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Wage Trends
and Wage Policies:
Various Foreign Countries
Bulletin N o. 934
UNITED STATES DEPARTMENT OF LABOR
L. B. Schwellenbach, Secretary
BUREAU OF LABOR STATISTICS
Ewan Clague, Com m issioner
For sale by the Superintendent of Documents, U. S. Government Printing Office, Washington 25, D . G.
Price 25 cents
Contents
Page
Great Britain: Wage trends and policies, 1938-47------------------------------------------Wage trends, 1938-47_______________________________________________
Wage policies, 1938-47______________________________________________
Appendix—Great Britain, as of February 15, 1948________________________
Wage trends_____________________________________________________
Wage and price policies____________________________
France: Wage trends and wage policies, 1938-47-----------------------------------------------Wage trends, 1938-47-----------------------------------------Wage-price policies, 1939-47_________________________________________
Appendix—France, as of February 15, 1948________________________________
Money wages______________________________________________________
Real wages______________________________________________________
Wage-price policies_________________________________________________
1
1
6
8
8
9
11
20
21
Sweden: Wage trends and wage policies, 1939-47_____________________________
Money wages____________________________________________________
Real wages______________________________________________________
Wage structure changes___________________________________________
Wage and price policies-----------------------------------------------------------------Appendix—Sweden, as of February 15, 1948_____________________________
Wage-price changes_______________________________________________
Wage-price policy________________________________________________
22
22
23
24
25
27
27
27
Denmark: Wage trends and wage policies, 1939-47___________________________
Wage trends, 1939-47-------------------------------------------------------------------Wage structure, 1939-47__________________________________________
Wage and price policies------------------------------------------------------------------
28
28
29
30
Belgium: Wage trends and wage policies, 1939-47______________________________
Wage and price trends______________________________________________
Wage level in 1946_______________________________________________
Wage and price policies___________________________________________
Prices and wages in the Austrian Economy, 1938-47------------------------------------------The Austrian economy______________________________________________
Price trends_____________________________________
Wage trends_____________________________________________________
Price and wage policy, 1938-47_____________________________________
Switzerland: Wage trends and wage policies, 1939-47___________________________
Money wages______________________________________________________
Real earnings______________________________________________________
Wage structure changes___________________________________________
Wage and price policies___________________________________________
32
32
31
31
36
38
39
45
45
35
35
43
43
44
Canada: Wage trends and wage policies, 1939-47---------------------------Money wages______________________________________________________
Real wages-------------------------------------------------------------------------------------Wage structure changes___________________________________________
Wage and price policies___________________________________________
Appendix—Canada, as of February 15, 1948----------------------------------------------Real wages________________________________________________________
Wage-price policy--------------------------------------------------
48
49
50
51
52
53
Appendix: Hours of work------------------------------- ------------------- ------- ----------------
53
hi
11
16
19
19
48
53
Letter of Transmittal
U nited States D epartment of L abor,
B ureau of Labor Statistics,
Washingtony D. C. March 4, 1948.
T he Secretary of Labor:
I have the honor to transmit herewith a series of reports on Wage Trends and Wage
Policies 1938-48 in eight foreign countries. These were prepared by members of the Staff
on Foreign Labor Conditions under the direction of Faith M. Williams.
The close economic ties between these countries and the United States make it important
for the public in this country to have as much information as possible about their wage
policies and the. wages paid in their principal industries. The countries included here are,
with the exception of Canada, members of the Committee on European Economic Coopera
tion: Great Britain, France, Sweden, Denmark, Belgium, Austria, and Switzerland.
Within the limits of the available data, this bulletin presents the most important facts
on the current wage situation in these countries, and indicates what other information can
be gathered from the original sources.
E wan Clague,
Commissioner.
Hon. L. B . SCHWELLENBACH,
Secretary of Labor.
Great Britain: Wage
Trends and Policies,
1938-47
Jean A. F lexner 1
W ages and prices in Great Britain were rela
tively stable during the World War II and postwar
periods, compared to the many-fold increases in
wages and prices in France2 and other countries
of Europe.
Although Great Britain had succeeded in main
taining the stability of the wage earners’ income
and purchasing power up to the late summer of
1947, her economy was being subjected to its
greatest strain; her long-standing policies in regard
to wage determinations were being put to the
severest test thus far.
British weekly wage rates rose about 66 percent
from September 1939 to May 1947. Weekly
earnings in October 1946 were 90 percent higher
than in October 1938.3 Prices also rose; according
to the official cost-of-living index, retail prices both
in October 1946 and in May 1947 were 31 percent
above 1938 and 1939 levels. Even allowing for a
considerable understatement in the cost-of-living
* Of the Bureau's Staff on Foreign Labor Conditions. This study is
based on official British sources, and on trade-union and other publications.
* See August 1947 issue of Monthly Labor Review (pp. 149-157).
* The percentage increase in rates of wages for a full week's work, is esti
mated each month by the Ministry of Labor for industries, occupations, and
localities in which changes are regulated by collective agreements, arbitration
awards, or statutory orders. In combining these percentage increases into a
general average the various components are weighted according to the em
ployment distribution in 1939. The average percentages are considered to
be rough approximations only.
The Ministry of Labor also obtains returns from employers, at approxi
mately 6-month intervals showing number of wage earners actually at work,
aggregate earnings, and total number of man-hours worked, for the following
groups: the principal manufacturing industries; mining, except coal; publicutility services; building; transport, except railways; and government in
dustrial establishments. The returns cover almost 6 million workers. The
averages for individual industries are weighted on the basis of total numbers
employed at the time in each industry. Two part-time women workers are
counted as one full-time worker. The index of weekly earnings is based on
national averages of these returns as calculated by the Ministry of Labor.
index (recently discontinued by the Government
because of its deficiencies) real wages in 1947
were probably near or even slightly above prewar
levels.
The wage structure in Great Britain did, how
ever, undergo changes that were similar to those
occurring in many other countries. There was
a tendency toward the narrowing of differentials
between male and female, skilled and unskilled
workers, and between various industries.
Wage policies as well as wage trends differed
in Great Britain from those of many continental
countries. Government concentrated upon price
controls for necessary foods and provision of a
greater supply of “utility” goods in the clothing
and housefumishing categories, leaving wages
subject to voluntary controls, and thus sought to
minimize one of the main sources of demands for
higher wages—the rising cost of living.
In spite of the relative stability of wages and
prices in Great Britain, even a moderate wageprice spiral can further impair her ability to
export enough to pay for necessary imports, in
view of her loss of overseas investments, shipping,
and other assets during the war. To provide
both for exports and for home consumption,
Britain must pay close attention to productivity,
labor costs, and total output. In this critical
postwar period, a Labor Government came to
office, committed to a program of sweeping social
and economic reforms. Moreover, full employ
ment of the available labor force and manpower
shortages have enhanced the bargaining power of
the trade-unions, and while moderate in demands
for wage increases, they have vigorously and suc
cessfully pushed demands for shorter hours without
loss of pay, for longer paid vacations and more
paid holidays. The Government has tried to
reconcile trade-union demands and social reforms
with Britain’s acute need for more exports at
steady costs by a variety of measures designed to
improve industrial efficiency. The Government
has also warned that Britain cannot afford the
luxury of shorter hours unless it can be shown
that total output will not suffer.
Wage Trends, 1938-474
Money Wages: In October 1946 (the latest date
for which data are available) average weekly
* See also Wartime Hours and Earnings in the United States and Great
Britain, Monthly Labor Review, July 1944. Reprinted as Serial No. R 1670.
o
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
earnings for 16 major industrial groups surveyed
by the Ministry of Labor were 90 percent higher
than in October 1938, and even slightly exceeded
the wartime peak. Earnings declined after July
1944, but rose again sharply after January 1946
(table 1).
The rise in earnings during the war period is
attributable in part to the extension of wageincentive systems, to workers' shifting from lowerpaid into higher-paid occupations, as well as to
longer horns, overtime rates, and to increases in
wage rates.
T able
1.— United Kingdom: Indexes of weekly wage rates
and earnings and cost of living, 1988-47 1
Dates
Cost-ofliving
index
Weekly
wage-rate
index
Weekly
earnings
index
1938 (October)........................................
1939 (September)...................................
100
100
*100
100
100
1940.........................................................
1941.........................................................
1942.........................................................
1943..........................................................
1944.........................................................
1945.........................................................
1946.........................................................
119
128
129
128
130
131
131
111-112
121-122
130
135-136
142-143
149-150
161-162
*130
*142
4146-160
4165-176
4179-182
4176-180
4174-189
1946: January.........................................
February......................................
March...........................................
April_...........................................
May..............................................
June...............................................
July...............................................
August..........................................
September....................................
October.........................................
November....................................
December.....................................
131
131
131
131
132
131
132
132
131
131
131
132
153
157
157-158
158
159-160
160-161
161
163-164
163-164
164
164
165
174
1947: January.........................................
February..................... ................
March...........................................
April ..........................................
May..............................................
June..............................................
July..............................................
132
131
132
131
131
131
131
165
165
165-166
165-166
166
166-167
166-167
189
190
1 Source: Ministry of Labor and National^Service, and Central Statistical
Office, London.
* This figure has been estimated from the Ministry’s weekly wage-rate
index based on 1924 which was 106 both in the fourth quarter of 1938 and the
third quarter of 1939.
* Figure relates to July.
4 Figures relate to January and July.
During the war years, hours were considerably
lengthened, the weekly average reaching 50 in
July 1943; they were gradually reduced to a low
point of 45.8 in January 1946. In October 1946
the average (46.2) was not very different from
that (46.5) for October 1938. Since VJ-day, the
scheduled hours of about 5.5 million workers
were reduced from 47 to 44, according to the
Minister of Labor’s statement in Parliament on
July 3, 1947. Hours were shortened without
reduction in weekly pay, and in some cases with
increased pay, in a number of important industries,
including agriculture, printing, textiles, engineer
ing trades, government industrial establishments,
shipbuilding and repair, road haulage, coal mines,
and finally the railroads. The National Union
of Mineworkers decided in July 1947 to ask for a
weekly increase of £1, following the introduction
of the 5-day week on May 1. Agricultural work
ers obtained a second wage increase effective in
August 1947.
The guaranteed workweek has also increased
workers’ incomes. I t was introduced by Govern
ment order during the war as a safeguard for
workers who were frozen in their jobs, on condition
that they were willing to perform work other than
their regular jobs, and was later incorporated into
many postwar collective-bargaining agreements.
The guaranty may cover the full workweek (e. g.,
44 hours in government industrial establishments)
or a portion of it. Workers are paid for a guaran
teed number of hours, in spite of irregularities or
interruptions in the flow of work. During the
shut-downs occasioned by the fuel crisis in Febru
ary and March 1947, workers covered by such
agreements which did not specifically except cir
cumstances beyond the employers’ control, were
paid to stand by unless they were given formal
notice of lay-off. It is estimated that in 1947
about 7 million employees had at least part of
their workweek guaranteed.
Wage-rate increases were an important factor in
increased earnings, especially during the latter part
of the period under consideration. The official
weekly wage-rate index rose from 100 in October
1938 to 142-143 in 1944; the earnings index
reached a wartime peak of 182 in July 1944.
