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An analysis of base wage rates for select bargaining units in British Columbia Turner, Thomas Sydney

Abstract

The purpose of this study was to explore, analyze and attempt to answer a series of questions involving changes in the negotiated base wage rates in three British Columbia Industries during the 1958-1969 time period. The three industries were the lumber and logging industry, the pulp and paper industry and the construction industry. Changes in the industry base wage rates were examined from the point of view of the bargaining units. In total seven bargaining units were included. One of the units represented the lumber and logging industry, another unit represented the pulp and paper industry and the remaining five units represented the construction industry. The first question upon which the paper focused was how did the changes in the base wage rates compare with one another? After explaining the nature of the bargaining units and presenting the base rates, the base rates were then compared in both absolute and percentage terms. Among other results, it was found that the absolute base rate rankings remained unchanged during the 1958-1966 time period. But since that time the rankings and the relative positions of the construction industry bargaining units have changed quite markedly. It was also found that there was a positive correlation between the mean percentage increase in the base rate and the standard deviation of the base rates when all the industries were considered. The second question of concern was how did the changes in the base wage rates move in relation to one another? The statistical tool of correlation analysis was employed to find an answer to this question. The results of the analysis substantiated the often made assumption that the base rates in the lumber and logging and the pulp and paper bargaining units are closely related to one another. However the often made assumption that the base rates in the construction industry bargaining units are very closely related was not substantiated by the results of the correlation analysis. The third question the paper focused on was how did the changes in the base wage rates move in relation to changes in select economic variables? The economic variables studied were the consumer price index, employment, unemployment, profits and productivity. As in the previous question, correlation analysis was employed to measure the relationships. In general the results of the analysis indicated that base rate changes move in close relation to changes in unemployment. The lumber and logging and the pulp and paper units correlated well with the equivalent year changes in unemployment. The construction industry units, on the other hand, correlated well with the one year lag changes in the unemployment variable. The results also indicated that the consumer price index variable correlated quite closely with most of the bargaining units. The other economic variables, in the majority of cases, showed weak or nonexistent relationships with base rate changes. The final question upon which the paper focused was what was the explanation for the differences in the interindustry base wage rate changes? Five explanatory variables were considered. These were market or competitive conditions, productivity differences, differences in the degree of concentration and unionization and differences in the proportion of labour costs to total costs. After a discussion of each of these explanatory variables it was concluded that the market or competitive conditions explain the differences in the interindustry base wage rate changes.

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