen from Table 1, the
> unemployment rate fell
> again during the late nineties. Today, Norway is back to almost full
>
> employment. What
> happened?
>
> http://www.lights.com/epi/catalog/subjects/2419.html
>
> Page 1
> Cross-country Comparisons of Wage Rates:
> The Big Mac Index
> Orley Ashenfelter and ät!p·n Jurajda
> Princeton University and CERGE-EI/Charles University
> October 200"
> Abstract
> Comparisons of wage rates across countries have become key
> ingredients
> in
> evaluating theories of international trade, the role of trade in
> exacerbating
> wage inequality, and the role of capitalist reforms in economic
> transition.
> Despite the importance of cross-country wage comparisons, it is
> widely
> agreed that no credible, comparable wage estimates exist. This paper
> suggests a simple procedure for comparing the average wage rate of
> workers in identical jobs in different countries and over time. The
> procedure
> is implemented with new data we have collected on average wage rates
> in
> McDonald's restaurants in 27 countries that are at dramatically
> different
> stages of economic development. Real wage rates are computed at
> current
> exchange rates, and also after adjustment for purchasing power
> parity in
> units of
> ì
> Big Macsî per hour. The results indicate that real wages for
> identical jobs in the U.S., Japan, and Western Europe are some four
> to
> five
> times higher than in Eastern Europe, Korea, or Brazil, and an order
> of
> magnitude higher than in China, India, or Colombia.
>
> Table 1: McDonalds Cashier or Crew Wages and Big Mac Prices,
> December
> 1998
> Estimated
> hourly
> wage rate
> Reported
> Big Mac
> price
> Exchange
> Rate
> per $1
> $ hourly
> wage
> rate
> $ Big
> Mac
> price
> Economist
> $ Big Mac
> 3/99**
> Big Macs
> per hour
> of work
> Country
> (1)
> (2)
> (3)
> (4)
> (5)
> (6)
> (7)
> Russia
> 8.00
> 25.5
> 19.57
> 0.41
> 1.30
> 0.31
> Korea
> 1700
> 3000
> 1210
> 1.41
> 2.48
> 0.57
> Brazil
> 2.87
> 4.45
> 1.73*
> 1.66
> 2.57
> 1.71
> 0.65
> Poland
> 4.12
> 5.3
> 3.50
> 1.18
> 1.51
> 1.38
> 0.78
> Czech Rep.
> 45.00
> 53
> 30.30
> 1.49
> 1.75
> 0.85
> UK
> 3.60
> 0.62*
> 5.80
> 3.07
> 3.07
> 1.89
> USA
> 6.00
> 1.00
> 6.00
> 2.43
> 2.43
> 2.12
> Germany
> 11.28
> 4.95
> 1.67
> 6.76
> 2.97
> 2.72
> 2.28
> France
> 40.22
> 17.5
> 5.76
> 6.99
> 3.04
> 2.87
> 2.30
> Italy
> 10417
> 4500
> 1646
> 6.33
> 2.73
> 2.5
> 2.31
> Belgium
> 280.00
> 114
> 34.50
> 8.12
> 3.30
> 2.46
> Sweden
> 64.90
> 25
> 8.03
> 8.09
> 3.11
> 2.88
> 2.60
> Japan 844
> 280
> 120*
> 7.03
> 2.33
> 2.44
> 3.01
> Note: First two columns in local currencies. See the Appendix Table
> for
> detailed data source information
> * Estimate based on the Economist
> ** The correlation between the reported McKinsey and Economist Big
> Mac
> prices is 0.87.