Thus, about half the increase in weekly earnings
could be attributed to increases in rates and the
remainder to the other factors mentioned and to
changes in piece rates. After mid-1944, time-rate
changes became even more important, since hours
tended to drop and employment tended once more
to shift toward the lower-paid civilian goods in
dustries. Between 1944 and October 1946, the
rise in the weekly wage-rate index again greatly
exceeded the rise in earnings (see table 1). The
increase in rates helped to offset a decrease in hours
and cut-backs in employment in high-paying war
industries.
Rate increases were in many industries tied
automatically to increases in prices and living
costs. Collective agreements covering 1.5 million
R RlTtSH WAGE TRENDS AND POLiCIES
workers in 1939 regulated wage rates according to
cost-of-living sliding scales; coverage in April 1947
was 2.5 million. A majority of these workers re
ceived additional increases in wage rates or war
supplements. The industries affected by cost-ofliving sliding-scale arrangements include coal min
ing, iron and steel, certain textile trades (including
wool manufacture), boots and shoes, woodworking,
building and civil engineering, and local authori
ties’ nontrading services.
After August 1946, married persons with chil
dren received supplemental family allowances.
Under an act of June 15,1945, payments of 5s. per
week are made for every child except the first, up
to the age of 15, or 16 provided the child is attend
ing school full time or is apprenticed. The scheme
applies to families at all income levels. Earnings
data do not include these supplements.
Beal Wages: In order to give a true picture of
changes in wage earners’ purchasing power, money
earnings must be deflated by an index showing the
advance, during the period, of retail prices for
items commonly consumed by wage earners’ fam
ilies. The official cost-of-living index, started
3
during World War I, was based on an obsolete
pattern of wage earners’ expenditures, however.
(The relevant studies had been made in 1904,
with some later adjustments.) In the spring of
1947, on the advice of an advisory committee, the
Government decided to discard the old and, pend
ing the development of a permanent index, to
substitute an interim index of retail prices.4
During the period October 1938 to October
1946, the cost-of-living index (September 1939=
100) rose from 100 to 131, and was stabilized close
to that figure until its termination in June 1947
(table 1). This very moderate increase may be
compared with estimates derived from another
source. Data on total personal expenditures on
consumers’ goods and services for all income levels
have been published for a number of years by the
British Treasury, valued both at current prices
and at 1938 prices. These data reveal that the
prices of consumers’ goods and services increased
approximately 53 percent between 1938 and 1946.
On the basis of the same figures, Prof. R. G. D.
« See Monthly Labor Review, August 1947, p. 195.
INDEX
200
180
160
140
120
100
80
UNITED STATES DEPARTMENT OF LABOR
BUREAU OF LABOR STATISTICS
785083— 48------- 2
SovrCf- MINISTRY OF LABOUR ft NATIONAL SERVICE,
AND CENTRAL STATISTICAL OFFICE. i-ONOCN.
4
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
Allen, a member of the Ministry of Labor’s Cost
of Living Advisory Committee, has unofficially
estimated the price rise from 1938 to mid-1947
to be about 60 per cent.6
Further light is shed on the question of post
war levels of living by table 2. Increased money
earnings could not be spent on more or better
clothes and household goods, and could purchase
but little if anything more in the way of housing,
because the supply of such things was limited.
On the other hand, the price and rationing policies
assured all groups in the nation a fair share of the
available supplies of the most necessary commodi
ties, based on family needs, at reasonable prices.
A marked shift from private motoring to public
transportation, and an increased expenditure for
travel, entertainment, tobacco, alcoholic beverages,
fuel and light, are indicated in table 2; expendi
tures for household goods and clothing declined.
T able 2.— United Kingdom. Personal expenditures for
consumers1 goods and services, 19S8 and 1946, revalued
at 1988 prices1
Expenditures (in
millions)
Items
All Hptus 2
-
Food________________________________
Household goods_______________________
Clothing.................... ................... ........ ..........
Motoring (private)_____________________
Fuel and lig h t............ .............. ....................
Income in kind (armed forces)___________
Alcoholic beverages (including beer)______
Tobacco______________________________
Rent___________ ____________ ________
Books, etc____________________________
Travel____ __ ________________________
Communications______________________
Entertainment________________________
Other goods and services8_______________
Percent
change
1938
1946
£4,262
£4,296
+1.03
1,258
288
446
127
195
17
285
177
491
64
160
29
64
668
1,232
191
330
71
215
81
320
236
514
88
226
42
102
576
—2.1
—33.7
-2 6 .0
—44.1
+10.3
+376.5
+12.3
+33.3
+4.7
+37.5
+41.3
+44.8
+59.4
-1 2 .5
< Source: Great Britain, Treasury, National Income and Expenditure of
the United Kingdom, 1938 to 1946, table 26,1947. (Cmd. 7099.)
* The total is not the exact sum of items shown because a small adjustment
factor shown in the original table is omitted here.
• Includes medical service, drugs, personal and domestic service, certain
recreational expenditure.
Taxation policies have tended to favor the
wage earner. Labor’s share of total private
income from work and property before taxes
remained stable during this period; after taxes
were paid, labor’s share improved relatively
compared with other groups, as shown in the
following statement.
* London & Cambridge Economic Service, Bulletin in, Vol. XXV,
August 11,1947, p. 76; Bulletin I, Vol. XXVI, January 18,1948, p. 18.
Percentage distribution of total private income from work
and property 1
Before taxes on income:
Wages__________________
Salaries_________________
Interest, profits, and rent..
19S8
1945
1946
37
23
40
37
20
43
38
21
41
Total...................... ..........
100
100
100
After taxes on income:
Wages__________________
Salaries_________________
Interest, profits, and rent__
39
24
37
44
22
34
44
23
33
T o ta l.................... ............
100
100
100
* Source: Great Britain Treasury. National Income and Expenditure of
the United Kingdom, 1038-46. Table 9, p. 11. London 1947. (Cmd.7099.)
Changes in Wage Structure: Average weekly earn
ings of all workers in 16 industry groups increased
from 53s. 3d. in October 1938 to 101s. in October
1946, or 90 percent (table 3). The rate of increase,
T able 3.— United Kingdom: Average weekly earnings by
industry group, 1988 and 1946 1
Industry group
Transport (except railways)............
Treatment of nonmetal mine and
quarry products *..........................
Building, contracting.......................
Metal, engineering and shipbuildPublic-utility services......................
Ironstone,etc., mining and quarrying..
Printing, paper, etc...........................
Chemicals, paint, etc...................... .
Woodworking....................................
Leather, fur, etc................................
Brick, pottery, glass.........................
Miscellaneous manufacturing..........
Food, drink, and tobacco.................
Textiles..............................................
Clothing.............................................
Government industrial establish
ments...............................................
Total.
Railwaymen (men only).
Coal miners: in cash __
in kind.— .
Weekly earnings,
all workers
Per Rankin—
cent
in
Oct. 1938 Oct. 1946 crease* 1938 1946
8. d.
67 6
8. d.
110 4
68
1
3
61
61
6
3
116
103
0
0
90
68
2
3
1
6
59 5
59 5
56 5
55 5
55 4
52 4
47 10
47 9
47 7
46 10
38 3
35 7
114
97
107
96
100
99
95
96
100
87
78
70
4
6
8
11
10
10
7
11
7
10
3
0
92
63
90
68
83
93
104
103
116
87
107
100
4
5
6
7
8
9
10
11
12
13
14
15
2
10
5
11
7
9
13
12
8
14
15
16
108 10
54
53
101
0
90
9 <121
9 114
2
4
6
3
1
77
105
*68
55
2
3
4
1 Source: Ministry of Labor Gazette, November and December 1940;
March and April 1947. Ministry of Fuel and Power Statistical Digest, 1946
(Cmd. 6920), table 40.
* Includes coke, lime and cement, the group listed for October 1938.
3 March 1939.
* March 1946.
»Calculated by Ministry of Labor on basis of total numbers employed in
each industry group. See also footnote 6, p. 289.
In October 1938, 1 shilling was worth 23.8 cents, United States currency;
in October 1946, 20.17 cents. Comparisons of wages between countries are
difficult to interpret because of the fact that foreign exchange rates do not
truly reflect international differences in living costs and because of the lack
of information on relative productivity by industry in different countries.
On the average, differences in productivity markedly favor the United States.
Furthermore, there are marked differences in productivity in different
industries.
BRITISH Wage trends ARB Policies
however, was by no means uniform in the different
industry groups. While railways, other forms of
transport, metal, engineering and shipbuilding re
mained at the top, certain industries dropped back
(e. g., building, from third to sixth place; public
utilities, from fifth to tenth place; and printing
and paper, from seventh to eleventh place). The
relative position of coal miners and of workers in
miscellaneous manufacturing improved greatly.
On the other hand, textiles, brick, pottery, glass,
clothing, food, drink and tobacco, and leather all
remained relatively low paid.
Differentials between the highest and lowest
paid industries, however, narrowed somewhat
during the period: in 1938 the lowest paid group,
clothing, was 52.7 percent of the highest paid
group; in 1946, it was 60.3 percent. In October
1938 earnings in textiles were 64 percent of those
in engineering, and in October 1946, 68.4 percent.
Earnings of workers, classified by age#and sex, in
October 1938 and October 1946, are shown below.6
Changes in the relationship between these rates is
shown by taking the men’s rate in both years as
.
100
October 1938:
9.
Men 21 and over__________.......... 69
Women 18 and over-----------_____ 32
Youths and boys__________ _____ 26
Girls___________________ _ .......... 18
October 1946:
Men 21 and over--------------- _____ 120
Women 18 and over1______ _____ 65
Youths and boys--------------- _____ 46
Girls_____________________ _____ 38
d.
Ratio
0
6
1
6
100
47
38
27
9
3
6
8
100
54
39
32
i Two women working part-time are counted as one working full time.
Little change occurred during the period in the
relative earning power of men and youths under 21,
but the gap between the earnings of adult men and
of women and girls narrowed somewhat. The
large differential is due in part to the fact that
certain occupations are traditionally women’s and
that men’s occupations are frequently closed to
women.
Even in wartime, when women invaded fields
traditionally occupied by men, they were usually
assigned to unskilled or semiskilled jobs; and
skilled work was “ diluted” (i. e., subdivided into
« Source: Ministry of Labor Gazette, November 1940 (p. 280), December
1940 (p. 306), and April 1947 (p. 106). The 1938 figures are derived from
numbers shown on returns; the 1946 figures are weighted by total employ
ment.
5
relatively simple tasks). Numerous collective
agreements made during the war period provided
that women employed on men’s work should
receive the full rate, after a training or probation
ary period, if they could perform the work equally
well without additional supervision or assistance; a
proportion of the full rate was to be paid if super
vision or assistance was required. In the engineer
ing industries the classification of the work was the
subject of many disputes.7
Since 1945 prolonged negotiations by the engin
eering unions for a revision of the wage structure to
equalize the rates of pay for men and women have
been fruitless. The employers refused to abolish
the women’s schedule and offered them a lesser
increase than that agreed to for the men, thus
actually widening the gap. This offer was upheld
in a national arbitration award of June 25, 1946.
Evidence presented to the Royal Commission
on Equal Pay indicated that, on the same types of
semiskilled work in the engineering trades,
women’s piece rates were 54 percent of the men’s
in September 1939 and 68.5 percent in June 1946.
