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UBC Theses and Dissertations

Wage structure and the wage determining process for six British Columbia industries. Colli, Terry Ross


This thesis is an attempt to combine two opposing arguments which have appeared in the literature of labour economics for nearly 25 years. The analysis deals with the formulation of a collective bargaining model which yields some insight into the wage-determining process. The economic criteria for a wage settlement proposed by J. T. Dunlop in his book, Wage Determination Under Trade Unions, are combined with the 'political' or 'power' variables which A. M. Ross had advocated as the most important determinants of wages in his book, Trade Union Wage Policy. The result is an analysis very similar to that of recent bargaining theory studies. Six industries from the British Columbia economy are examined within the concept of the model developed. These industries produce a major part of the output of this region. The examination of these industries, therefore, provides a key to the comprehension of the general trends and forces at work in the British Columbia labour market. The model attempts to discover the variables most significant in explaining the movement of wages in each industry from 1948 to 1968. The variables examined represent a combination of the economic and political forces which are hypothesized to act upon the wage determination process. In addition, the thesis examines those industries in the-context of a general wage structure. It is hypothesized that the existence of such a structure plays a large role in the wage determining process and has a significant influence upon trends in the economic activity of the province. The end result will be an explanation of the single and collective wage movements of these six industries. The findings generally support the theoretical hypothesis that the wage determining process is subject to both political and economic forces. Economic variables are able to confine wage settlements within a range. The size of this range also depends upon economic forces. Within the range, however, bargaining may involve a multiplicity of criteria. Both the union and the firm will often choose some easily observable criteria upon which to base wage settlements. This study attempts to determine the main criteria chosen within each industry. The conclusions reached show that wage comparisons made among industries by both workers and employers are able to explain the largest part of wage movements. A bargaining theory model is supported and ample evidence of a wage structure which plays an important role in the wage determining process is found.

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