>
> Table 2: McDonald's Cashier or Crew Wages and Big Mac Prices, August
>
> 2000
> Estimated Reported Exchange $ hourly
> $ Big Big Macs
> hourly
> Big Mac
> Rate
> wage
> Mac
> per hour
> wage rate
> price
> per $1
> rate
> price
> of work
> Country
> (1)
> (2)
> (3)
> (4)
> (5)
> (7)
> India
> 12.00
> 52.00
> 41.3
> 0.29
> 1.26
> 0.23
> Columbia
> 1,200
> 5,300
> 2,181
> 0.55
> 2.43
> 0.23
> China
> 3.50
> 9.80
> 8.28*
> 0.42
> 1.18
> 0.36
> Indonesia
> 5,000
> 14,500
> 7,945
> 0.63
> 1.74
> 0.36
> Venezuela
> 900
> 2,200
> 689
> 1.30
> 3.19
> 0.41
> Thailand
> 23.50
> 55.00
> 41.01
> 0.57
> 1.34
> 0.43
> Philippines
> 25.00
> 54.90
> 44.50
> 0.56
> 1.23
> 0.46
> Russia
> 14.00
> 29.50
> 27.69
> 0.51
> 1.07
> 0.47
> Brazil
> 1.61
> 1.79*
> 0.89
> 1.65*
> 0.54
> Argentina
> 1.50
> 2.50
> 1.00
> 1.50
> 2.50
> 0.60
> Malaysia
> 3.00
> 4.30
> 3.80
> 0.79
> 1.13
> 0.70
> Korea
> 2,100
> 3,000
> 1,115
> 1.88
> 2.69
> 0.70
> Turkey
> 1,133,000 1,500,000 647,335
> 1.75
> 2.32
> 0.75
> Czech Rep.
> 45.00
> 55.00
> 38.74
> 1.16
> 1.42
> 0.82
> Poland
> 5.01
> 5.80
> 4.36
> 1.15
> 1.33
> 0.86
> Taiwan
> 66.00
> 70.00
> 30.00
> 2.20
> 2.33
> 0.94
> Singapore
> 4.00
> 3.20
> 1.73
> 2.31
> 1.85
> 1.25
> Hong Kong
> 14.50
> 10.20
> 7.80
> 1.86
> 1.31
> 1.42
> Italy (2001)
> 10,000
> 4,900
> 1,668
> 6.00
> 2.94
> 2.04
> UK
> 4.00
> 1.90
> 0.63*
> 6.35
> 3.02
> 2.11
> Germany
> 11.25
> 4.99
> 2.11*
> 5.33
> 2.36
> 2.25
> Canada
> 6.95
> 2.89
> 1.54
> 4.51
> 1.87
> 2.40
> USA
> 6.50
> 1.00
> 6.50
> 2.51*
> 2.59
> Sweden
> 65.00
> 25.00
> 9.19
> 7.07
> 2.72
> 2.60
> Belgium
> 304.35
> 115.00
> 44.11
> 6.90
> 2.61
> 2.65
> France
> 42.02
> 18.50
> 7.07*
> 7.12
> 2.62
> 2.72
> Japan
> 850
> 280
> 110
> 7.73
> 2.55
> 3.04
> Note: First two columns in local currencies
> * Estimate based on the Economist. The correlation between the
> reported
> McKinsey and Economist
> Big Mac prices from April 2000 is 0.99
>
> Table 3: McDonald's Crew Wages and Big Mac Prices: Wage Inequality,
> PPP
> adjustment, and Other Wage Measures
> $ hourly PPP hourly Big Macs Big Mac
> GDP PPP Wage
> wage rate wage rate per hour parity
> in manuf. in manuf. of a laborer per cap. inequality
>
> http://economics.uchicago.edu/download/bigmac.pdf
>
>
http://www.workplace.gov.au/Workplace/WPDisplay/0,1280,a3%253D3961%2526a0
%253D0%2526a1%253D517%2526a2%253D533,00.html
>
> http://www-bib.hive.no/tekster/hveskrift/notat/2001-11/not11-2001.pdf
>
> http://www.emory.edu/SOC/lkenworthy/institutionalcoherence.pdf
> http://www.nber.org/feldstein/siebert.html
>
> http://ideas.repec.org/p/hhs/iuiwop/0529.html
> http://ideas.repec.org/p/mcm/cilnwp/10.html
> http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=3448
> <a
>
ages/documentredirection?paramID=31606&language=EN&col=OECDDCoreLive');"
>
> class="textlink">
> Benefits and Wages: OECD Indicators - 2002 Edition</a>
>
>
http://econpapers.hhs.se/HoPEc/504848504949505668658673689566766578677270
7679876982.htm
>
>
> http://www.lowpay.gov.uk/lowpay/report3/013min.html
>
>
>
> The VOW Roundtable
>               connect : contribute : create
>
> http://www.onlineopinion.com.au/2002/feb02/cumes.htm
> http://www.authorsden.com/jozefimrich
>
> Celebrate great ideas. Voice the sum of all hope. Change the world
> and
> your life.
>
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