In the clothing industry, time rates for women
were 64 percent of those for men on identical work.
Although since the war women have been leav
ing their jobs and the Government has been im
pelled to launch an urgent recruiting campaign
for women workers, these inequities remain a
deterrent rather than an incentive to women
workers. A majority of the Koyal Commission
on Equal Pay, reporting in October 1946, feared
that application of equal rates of pay for equal
work in industrial employment might retard
national output and limit opportunities for the
employment of women. A dissenting minority
found that “ any difference in efficiency is con
siderably less than the difference in wage rates.”
A unanimous recommendation was made by the
commission for equal pay in the teaching profes
sion and Government service. The Government,
while agreeing in principle, has decided not to act
at the present time, asserting that such action
might raise costs and produce inflationary effects.
A card vote at the Labor Party Conference in
June, overruling the Executive, strongly endorsed
the equal pay principle but did not cause the Gov
ernment to alter its decision.
’ International Labor Organization. The War and Women’s Employ
ment: Part I, United Kingdom, pp. 67-72. Montreal, 1946.
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
6
The differential between time rates for skilled
and unskilled workers has been gradually narrow
ing over a long period of time, as follows:8
Engineering industry:
Fitters and turners—
Laborers__________
Shipbuilding:
Shipwrights________
Laborers__________
Engineering industry:
Fitters and turners—
Laborers__________
Shipbuilding:
Shipwrights________
Laborers__________
T im e rates o f w a ges
19U
38s. lid .
22s. lOd.
58s. Id.
41s. 8d.
me
106s. lid .
89s. 3Hd.
41s.
22s.
55s. 7d.
38s. 5d.
104s.
85s.
4d.
Od.
1927
Od.
Od.
settlement of any labor dispute, referred to it by
the Minister of Labor and National Service,
which could not be disposed of otherwise.11
Part III of the order made it obligatory for em
ployers to observe terms and conditions of em
ployment which were settled by collective bar
gaining or by arbitration awards for their trade
and district.
R a tio s
Wartime Stabilization Policies: At no time during
the war did the British Government promulgate
a hard and fast policy of holding the line on wages.
The National Arbitration Tribunal was permitted
100
100
100
82
69
53
to decide wage disputes on a pragmatic basis,
case by case. No criteria or standards for adjudi
In the building industry, laborers received 75
cation of wage disputes were issued. Furthermore,
percent of the rate for craftsmen before World
the British tribunal did not have jurisdiction over
War II, and 80 percent after, February 1945.
nondispute cases; employers who were willing to
These differentials are enhanced if the skilled
grant increases either unilaterally, or in collective
workers are engaged on piece work; in the engineer
bargaining, did not have to obtain Government
ing trades, the piece rates, by union agreement,
approval.
are supposed to enable workmen of average
Government policy concentrated upon control
ability to earn 27Kpercent above the basic time rate.
ling the prices and rationing the supply of the main
Wage Policies, 1938-47
items in the wage earners7budget, so as to elimi
nate the chief reason for demands to raise wages.
The only wage legislation in effect in Great
The white paper on Price Stabilization and In
Britain prior to World War II consisted of the
dustrial Policy issued July 1941 made it clear that
Truck Acts regulating the place and medium of
the Government’s promise to prevent the cost-ofwage payment, acts providing machinery for fixing
living index from rising more than 30 percent over
minimum wages in agriculture, transport, and in
the level of September 1939 could be kept only if
certain substandard industries, and a House of
wages were also stabilized. Employers and tradeCommons Resolution requiring payment of recog
nized rates of wages by government contractors.9 unions were asked to “bear in mind, particularly
when dealing with general wage applications, that
Except in industries where wages were set by
the policy of price stabilization will be made im
trade boards or similar bodies, wage rates in
possible and increases of wage rates will defeat
general were determined by collective bargaining
their own object, unless such increases are regu
between employers and unions or by joint in
lated in a manner that makes it possible to keep
dustrial councils.10 After the outbreak of war,
prices and inflationary tendencies under control.”
the Government decided to continue to rely
Actually the official cost-of-living index (Sep
upon the peacetime machinery for making such
tember 1939=100) did not rise above 134, reach
wage adjustments as were necessary. This was
ing that figure in July 1945, after which it dropped
modified by the Conditions of Employment and
back to about 132. This result was achieved by
Arbitration Order, adopted July 25, 1940, which
set up a National Arbitration Tribunal for the•* means of strict rationing, distribution controls,
and subsidies for those items which figure largely
• Source: Ministry of Labor Gazette (London). October 1927 (p. 369); and
in the index. In the case of clothing and household
Time Bates of Wages, 1946 (pp. 26, 29). Batios were computed by the
Bureau of Labor Statistics. Engineering rates, 1946, London only.
goods, manufacturers were directed to produce
• The Truck Acts of 1837, 1887, and 1896 prohibited payment in a public
supplies of low-cost, plain utility goods, at the
house and payment in kind; Trade Board Acts of 1909 and 1918, Agricultural
Wages Begulation Act, 1924; Boad Haulage Wages Act, 1938; Fair Wages
expense
of more luxurious items.12
Besolution, 1909. See Ministry of Labor, Industrial Belations Handbook
100
59
100
72
100
84
1944 (London), also Monthly Labor Review, May 1938, or Serial No. B . 760;
Monthly Labor Beview, May 1939, or Serial No. B. 932.
10 See Monthly Labor Beview, June 1947, pp. 1019-1028, reprinted as Serial
No. 1893.
u See Monthly Labor Beview, August 1946, Settlement of Industrial Dis
putes in 7 Foreign Countries (reprinted as Serial No. R. 1848).
ia See U. S. Bureau of Labor Statistics Bulletin No. 851: Wartime Prices,
Price Control and Rationing in Foreign Countries, 1945 (p. 23).
BRITISH WAGE TRENDS AND POLICIES
Policy with regard to criteria for allowing price
increases was elastic also. Price increases based
on higher costs including wages were permitted
from time to time by the ministries or departments
charged with the control of particular commodities
or services. In the case of subsidized commodi
ties, the additional cost was sometimes absorbed
by the Government.
Postwar Wage Policies: The enactment of the
Wages Council Act in March 1945, to replace the
prewar Trade Boards Acts, represented a new
stage in minimum-wage regulation by the State.13
It continued for another 5 years the wartime ob
ligations of employers to observe recognized stand
ards of wages and working conditions. It enlarged
the powers of the old trade boards, permitting
them to provide for paid annual holidays of more
than 1 week and to fix a guaranteed wage (i. e.r
wage to be paid for a certain number of hours re
gardless of whether or not work was provided).
The wartime stabilization policies for both wages
and prices were continued but were subjected to
new pressures created by full employment and
unsatisfied market demands in the postwar period.
Wage increases were asked by unions both in lowpaid and in high-paid industries—the former on
the grounds that improvements were needed for
the purpose of attracting labor, now that wartime
manpower controls were relaxed and workers
could no longer be directed into employment; the
latter, because skilled workers were at a premium.
Demands for shortened workweeks without loss
of pay and for longer paid vacations had the effect
of raising hourly rates, if not weekly rates.
During the latter half of 1945 and during 1946,
wage rates continued to mount, and scheduled
hours of work were reduced. One industry after
another adopted the 43 K- to 45-hour week (in
place of 47 or 48) with the same weekly take-home
pay as for longer hours, either through collective
bargaining or as a result of recommendations
handed down by courts of inquiry appointed by the
Minister of Labor. In August 1945, the Min
istry^ index of weekly wage-rate changes (Sep
tember 1, 1939=100) stood at 151 and a year
later, at 163.5. By February 1947, it had reached
165.5.
Meanwhile, the cost of the subsidies designed
i* See Monthly Labor Review July 1945 pp. 120-123 and Ministry of Labor
Gazette, December 1944 p. 194.
7
to steady the cost-of-living index (of which over
90 percent was spent for food subsidies) be
came increasingly burdensome. In his budget
speech of 1946, the Chancellor of the Exchequer
warned that the policy must soon be reconsidered,
especially if prices of imports continued to mount.
Between April 1946 and April 1947 the index of
prices of all imports, based on 1938 as 100, rose
from 200 to 234 and the index for prices of im
ported food, drink, and tobacco, from 200 to 229.
Food subsidies cost £50,000,000 more than the
estimate for 1946-47, and foreign prices continued
to rise. In the spring of 1947, an advisory com
mittee recommended discontinuance of the old
cost-of-living index, in which food had a weight of
60 percent, and the introduction of an interim
index giving food purchases a weight of 35.
The new index, because of the inclusion of more
items, will be less subject to stabilization through
subsidies and price controls than the old one, and
a modified policy will have to be developed. Mr.
Dalton, Chancellor of the Exchequer, indicated
that the Government would no longer aim at com
plete stability and hoped thereby to save the
taxpayer some money.
After reiterating at intervals since VJ-day its
determination to leave questions of wages and
hours to the long-established and well-tried machin
ery for joint negotiation, the Government early
in 1947 began to evince alarm over the inflationary
trends and to issue warnings concerning the state
of the economy. White papers published in
January and February 1947 M stressed that pri
mary and overriding consideration must be given
to maximizing output and steadying costs, if
Britain was to regain her international solvency.
Both sides of industry were urged to drop restric
tive practices, to introduce incentive pay and to
consult together on methods of improving effi
ciency. “The nation cannot afford shorter hours
of work,” said the Government, “unless these can
be shown to increase output per man-year.” Sir
Stafford Cripps, President of the Board of Trade,
and Herbert Morrison, Lord President of the
Council, in addressing conferences of employers
and trade-unions and the House of Commons,
clarified and emphasized the message of the white
papers. The fuel crisis of the late winter rei* Great Britain: Statement on the Economic Considerations affecting
Relations between Employers and Workers, London, 1947 (Cmd. 7018).
Economic Survey for 1947, London, 1947 (Cmd. 7046). See also Ministry of
Labor Gazette (London), February 1947, pp. 38-40.
8
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
inforced the urgency of these pleas for larger pro
duction at lower cost. From conservative quar
ters demands multiplied for governmental formu
lation of a comprehensive wage policy—meaning
more rigid stabilization, a rationalized wage
structure designed to redistribute labor according
to postwar needs, and greater use of incentives.
The advisability of the 5-day week was seriously
questioned.
A motion to adopt a comprehensive national
policy on wages, hours, and the distribution of
national income, was debated at the May 1947
conference of the Labor Party. At the same time,
a motion to provide special incentives for mining
and other undermanned industries was introduced.
Both propositions were opposed by Mr. Arthur
Deakin, General Secretary of the Transport and
General Workers’ Union, who declared that in no
circumstances would the unions agree to govern
mental responsibility for fixing wages and regula
tion of conditions of employment, or to altering
the method of negotiation within industry. The
question of incentives, wages, and conditions of
employment, he declared, was a question for the
trade-unions and not for the political side of the
movement. Both motions were defeated. A
more general resolution was then accepted urging
the adoption of satisfactory wage standards and
conditions of employment as a means of attracting
labor to the undermanned industries.
In replying to questions raised in a Parliamen
tary debate on productivity, July 3, 1947, the
Minister of Labor thus summarized the Govern
ment’s program: (a) there will be no general regu
lation of wages; (b) productivity can be increased
by asking management to improve working condi
tions and amenities and by promoting joint con
sultations between both sides at the plant level;
(c) payment by results is being encouraged.15
Comprehensive revision of the wage-rate structure
is being considered by employers and unions in
the engineering trades, and has been recommended
by the Court of Inquiry for railroads.
Appendix— Great Britain, as o f February
15, 1948*
1
wage earners’ budgets; while a rise of 73 percent
occurred in wage rates.
Wage Trends
Both weekly and hourly wage rates in Great
Britain continued to rise during the second half of
1947, the weekly wage-rate index ending the year
at 173 (see table 1-A). A new and more compre
hensive wage-rate index based on June 30, 1947, is
now being issued monthly by the Ministry of
Labor. For the last 6 months of 1947, the new and
the old wage-rate indexes follow a very similar
course. The movement of the new wage-rate
index also parallels closely the retail-price index.
As measured by these two indexes, real wages
appear to have undergone no change between June
and December 1947.
Using Professor Allen’s unofficial method of
linking the interim retail-price index to the old
cost-of-living index (see p. 4), it is calculated that
a rise of about 66 percent occurred between 1938
and December 1947 in prices of items entering into
15 Negotiations in the building industry during the month of July 1947
resulted in agreement at the national level to accept partial payment by
results.
1 The appendix tables are numbered to correspond with those in the original
articles that deal with the same or related series of statistics. The letter A has
been attached to the table number in the appendix table in each instance.
T able 1-A.— United Kingdom: Indexes of weekly wage
rates and cost of living, June 1947 to January 19S8 1
Interim retailprice index 2
June 17, 1947=
100
1947: June................
July________
August— .......
September___
October...........
November___
December.......
1948: January_____
100
101
100
101
101
103
104
104
Wage index
(revised)3
June 30, 1947=
100
100
100
101
101
102
103
103
104
Weekly wagerate index
September 1939=
100
166-67
167-68
169
169
170
173
173
1 See table 1, footnote 1, for sources.
2 This index replaced the cost-of-living index of June 1947.
3 A new index released for first time in Ministry of Labor Gazette, February
1948, p. 41.
The latest semiannual figures on earnings
(released in October 1947) apply to April 1947. In
that month, weekly earnings of all workers were
94 percent above prewar, compared with a 90percent increase registered in October 1946. The
gains were fairly evenly distributed among the
industries; however, the paper and printing group
had advanced from eleventh place to eighth. The
differentials by age and sex were very similar to
those existing in October 1946. The differentials
between the earnings of men and women represent
BRITISH WAGE TRENDS AND POLICIES
differences in rates paid for the same work, and
the concentration of women in the lower paying
jobs.2 Hourly earnings increased somewhat more
than weekly earnings during this period because in
many industries hours were reduced without
altering weekly take home pay.
United Kingdom: Average weekly earnings and
average hourly earnings, by industry group, April 19471
T a b l e 3 A .—
Industry group
Transport (except railways).......
Treatment of nonmetal mine
and quarry products................
Building, contracting...................
Metal, engineering, and ship
building....................................
Public-utility services..................
Ironstone, etc., mining and
quarrying...................................
Printing paper, etc.......................
Chemicals, paint, etc...................
Woodworking...............................
Leather, fur, etc...........................
Brick, pottery, glass...................
Miscellaneous manufacturing__
Food, drink, and tobacco............
Textiles.........................................
Clothing........................................
Government industrial estab
lishments...................................
Weekly earn Percent
in
ings, all
crease,
workers
1938-47
8.
116
d.
Hourly earn
ings, all
workers
8.
d.
11
78
117
104
10
0
93
70
2
2
5.3
3.2
116
100
6
5
95
68
2
2
7.2
2.1
110
102
103
102
97
101
102
91
80
71
7
8
0
5
5
11
4
9
10
10
95
78
87
98
108
114
120
95
114
105
2
2
2
2
2
2
2
2
1
1
4.4
4.1
3.2
3.7
1.9
2.6
3.5
0.1
10.0
8.7
2
4.9
111
7
58
2
5.8
Total...................................
103
6
94
2
3.0
Coal miners: 3
In cash....................................
In kind........ ..........................
129
4
140
1 Source: Ministry of Labor Gazette, October 1947.
* Figures relate to April-June 1947. Average weekly earnings in coal
mining are calculated on basis of total number of wage-earners on colliery
books; in other industries, on basis of number actually at work in a given
week. A calculation on revised basis reported in Ministry of Labor Gazette,
October 1947 (p. 325), shows average weekly cash earnings of adult male
workers in coal-mining industry effectively employed in last week April 1947
was 141s. 6d. compared to 123s. 5d. for adult males in all other industries shown
in table 3A.
Wage and Price Policies
Under pressure of a growing unbalance in the
British trade position, the Government and the
trade-union leaders discussed wage and price
policies during the autumn months. Late in
December, the Trades Union Congress issued an
interim report reiterating its wartime stand against
specific limits or restrictions on wage increases,
and its opposition to an over-all wage stabilization
authority. The report emphasized the need for
continued control of prices and cost-of-living sub
sidies and appealed to unions and individual
workers to increase production in every possible
way.
2 In April 1947 the weekly earnings by age and sex were as follows:
8.
d.
Men, 21 and over................................
5
Women, 18 and over...........................
4
Youths and boys................................. ...................
4
47
Girls....................................................
2
ratio
100
54.6
38.3
32.5
9
Early in February the Government reformulated
its wage and price policies, followed shortly by an
economic statement concerning the dire necessities
of the situation. The Government still disclaimed
any intention of direct interference with income
levels, except by taxation. However, the Prime
Minister laid down, more exactly than in any
previous statement, considerations which should
guide the processes of wage negotiation and arbi
tration. He promised that the Government would
also abide by them in any negotiations to which it
was a party. He warned that the terms of collec
tive agreements must be observed (as a maximum)
by both public and private employers. He flatly
declared there was no justification at the present
time for any rise in incomes from profits or rent,
and only in exceptional cases for wage increases.
Every wage claim henceforth must be considered
on its national merits, and not on the basis of main
taining former relationships between occupations
and industries.
No claim for increased wages could be considered
justified unless it was shown to be necessary in
order to attract labor to an understaffed industry;
or in order to raise the levels of personal incomes
which had become inadequate because of a marked
rise in living costs. Any general increase in money
incomes, unless accompanied by a substantial in
crease in production, would have an inflationary
effect and would thereby imperil economic stabil
ity and controls.
Whatever had been the past practice, he de
clared there could be no presumption that the costs
resulting from any increases not justified by these
principles would be taken into account in setting
controlled prices.
The TUC general council voted to accept this
statement on condition (1) that the Government
pursue a vigorous policy designed not merely to
stabilize but to reduce prices and profits and (2)
that certain interpretations were recognized. It
was stated by the TUC that the justification for
claims for wage increases should be admitted
where those claims are based upon increased out
put; or where the incomes of workers were below
a reasonable standard of subsistence. Further
more, the need for safeguarding those wage dif
ferentials which are an essential element in the
wage structure of important industries must be
recognized, if these are required to sustain stand
ards of craftsmanship, training, and experience.
10
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
On the basis of a proposed freeze of prices at
current levels, unions were asked by the Govern
ment to postpone wage demands then pending.
The Board of Trade proceeded to draft new price
controls, imposing definite ceilings instead of the
wartime cost-plus system, for less essential con
sumer goods not hitherto strictly controlled. Sir
Stafford Cripps also asked the Federation of
British Industries to submit a plan for reducing
prices and profits.
Wage Trends, 1938-47
France: Wage Trends
and Wage Policies,
1938-47
H elen I. Cowan 1
T he level and stbuctube of wages in postwar
France differ in certain notable respects from those
of the prewar period. Hourly money wage rates
at the beginning of 1947 were approximately 4 to
5 times, and total earnings, including family allow
ances, about 5 to 8 times the 1938 levels; but,
owing to depreciation in the purchasing power of
the French franc, real wages were below prewar
levels. Differentials between the wages of skilled
and unskilled, men and women workers, highpaid and low-paid occupations, and between Paris
and the Provinces have altered materially, de
pending upon the wage legislation adopted from
time to time. On the whole, in each of these
cases, differentials have narrowed since 1938.
In this article, the 1947 wage structure is com
pared to that of 1938, and its development is
traced during the period 1938 to 1947.2
» Of the Bureau's Foreign Labor Conditions Staff.
♦ * Based mainly on information from the Bulletin de la Statistique G6n6rale
de la France, and Etudes et Conjoncture, Union Frangaise (Ministry of
National Economy, Paris), 1942, 1945, 1946, and 1947; the Revue Fran$aise
du Travail (Ministry of Labor and Social Security, Paris), 1946 and 1947;
the Journal Offlciel de la Rgpublique Fran$aise (Paris), 1939,1945,1946, and
1947; Le regime des salaires ouvriers en France, in Droit Social (Librairie
Sociale et Economique, Paris), December 1945; current periodicals; and two
official French wage seiies. The older of these series (published in the Bull*
etin de la Statistique G&ngrale de la France) is prepared from questionnaires
answered by the industrial courts (Conseils de Prud’hommes) or the mayors
of the capital cities of the Departments (Provinces) and by certain employers'
associations in Paris. This series provides wage data for some 40 male occu
pations and 7 women's occupations in industry in the Provinces and for a
narrower coverage in Paris. For these occupations, the selection of which
has not changed greatly since 1925, it offers material for comparing present
with prewar trends. The newer series (published by the Revue Frangaise
du Travail since May 1946) is prepared from the results of some 50,000 ques
tionnaires which are sent quarterly to industrial, commercial, and other
establishments subject to official labor inspection. Branches surveyed in
this series are shown in table 2. Since July 1946, the inquiries have been
785083—48----- 3
Money Wages: According to the French Ministry
of National Economy, the average hourly wage
rates of male workers in Paris industry rose from
10.67 francs3 in October 1938 to 47.46 francs in
October 1946, an increase of 345 percent. The
corresponding figures for workers in the Provinces
are 6.20 and 37.19 francs, an increase of 499 per
cent. On the basis of a different series (issued by
the Ministry of Labor and Social Security) it is
estimated that between October 1946 and January
1947, hourly wage rates increased by approxi
mately 3 to 4 percent. Table 1 shows the in
creases for different groups of workers from 1938
to 1947, and table 2 presents January 1947
hourly wage rates in France, by industry, class
of worker, and sex.
The available statistics indicate that average
hourly rates in January 1947 were approximately
4 to 5 times higher than in 1938.4 Total earnings,
however, were augmented by piece rates, bonuses,
overtime pay, and other additions, some of which
are difficult to measure. Statistics show that
earnings for piece work rose faster than for time
work in 1946, but data for a definite comparison
of 1946 piece rates with those of 1938 are lacking.
In October 1946 piece workers' earnings exceeded
the legal maximum by 10.8 percent (for maximum
wage, see p. 18). Earnings of workers with
families were supplemented to an even greater
extent by large postwar increases in family allow
ances.
Family allowances, which were greatly increased
in scope and coverage during and after World
War II, have become an essential part of the
French wage system. Family allowances provide
stipulated percentages of the basic monthly wage,
which vary according to the number of children,
broadened to include a limited number of establishments employing fewer
than 10. About 70 percent of the questionnaires are usually returned, giving
a sample of some 2,000,000 out of a working population of about 11,000,000
(not including agriculture, mines and quarries, personal, domestic, and
public service).
* Average exchange rate of the French franc, 1938=2.88 cents (United States
currency), 1939=2.51 cents, 1940=2.08 cents, 1945=1.97 cents. On December
26,1945, the official rate of exchange was established at 119 francs to theUnited
States dollar, giving an average franc rate of 0.84 cents.
However, great caution should be used in comparing French wage data in
this article with United States wages. Comparisons of wages between
countries are difficult to interpret because of the fact that foreign exchange
rates do not truly reflect international differences in living costs and because
of the lack of information on relative productivity by industry in different
countries. Wherever productivity studies have been made, the differences
favor the United States.
* For French wages in the prewar period, see Monthly Labor Review,
September 1938 (p. 624) and October 1944 (p. 705).
11
12
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
T able
1.— Wage rates for male workers and indexes of wage rates and prices in France, 1938-47
Indexes (October 1938=100) of *—
Average wage rates (in francs)
Hourl y rates
ininc lustry
Period
Paris
Provinces
1038: Year
1938:
1939:
1940:
1941:
1942:
1943:
October
October r , __r ___ ___
October
October______________
October.. ____ ___
October________
Hourly wages in industry
Daily rates in—
Agricul
ture 1
Coal
mines *
Skilled males
Paris
Provinces
Unskilled males
Paris
Provinces
Paris
Provinces
156
132
155
185
241
• 111
• 143
*170
*206
*257
318
285
274
291
297
•290
*316
391
505
393
325
460
403
•374
*515
401
528
624
762
645
491
858
724
•587
*971
554
624
705
789
884
856
837
*980
100
102
105
117
135
148
100
103
100
117
118
138
100
103
104
122
139
152
15.82
• 151.76
156
205
165
239
143
217
34.78
27.46
304.31
277
304
327
404
1946: Year
April_____ _
October. _
36.24
47.46
28.54
37.19
476.00
321
431
1947: January
__ _ r
April7...............................
49.13
38.17
495.10
463
22.68
1945: Year
April
October
72.00
1 Including payment in kind.
* Including family allowances.
* September.
* Including family allowances and overtime.
* November.
* May.
129.30
Provinces
Paris
100
100
105
103
113
115
124
1944: Year
April____
O cto b er______
Retail prices
(34 articles)
100
57.97
60.60
60.61
80.09
87.10
90.40
6.20
6.30
6.34
7.17
8.22
9.11
100
100
168
256
280
264
286
315
393
418
556
303
401
568
437
7 Data for April 1947 added after publication in Monthly Labor Review.
• Feb uary.
Source: Bulletin de la Statistique G6n6rale de la France (Ministry of
National Economy, Paris), 1946 and 1947; Etudes et Conjoncture, Union
Francaise (Ministry of National Economy, Paris), December 1946-January
1947, and October 1947.
OCT
1943
Average monthly
earnings of male
laborers (family
of 2 children)
26.95
10.67
10.90
10.90
12.11
12.27
12.73
UNITEO STATES DEPARTMENT OP LABOR
BUREAU OF LABOR S TA TISTIC S
Index (1938=100)
OCT
1944
OCT
1945
AM J J A S ON D J
1346 '47
13
WAGES IN FRANCE
HOURLY WAGE RATES DRAW TO G E TH E R -------. . . for men and women workers
. . . for Paris and provinces
UNITED STATES DEPARTMENT OF LABOR
BUREAU OF LABOR STATISTICS
T able 2.—Average hourly wage rates in France, January 1, 1947, by industry, sex, and class of worker, and wage-rate indexes
Average hourly wage rates1 (in francs)
Industry
Unskilled laborers
Male
Female
Heavy laborers
Male
Female
Specialized
workers
Male
Female
Skilled workers
Index of average
hourly wage rates
(January 1, 1946
-100)
Male
Jan. 1,
1947
Female
Oct. 1,
1946
All industries................................................................
34.1
31.2
37.5
33.8
42.3
38.0
49.4
44.8
143
138
Food..................................................... ........................
Chemical........................................................................
Rubber...........................................................................
Paper, cardboard..........................................................
Books, printing.............................................................
Textiles.................................................. ............ ........
Clothing........................................................................
Leather and hides........................................... ............
Wood..............................................................................
Metallurgy....................................................................
Metal work...................................................................
Fine metals, precious stones......... .............................
Stoneentting . ...
Construction, earthwork.............................................
Bricks, pottery, etc.......................................................
Transportation (except National Railway System)..
Commerce............. ......................................................
32.5
32.3
33.5
34.7
39.6
33.9
34.7
31.9
33.9
32.1
33.9
33.9
36.7
34.1
32.3
35.9
34.1
30.2
30.5
30.3
30.9
32.9
31.8
31.2
30.8
31.2
30.3
32.0
32.3
34.9
35.3
35.3
37.3
43.8
37.5
38.4
36.2
38.7
38.5
37.6
37.4
40.4
38.1
36.1
39.5
37.3
32.8
32.8
34.1
32.8
36.3
34.5
34.3
33.6
34.8
37.6
34.7
35.1
39.5
38.4
39.0
42.7
52.1
43.4
44.4
42.2
44.2
42.0
42.0
47.6
46.0
42.8
40.4
42.6
40.7
36.1
35.1
36.1
37.5
43.2
38.0
38.9
34.4
39.1
39.9
37.7
44.6
44.8
42.7
46.1
49.7
60.7
49.1
50.8
50.6
51.9
50.2
50.5
59.3
51.3
48.0
* 48.4
47.7
46.1
40.2
39.1
40.4
45.6
49.0
42.8
45.4
47.8
47.4
42.6
44.7
53.8
143
140
143
141
149
151
148
141
140
141
142
143
140
136
141
141
141
141
138
137
136
142
140
144
139
138
134
136
146
142
135
137
139
137
28.1
30.3
29.9
31.9
1In highest wage zone; in other zones the legal minima are 5,10, 15, 20,
and 25 percent lower.
32.9
33.5
32.0
33.1
38.5
36.8
36.1
37.0
43.2
44.0
40.8
41.7
Source: Revue Frangaise du Travail (Ministry of Labor and Social
Security, Paris), January and April, 1947.
14
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
the region of France, and the number of wage
earners in the family. Table 3 shows allowances
for Paris for August 1939 to December 1941 and
for the Seine Department, which includes Paris,
from 1944 to 1947. The figures are based on the
assumption that the wage earner's wife is not
employed, and that the wage earner consequently
receives the additional benefit known as the
“ salaire unique" (for those who are sole bread
winners of families).
T able 3.—Family allowances in the Seine Departments
1989-47 1
Allowance (in francs) for father
o f-
Period
August 1939-December 1941.........
January 1944-August 1944............
September 1944-July 31,1946.......
August 1945-June 1946..................
July 1946-December 1946..............
Alter January 1,1947.....................
Basie
monthly
wage (in 1 child
francs) * under 5
years of
age
2.250
2.250
4,500
5.650
5.650
2 chil
dren
150
300
450
787.50
675 1,248.75
900 1,665
1.130 3.390
1.130 3.390
4 chil
dren
900
2,025
3,037.50
4,320
7,345
7,910
1 The family allowance law of Aug. 22,1946 fixed the average monthly wage
upon which family allowances are calculated at 225 times the minimum hourly
wage of an unskilled worker in the metal industry in the Department of the
Seine. Allowances in other Departments are subject to the graduated reduc
tions customary in the wage zones. (See Journal officiel de la RSpublique
Francaise, Aug. 23,1946.)
* Source: Bulletin de la Statistique G6n6rale de la France, April 1942 and
April 1947.
The increase in earnings caused by the longer
hours worked since liberation cannot be measured
exactly. Average weekly hours rose from 39.9
in December 1944 to 43.8 in October 1946. On
October 1, 1946, about 40 percent of the workers
(reported in the quarterly survey of the Ministry
of Labor and Social Security) averaged 40 hours
weekly, 29 percent 40 to 48 hours, and 29 percent
48 hours or more. Under terms of a law of Febru
ary 25,1946, a minimum rate of time and a quarter
was authorized for the first 8 hours of overtime
above 40, and time and a half thereafter, with a limit
of 20 hours overtime per week. According to
an official French estimate of early 1947, the wage
increase resulting from the overtime law might
reach 24 percent in the building trades and
average 18 percent for the manufacturing indus
tries.
As a result of the increase in average hourly
wage rates, in family allowances, and in over
time, the monthly earnings in January 1947 of a
Paris worker with 2 children were more than 6
times the October 1938 level; those of a Provincial
worker with 2 children, about 8 times.
Real Wages: The increase in money wage rates
between 1938 and 1947 was more than offset by
price increases and real income declined accord
ingly (see table 1). The retail price index for
Paris stood at 856 in January 1947 and that for
the Provinces at 971 in November 1946 (1938=
100). Both of these indexes, which are based on
prices of 34 articles, including 29 foods, understate
the actual increase in the prices paid by wage
earners because they do not include above-ceiling
prices prevailing in black markets. On the other
hand, wage earners sometimes received wages in
excess of the legal rates. Even so, the actual
reduction in real income is probably understated
by a comparison of the increase in wage statistics
with the rise in the price indexes.
The available data indicate that a four- or five
fold increase in wage rates and a six- to eight-fold
increase in total earnings between October 1938
and January 1947 must be compared with an
eight- to nine-fold, or greater, increase in retail
prices. The reduction in real income was the
inevitable outcome of the low, though rising,
rate of production of the French economy in the
postwar period. The index of industrial produc
tion (1938=100) averaged less than 60 in the last
5 months of 1945 and 81 in 1946; it stood at 89
in January 1947.
Wage Structure: The most significant changes in
the French wage structure, between 1938 and 1947,
resulted from the wartime tendency toward the
leveling of wages for men and women workers and
for wage earners of different categories and places.
Even though the postwar period brought some
reversals in this trend, especially following the
reestablishment of the occupational categories in
1945 (seep. 17), the effects of the trend are easily
seen when the wage structure of 1947 is compared
with that of 1938.
A marked change is the reduction in the spread
between average hourly rates of men and women
workers, as illustrated below.
Average hourly rates (tn
francs) in cities other
than Paris
October
October
19S8
1946
Males in 10 occupations___________ 6. 19
Females in 7 occupations__________ 3. 42
37. 14
31. 74
In October 1938, hourly wage rates in the 10
predominantly male occupations were nearly twice
those of females in the 7 predominantly female
WAGES IN FRANCE
occupations; 8 years later they were only 17
percent higher. However, the actual spread be
tween male and female hourly rates was much less,
both in 1938 and in 1946, for men and women
working in the same industry.
In July 1946, a decree undertook to abolish the
differential between men’s and women’s rates and
require equal pay for equal work. In the prewar
period the differential had been about 20 percent
and intermediate legislation had fixed it at 10
percent. Quarterly returns from employers indi
cate that between July and October 1946 the differ
ential diminished but did not disappear. The
general average for women’s rates was 11 percent
lower than for men’s in October, compared to 14
percent in July. In October the rates for highly
skilled women workers in the fourth wage zone
ranged from 4 percent below men’s rates in the
clothing industry to 21 percent below in book and
job printing; for ordinary women laborers the
range was from 5 percent below in metallurgy to
12 percent below in the book and printing indus
try. Women’s wages in October 1946 approxi
mated the legal minimum-wage rates.
Differentials between workers of varying degrees
of skill were somewhat smaller, on the whole, in
late 1946 and early 1947 than at the end of 1938.
In table 4 the list of 10 highest paid occupations
generally represents more highly skilled workers,
while the 10 lowest paid represent semiskilled and
include unskilled laborers. Average hourly earn
ings for all 41 occupations rose to 6 times the
October 1938 level by October 1946. The average
increase in the 10 highest paid occupations was
only 5.7 times compared with an increase of 6.3
times for the 10 lowest paid occupations.
Miners’ wages were an exception to the leveling
tendency in the skilled occupations; by October
1946, miners’ hourly rates were 8.2 times the
October 1938 level. Figures for the metal indus
tries of the Paris region, including both piece and
time workers, show that recently the highly
skilled workers fared better than semiskilled and
unskilled groups. A third exception to the tend
ency toward narrowing differentials was the ordi
nary laborers’ group; table 4 indicates that most
other occupations enjoyed higher rates of wage
increases than did laborers.
Another change in the wage structure is the
reduction in the spread between wage rates in
Paris and the Provinces. Before the war, hourly
15
T able 4.—Average hourly wage rates (in francs 2) for males
in French cities, other than Paris, in October of 1988
and 1946 1
Occupation
41 occupations
_ _
October
1946
6.20
37.19
6.0
5.54
5.48
5.45
5.56
5.13
5.31
5.90
5.67
5.72
4.92
33.67
35.76
36.17
35.28
33.01
33.68
36.66
34.78
36.00
27.16
6.1
6.5
6.6
6.3
6.4
6.3
6.2
6.1
6.3
5.5
5.47
34.22
6.3
6.87
6.84
6.90
6.59
6.88
6.92
6.56
6.56
6.72
7.78
40.69
40.20
38.41
37.47
37.94
38.20
38.99
39.58
39.45
42.79
5.9
5.9
5.6
5.7
5.5
5.5
5.9
6.0
6.0
5.5
6.86
39.38
5.7
- .
10 lowest-paid occupations:2
Brewers......................................................
Saddlers, hamessmakers__ _ __ _
Shoemakers _ _
_ . _T_
Dvers, cleaners
_ _
__
Weavers __
...
_T
Rnpemakers .
Coopers......................................................
Navvies fterrassiers)
____
Brickmakars- ___
......... _ ..
Laborers _ ___
_
... _
Unweighted average ,
Highest-paid occupations:4
Printers, compositors _
. . _
Bookbinders__ __
_
.
Coppersmiths.
Blacksmiths.. _
. . . . . . . __
. _
...
F itters__ _
Metal turners. _ ...
_
__
Electrical fitters.
...
. . . ......
_ _
Watchmakers .
_ __ _
Stonecutters. .. . _ _ _ _ . ....
Ornamental carvers
__
Unweighted average
Ratio:
October
1946 to
October
1938
October
1938
__ _
1Hourly wages, which do not include family allowances, are from Bulletin
de la Statistique G6n6rale, April 1947.
2 Average exchange rates for franc were 2.67 cents in October 1938 and
0.84 cent in October 1946.
a Lowest paid in October 1938.
4 Highest paid in October 1938.
rates in Paris, which were the highest in France,
were at least 50 percent above those of the lowest
wage area. In the latter part of 1946, the difference
was only 25 percent (for postwar wage zones, see
p. 17). Table 5 presents wage rates in Paris and
T able 5.—Average hourly wage rates (in francs l) in Paris
and in other French cities, October 1988 and 19461
October 1938
Occupation
Paris
and its
envi
rons
October 1946
Cities Ratio: Paris
Paris and its
other
than to other envi
rons
Paris cities
Cities Ratio:
other
Paris
than toother
Paris cities
Average, 17 occupations.
10.67
6.53
1.63
47.46
38.73
1.22
Printers, compositors.—
Bookbinders...................
Tailors.............................
Carpenters......................
Joiners.............................
Plumbers........................
Blacksmiths...................
Locksmiths.....................
Metal turners____ ____
Electrical fitters.............
Stonecutters...................
Masons...........................
Navvies..........................
Roofers............................
House painters...............
Ornamental carvers___
Glaziers...........................
1J.90
11.90
8.49
9.85
9.85
10.45
11.70
9.85
11.90
9.91
12.85
10.15
9.55
10.45
9.85
11.35
11.45
6.87
6.84
5.87
6.44
6.35
6.47
6.59
6.35
6.92
6.56
6.72
6.43
5.67
6.50
6.33
7.78
6.34
1.73
1.74
1.45
1.53
1.55
1.62
1.78
1.55
1.72
1.51
1.91
1.58
1.68
1.61
1.56
1.46
1.81
50.98
55.00
57.50
45.50
43.60
47.30
49.75
43.60
48.25
45.05
48.05
46.50
39.35
47.30
43.60
51.05
44.45
40.69
40.20
38.45
38.49
37.88
38.36
37.47
37.76
38.20
38.99
39.45
39.26
34.78
38.89
38.92
42.79
37.91
1.25
1.37
1.50
1.18
1.15
1.23
1.33
1.15
1.26
1.16
1.22
1.18
1.13
1.22
1.12
1.19
1.17
*Average exchange rates for franc were 2.67 cents in October 1938 and 0.84
cent in October 1946.
2 Hourly wage rates, which do not indude family allowances, are from
Bulletin de la Statistique G6n$rale.
16
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
in other cities for 17 occupations in October of
1938 and 1946. In 1938 Paris wages for males
were 1% times those of other cities (using an
unweighted average of the 17 occupations); in
1946 the ratio was about 1%. However, the
spread in real wages had not been reduced nearly
as much because retail prices rose more sharply
in the Provinces than in Paris.
Wage-Price Policies, 1939-47
Wartime Controls, 1989-44: When World War
II began, wages in France were being fixed by
collective agreement under terms of the legisla
tion of March 25, 1919, and June 24, 1936. The
legislation of 1936 made compulsory the inclusion
in collective agreements of minimum rates by
category and area.
The outbreak of war put an immediate end to
free collective bargaining and an almost immediate
end to the free play of prices in the economy.
The first step toward freezing prices of goods and
services at their prewar levels was taken in a
decree of September 9,1939. Wages were blocked
at levels prevailing September 1, 1939, by a decree
of November 10, 1939, and another of June 1,
1940. This wage legislation provided that rates
could be changed only by the Minister of Labor on
advice of a technical commission consisting of
Government officers and two representatives of
employers and labor. The Vichy Government
continued the power of the Minister by law of
July 12, 1940, but eliminated the technical com
mission. The Minister's wage-fixing power was
also extended beyond rates in commerce and
industry to include the liberal professions, Govern
ment offices, etc., and other occupations, except
agriculture.
The obvious purpose of the occupying authori
ties was to keep wage rates low in order to force
French workers into war production industries in
France or Germany. The wage freeze was more
effective than the price freeze and real wages fell
during this period, although the Government
authorized three main wage revisions which in
volved increases. In the third of these, in June
1943, the Government ordered a general readjust
ment of wages and undertook to fix wage rates by
decree for the different classes of skill in each
industry. Many employers exceeded the fixed
legal rates by paying bonuses and furnishing
meals and other services. By April 1944, wage
rates as indicated by the indexes (1938=100) for
unskilled laborers in Paris and the Provinces,
respectively, were 143 and 168 (see table 1).
Meanwhile, German purchases and requisitions,
an enormous increase in currency (resulting mainly
from the daily indemnity which the French were
required to pay the Germans), and growing
scarcities of goods had driven official retail prices
upward, so that in the spring of 1944 the indexes
in both Paris and the Provinces were nearly 200
percent above the 1938 levels. I t should be
stressed again that retail-price index numbers are
based on official prices, that black-market prices
were much higher, and that the supply of goods
at official prices was far from meeting minimum
demands. At liberation, the returning French
Government found money wage rates for various
occupations and regions in extreme disorder and
real wages at least 50 percent below their 1938-39
level.
Wage Policy of Provisional Government: In accord
with the demands of the French National Coun
cil of Resistance and the underground trade-union
movement for adequate wages and living stand
ards, the French Provisional Government in
Algiers adopted in March 1944 a resolution re
quiring the immediate raising of wages and their
subsequent adjustment to the rise in prices and
the volume of goods available. General princi
ples for the policy were outlined by an order in
Algiers on August 24 and another in Paris on
September 14, 1944. The validity of the acts of
the Vichy Government was recognized, for the
increases were to be based upon the rates already
in force. Officially these first increases granted
were to range from 50 percent for laborers to 30
percent for more skilled workers. Rates for
miners and civil servants were also raised. Pen
sions and old-age allowances were increased, and
the maximum wage for eligibility for socialinsurance coverage was moved up from 48,000 to
60,000 francs.
The increases in wage rates were supplemented
by increases in family allowances. These allow
ances are intended to adjust the worker's wage to
his family position and social obligations. They
were initiated by employers as early as World War
I, were made obligatory in 1932, and were broad
WAGES IN FRANCE
ened and advocated for encouraging family growth
after World War II.5
Unfortunately—perhaps inevitably—in the con
fusion of establishing the Provisional Govern
ment’s control, the wage increases were not uni
form in regions or industries and frequently they
exceeded the plan. Moreover, the financial and
economic controls originally designed to accom
pany the wage increases did not materialize. At
the moment of greatest difficulty in the industrial
revival, wage demands had to be met. With con
tinuing scarcities and a thriving black market, the
rise in nominal wages brought little or no increase
in real wages. In addition, the wage increases
tended to reduce differentials and caused discon
tent among the higher paid workers.
The Government consequently acceded to the
requests for a complete overhauling of the wage
system, and in November 1944 called for detailed
data on minimum wages of all classes of workers in
effect September 1939 and 1944. The French did
not, at this time, return to the prewar system of
fixing wages by collective bargaining, but rather
made use of the system instituted by law of Novem
ber 10, 1939 (see p. 16). In January 1945, the
Government appointed a committee of repre
sentatives of employers and labor organizations
and of technicians from the interested Ministries to
recommend necessary wage reforms.
Theoretically, under the new system, the Min
ister acted (for example, in appointing a subcom
mittee to work out wage systems for specific indus
tries) on the recommendations of representatives
of management and labor in the central committee.
Actually, in view of the disorganization of em
ployers’ associations, the most powerful labor
organizations presented their demands to the
Minister, and on these demands the Minister took
action, announcing the resultant decision by
decree. During this period, the head of the Gov
ernment maintained contact with employers
through an unofficial council.
Reform of Wage Structure, 1945: 8 The wage struc
ture established by the central committee and its
industry subcommittees in 1945 has four distinc-*•
• For detail, see Revue Francaise du Travail (Ministry of Labor and Social
Security, Paris), October 1946, pp. 533-39, May 1947, pp. 482-91; Population
(National Institute of Demographic Studies, Paris), January-March 1946,
pp. 155-58, October-December 1946, pp. 681-98; International Labor Review,
December 1945, p. 708; and Family Allowances in Various Countries, Bul
letin No. 853, Bureau of Labor Statistics, U. S. Department of Labor.
• Summarized from Droit Social (Librairie Sociale et Economique, Paris)
December 1945, pp. 391-400.
17
tive characteristics: A minimum base wage rate;
the adjustment of minimum base rates to geo
graphic and cost-of-living zones throughout France;
a graded job classification scale on general and
on industry bases; and an average maximum wage.
The minimum base wage as applied in the legis
lation of 1945 is the minimum hourly, weekly, or
monthly wage rate fixed for the lowest category of
laborers in the industry or profession. Because
of the scarcity of consumer goods, the black
market, and the fact that the retail price index
measured only official prices, the minimum base
rates could not be scientifically fixed in 1945. An
attempt was made, nevertheless, to set rates
which would provide the purchasing power of
1939.
The wage zones defined by the committees and
subsequent legislation in 1945 represent an effort
to adjust wage rates to regional variations in the
cost of living and, to a less degree, to geographic
locations of the various industries. Regional wage
zones have long been a feature of the French wage
structure; they were established temporarily by
the Minister of Armaments during World War I
and were incorporated in collective agreements in
the 1930's; after World War II, 14 wage zones
were defined. Within these zones, minimum
wages were fixed at rates 5, 10, 15, 20, and 25
percent lower than rates in the first (Paris) zone.
The graded job classification scales which the
Minister of Labor instructed the committees to
establish, were to contain, whenever possible, the
following five job classifications: unskilled laborers
(manoeuvres ordinaires); heavy laborers, and spe
cialized laborers (manoeuvres de force et speciali
ses); semiskilled operatives (ouvriers specialises);
skilled workers (ouvriers qualifies); and highly
skilled workers. Starting at 100 for the ordinary
laborer’s wage, each job was assigned a coefficient
above 100, indicating the wage differential based
upon degree of skill, length of training, complexity
of tasks, and other factors connected with the
particular job. Jobs in the specialized laborers’
category generally received coefficients ranging
from 108 to 118; semiskilled operatives’ jobs re
ceived coefficients from 120 to 138; coefficients of
140-180 and sometimes 200 were set for the skilled
and highly skilled workers. When these detailed
scales had been agreed upon by the appropriate
committee, for each industry, the Minister put
them into effect by decree.
18
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
One of the devices adopted in France during
World War II to help stabilize wages, costs, and
prices was to limit the total wage bill and the
average wage paid workers of the same category
in any enterprise. The decree of November 10,
1939 (as amended by decree of June 1, 1940), for
example, required that the average amount of the
wages paid in each enterprise to workers of the
same category could not exceed the average paid
the same group on September 1, 1939. Later leg
islation provided that the total of hourly wage
payments divided by the number of workers
could not exceed an average minimum fixed by
decree. The legislation of 1945 varied these
principles slightly and required that the difference
between the minimum hourly wage rate and the
average maximum wage could not be more than
a fixed percentage. This was first set at 7.5 per
cent, and after June 1, 1945, at 15 percent, except
for laborers in metallurgy and metal fabrication
where the differential was 20 percent. For piece
workers, the differential was also 20 percent.
These differentials were not changed by the gen
eral wage-increase law of July 29, 1946, men
tioned below.
Stabilization Program, 1946-47: The enlarged
money wage income and the high rate of Govern
ment expenditure necessary for postwar recon
struction put an amount of money into circula
tion far exceeding the existing capacity of the
French economy to turn out consumer goods,
handicapped as it was by property destruction,
old equipment, and coal and power shortages.
To counteract the resultant upward pressure on
prices, the French developed an extensive, and
eventually very complicated, system of price
control.
Enforcement has been singularly difficult in
France, not only because of the wartime habit of
evading economic regulations imposed by the oc
cupation authorities, but also because the urban
scarcity areas have close family ties with rural
producing areas. Unsatisfactory enforcement en
couraged the growth of the black market in late
1945 and in 1946, at the same time that the im
possibility of investigating thoroughly the thou
sands of requests for price increases led to the
legalization of higher and higher prices.
Stabilization was the professed Government
wage policy throughout 1946. Wage incentives,
however, were permitted, in order to stimulate
production and raise earnings. The Government
was depending upon increased production and
subsequent cost reductions reflected in lower prices
to raise the level of real wages.
Organized labor supported this stabilization
policy, during 1946, urging greater production,
longer hours, and more effective price control.
Legislation standardizing pay for work beyond
the legal 40-hour base week was passed in early
1946. Although the majority of labor disputes
were caused by wage demands, strikes were few
and brief. However, as price control was in
effective and prices continued to rise, rank and
file discontent forced labor-union congresses to
demand wage increases. In June 1946, the Gen
eral Confederation of Labor advocated a general
increase of 25 percent, and the Catholic Confed
eration of Christian Workers an even greater in
crease, including family allowances. A special
tripartite National Economic Commission in July
concluded that a 25-percent increase possibly
could be absorbed, if inefficient control of prices
and’ distribution were reformed, and production
programs would stress utility goods so as to force
down prices of consumer goods.
Although the Government did not accept the
Commission's conclusions, wage increases aver
aging about 18 percent were authorized on July
29, 1946. Other increases in earnings were pro
vided for by the clauses of the legislation which
raised family allowances about 25 percent. (On
August 22, a new Family Allowance Law raised
the rate again and so widened the coverage as to
result in an over-all increase in family allowances
of approximately 90 percent.)
Price rises were authorized even before the pricefreeze date agreed upon (September 20,1946), and
when the wage increases went into effect further
price rises occurred. Although worker discontent
was growing, the General Confederation of Labor
ostensibly supported the Government stabiliza
tion program,7 and trade-unionists organized local
price-control committees. On December 30,1946,
the General Confederation adopted a new plan
tWhen collective bargaining was restored by law in December 1946, the
Government retained control over wage fixing (for detail see, Monthly Labor
Review, June 1947, p. 1024). However, the advisability of continuing Gov
ernment control over wages was under discussion in the Cabinet in the early
summer of 1947. In July 1947, the labor unions and the employers' associa
tion were reported to be negotiating directly on wage and other issues, sub
ject to Government approval
WAGES IN FRANCE
to meet local wage demands: a “minimum living”
wage, which would be adjusted currently to cur
rent prices paid by workers for food, clothing,
lodging, service, etc. The minimum demanded,
effective January 1, 1947, was to be not less than
7,000 francs monthly for a 48-hour week.
During 1947, the Blum and later the Ramadier
Governments attempted to hold wages steady and
cut prices. The “shock” of the 5-percent price
reduction announced by Leon Blum, January 1,
won support for the Government program,
although prices did not drop appreciably. But
the second 5-percent price cut (in March) failed
to achieve the salutary psychological effect of the
first. Food supplies for the larger towns did not
show the expected increase in the spring and,
although production indexes had risen during
the year, the rise was not enough to overcome the
extreme shortages. The position of the wage
earner steadily deteriorated.
Wage Increases: Within a month after the second
price reduction, the Government had to meet
half way labor’s demand for a minimum living
wage. Legislation of March 31, 1947, advanced
“abnormally low” wage rates to 7,000 francs
monthly on the basis of a 48-hour week in the
first (Paris) wage zone, with corresponding in
creases in other zones, and granted an increase
in family allowances.
In spite of these concessions, strikes multiplied
in number during May and June 1947, culminat
ing in a nation-wide railway strike. Thus, a 2Kyear period of comparative industrial calm was
finally broken. The strikes could be settled only
by granting considerable (though disguised) wage
increases. At first the Government agreed to
production bonuses (which were to be fixed by
agreement between labor and management), a
slightly more generous minimum living wage, and
Appendix.—France, as o f February 15,19481
Prices and wages continued to rise in France
through 1947 and the first 2 months of 1948. Be
1 The appendix tables are numbered to correspond with those in the original
articles that deal with the same or related series of statistics. The letter A
has been attached to the table number in the appendix table in each in
stance. Appendix tables are not presented in the same sequence as in the
original article, owing to necessary changes in emphasis in discussing the
material.
785088—48------- 4
19
tax exemptions for incomes under 84,000 francs.
But in the railway settlement definite wage and
family-allowance increases were granted. By (1)
affording a basis for a new rise in prices and (2)
creating additional deficits in State-owned enter
prises, such as the railways, these strikes, and the
resulting wage increases, marked a serious set-back
in the effort to control inflation.
In June, the Government endeavored to put
through a plan for decreasing national expendi
tures by removing subsidies and allowing the
consumer to bear the burden of increased prices.
Subsidies amounting to 85 billion francs in
1945 and an estimated 89 billion francs in 1946
had been paid out by the French treasury in an
effort to keep down prices, especially to consumers.
While the principal subsidies were granted to
compensate for the higher cost of agricultural and
industrial imports, there were also heavy expend
itures for the purpose of lowering the prices of
domestic wheat, milk, coal, gas, electricity, and
transportation. A reduction in these subsidies
was considered essential from the standpoint of
public finance even before the wage increases of
1947 had added substantially to the deficit.
However, although the Ramadier Government in
late June won the support of the National As
sembly for its financial stabilization program,
including a cut of 40 billion francs in the subsidies
and the consequent raising of certain prices, the
measure provoked renewed strikes and demon
strations.
The wage and price developments which have
been discussed in the preceding pages are closely
connected with other economic and political mat
ters. On the economic side, the most important
interdependent problem is that of restoring pro
duction to higher levels. In the political sphere,
the wage-price issue has moved more and more
into the center of the political stage in France.
cause of shortages of most items and the relatively
sharper increase in prices than in wages, French
workers’ purchasing power over consumers’ arti
cles during this period was lower than in 1946 and
much lower than before the war.
Money Wages
Between October 1946 and April 1947, according
to the index published by the Ministry of National
20
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
Economy, average hourly wage rates of male
workers rose moderately—3.5 percent in Paris and
2.6 percent in the Provinces (see data for April
1947, table 1, p. 12). The series of wage statistics
prepared by the Ministry of Labor and Social
Security indicates an average increase of 5 percent
in hourly wages during the same period for workers
T able
(both men and women) in the Paris region. This
second series shows a somewhat higher rate of rise
(5.4 percent) for the quarterly period of April to
July 1947; the latest date for which detailed wage
data are available. The increase in wages accord
ing to these statistics for the first half of 1947 was
8.4 percent (see table 2A).
2A . —Average hourly wage rates in France, July 1, 1947, by industry, sex, and class of worker and wage rate indexes
Index of average
hourly wage rates
Average hourly wage rates1 (in francs2)
Industry
Unskilled laborers
Male
Female
Heavy laborers
Male
Female
Specialized workers
Male
Female
Skilled workers
Male
Female
Percent
Jan. 1, increase
1946=100 January
to July
1947
All industries................................................................
37.5
34.3
40.8
36.5
46.1
41.5
55.5
49.2
155
8 .4
Food...............................................................................
Chemical.......................................................................
Rubber..........................................................................
Paper, cardboard..........................................................
Books, printing.............................................................
Textiles..........................................................................
Clothing.....................................................................
Leather and hides.........................................................
Wood.............................................................................
Metallurgy...................................................................
Metalwork....................................................................
Fine metals, precious stones........................................
Stonecutting_________________________________
Construction, earthwork_________ _ ________
Bricks, pottery, etc_________________ ________
35.4
36.1
36.6
37.4
43.4
36.3
37.1
37.5
38.0
38.6
38.1
38.0
38.8
36.0
36.7
38.1
38.0
33.1
33.4
32.9
34.7
36.7
34.2
34.1
34.7
36.2
33.7
35.3
35.0
38.2
38.4
40.2
38.9
48.1
39.7
41.2
40.0
42.0
40.2
41.8
40.9
41.8
40.2
39.8
42.8
41.0
35.2
35.6
36.5
35.7
39.6
36.4
37.9
38.8
37.4
35.0
37.1
40.0
42.8
42.0
44.2
45.6
57.9
46.6
47.9
46.0
48.2
45.7
46.2
52.2
47.9
44.6
45.6
46.2
45.2
38.8
38.2
39.8
39.6
46.2
42.0
42.3
43.5
42.2
40.9
40.9
46.9
50.0
46.8
49.4
53.9
67.6
53.0
55.9
55.0
58.2
54.5
56.7
71.8
52.5
50.2
53.2
52.1
49.5
43.4
41.3
47.1
46.0
57.2
44.3
47.8
51.2
48.8
45.7
48.0
61.9
158
151
155
152
162
168
158
152
151
150
153
160
150
143
151
152
155
10.5
7.9
8.4
7.8
8.7
11.3
6.8
7.8
7.9
6.4
7.7
11.9
7.1
5.1
7.1
7.8
T ransportation (fvxnp.pt n ation al railroads)
Commerce.....................................................................
33.1
34.4
36.5
36.6
40.9
41.3
48.6
45.5
9 .9
1 In highest wage zones, in other zones the legal minima are 5,10,15,20, and 25 percent lower.
* On July 1,1947, the official exchange rate for the franc in the United States was 0.84 cents; following the French currency measures on Jan.28,1948, the free
exchange rate for the franc was about 0.33 cents. Also see footnote 3, p. 11.
Source: Revue Frangaise du Travail, October 1947, pp. 920 ff.
Increases in average hourly wages for men and
women between January and July 1947 were simi
lar for the classifications of unskilled laborers,
heavy laborers, and specialized workers (see table
2A). The wages of skilled men rose somewhat
more sharply during this period than women's
wages—12.3 compared to 9.8 percent. Increases
for the other classifications ranged from about 8
percent for heavy laborers to 10 percent for un
skilled laborers. Among the various industry
groups, average hourly wage rates during the
first half of 1947 rose most sharply for workers in
the food, textiles, fine metals, and commerce
classifications (see table 2-A).
Real Wages
Following a period of relative stability during
early 1947, prices moved upward sharply after
July, more than offsetting wage increases obtained
by workers. The dramatic rise in prices during the
latter half of 1947 was due to a number of factors.
The year’s crops were unusually poor because of a
drought; many subsidies which had stabilized
prices were removed, and shortages of goods were
increased by work stoppages. The Paris retailprice index rose 57.4 percent from July 1947 to
T a b l e 1 A . —Retail
price indexes (84 articles)
[Index 1938-100]
Year and month
1947: January
February,.
March__
____
April
______
May___
.T^r|P , „
July
August
September
...... .
October _
■Nnvemher
O ccom bpr. _
1949; January
... .
February_________ ____________
Paris
856
858
853
837
886
935
965
1,068
1,157
1,268
1,336
1,354
1,414
1,519
Provinces
980
977
1,144
February 1948 (see table 1A). Increases in mini
mum wages during this period were about 35 per
cent, in wages above the minimum somewhat less,
and the increase in family allowances about 22 per
WAGES IN FRANCE
cen t.1 On the basis of these figures, it can only be
concluded that the French worker was worse off
in February 1948 than in July 1947.
Wage-Price Policies
The Ramadier Government was hard-pressed in
its attempt to maintain wage-price stability during
the summer and early fall of 1947. In response to
the need to reduce Government expenditures,
many subsidies were withdrawn (see p. 19); in turn,
prices rose and new wage demands from labor fol
lowed. As elsewhere in western Europe, the
shortages in consumers’ goods (stemming in part
from poor crops) added to the inflationary pressure.
In addition, after the reorganization of the French
Cabinet in May 1947 when the Communists were
excluded, the Government could no longer rely on
the cooperation of the Confederation Generale du
Travail (CGT), the largest labor federation.i2
An increase of about 11 percent in legal hourly
wage minima was granted by the Ramadier Gov
ernment on August 21. The Schuman Govern
ment which came into office in early November
with a pledge to end inflationary trends was obliged
to meet many of the wage demands made by the
CGT during the November-December strike crisis.
Legal hourly minimum wage rates were raised
from 42.50 to 52.50 francs (about 24 percent);
wages for other workers were not raised to the
same extent. Minimum monthly wages were
raised from 7,564 to 9,590 francs. 'The new rates
included a special cost of living bonus which had
been granted as of November 27, 1947. Family
allowances and the “salaire unique” (as noted pre
viously) were increased 21.4 percent as of Decem
ber 1, 1947, by raising the monthly wage base for
computing such allowances to 8,500 francs. The
over-all increase in family allowances for 1947 was
about 50 percent (see table 3A).
i Between August and December 1947, see table 3A.
8 For a discussion of issues in Govemment-CQT relations see Notes on
Labor Abroad, February 1948 (pp. 1-4).
21
Unlike the practice in regard to family allowances
followed in other countries covered by this bulletin
these supplements in France are taken into account
in wage negotiations among labor, management,
and the Government. I t is not surprising, there
fore, that such allowances represent a substantial
part of French workers’ incomes*
T able
3A.— Family allowances in the Seine
Department, 1947
Period
After Feb. 1,1947...........................
After Aug. 1, 1947..........................
After Dec. 1, 19473........................
Basic
monthly
wage (in
francs)^
5,650
7,000
8,500
Allowance * (in francs) for
father of—
1 child
under 5 2 children 4 children
years of
age
1,243
1,400
1,700
3,729
4,200
5,100
8.077.50
9,100
11.050
1 See footnote 2 of table 2A, p. 20, and footnote 3 of text on exchange rates
for the franc.
2 Computed in the Bureau of Labor Statistics from published accounts of
various decrees; includes family allowances and supplement noted above as
“salaire unique/'
8 As of Dec. 31,1948, decree.
The currency measures adopted in early 1948
were intended to reduce price pressures by with
drawing money from circulation; to make foreign
exchange holdings of French nationals available for
needed imports; and to encourage exports by low
ering the exchange rate of the franc. However
price increases followed these moves, resulting in
new wage demands on the part of the CGT. In
order to forestall further price increases and wage
demands, the Government issued a series of de
crees on February 9, 1948, which required the (1)
public announcement in the press and on the radio
of existing wholesale and retail food prices; (2) the
return to labeling food products with wholesale and
retail prices; (3) the importation of vegetables and
wine with the view of reducing wholesale domestic
prices of these commodities; and (4) the establish
ment of special stores where “fair” prices will be
charged. A bill was passed in February which
would make illegal any unjustified price increases
since January 15, 1948.
Sweden: Wage Trends
and W age Policies,
1939-47
Mary B. Cheney 1
earnings of wage earners in eight prin
cipal Swedish industries rose on the average by
approximately 77 percent, from 1939 to May 1947.
Prices rose at retail by 54 percent and at wholesale
by 72 percent. These increases were moderate,
however, compared to those which occurred in
France and other continental countries. The
movements of wages and prices in Sweden during
the period were similar in many respects to devel
opments in the same field in the United Kingdom.2
Keal wages in Sweden, which had declined dur
ing World War II, by 1947 had reached or sur
passed the levels of 1939, which was considered a
boom year. Changes in the Swedish wage struc
ture during the war and postwar period generally
tended to reduce wage differentials between men
and women, adults and young workers, rural and
urban workers, and workers in different industries.
These changes were similar to those which occurred
in other countries.
Although the movements of wages and prices in
Sweden were not unique, the particular institutions
through which relative wage-price stability was
attained differed from those in other countries.
Chief reliance was placed upon the central organi
zations of employers and workers in exercising
control over wages through the negotiation of
collective agreements. Price control, maintained
in the early part of the war largely by voluntary
cooperation between trade associations and the
Government, and rationing were employed in an*
H ourly
i Formerly of the Bureau's Staff on Foreign Labor Conditions.
* See p. 1 for similar account of wage trends and wage policies in United
Kingdom, and p. 48 for Canada.
22
attempt to stabilize prices and to assure an ade
quate distribution of war-reduced supplies—
thereby forestalling demands for higher wages.
Neutral Sweden escaped the most disrupting
effects of the war. The stability of her wage-andprice structure was threatened, however, by the
disorganized state of world trade, upon which she
had so greatly depended, and in the postwar
period, by the sharp competitive demand for
labor under full-employment conditions. Since
1945, when Sweden was able to export a large
wartime-accumulated stock of products, she has
experienced a heavy drain on her foreign exchange
and on her gold reserves required to pay for
imports of essential raw materials, such as United
States coal. The Government made special efforts
to offset this continued drain by increasing output
in the export industries, at the same time limiting
domestic consumption of the luxury items which
have made up the bulk of postwar imports. The
effort to increase production has been seriously
hampered by a severe shortage of workers.
According to a survey made by the Swedish Em
ployers' Confederation in the summer of 1946,
manufacturing industries needed 50,000 additional
workers.
Money Wages
By May 1947, average hourly earnings in eight
principal Swedish industries were 76.9 percent
above the 1939 level (see table 1). More com
prehensive earnings data, which also cover trade
and public service, indicate that between 1939
and 3946 the average earnings of men rose by 51.1
percent and those of women by 64.3 percent (see
table 2).
Average weekly earnings in 1946 (the latest
period for which information is available) were
56.8 percent above the 1939 level. This increase
was not much greater than that in average hourly
earnings (approximately 53 percent in eight prin
cipal industries) for the same period, because
working hours were not materially lengthened in
Sweden during wartime (see table 3).
Increased earnings were accounted for by costof-living wage supplements granted under collec
tive agreements; negotiated increases in basic
wage rates and in minimum rates in certain indus
tries; increases in piece rates; and greater output
by pieceworkers. Toward the end of the war,
SWEDEN: WAGE TRENDS AND POLICIES
competitive bidding by employers for scarce labor
tended to raise wage rates above the level fixed
by collective agreements.8
Following the reopening of normal trade chan
nels after the war, earnings reflected increased
business activity. The Swedish Employers’ Con
federation has estimated that between 1945 and
1947 basic wage rates increased, on the average,
15 percent in industries covered by collective
agreements.
The increase in rates has been partially offset
by a gradual shortening of the workweek since
the peak year of 1945. Weekly hours, which
during the period from 1942 to 1945, as shown in
table 3, averaged 47 or slightly over, dropped in
1946 to 46.6, and in February 1947 (not a typical
month) to 45.0.
T able 1.—Sweden: Average hourly earnings in 8 prin
cipal industries, 1989-47 1
Average hourly earn
ings (in kronor2)
Industry
Percent in
crease
to
1939 to 1939
1946 May
1947
1939
1946
May
1947
Average.................................................. 3 1.17
1.79
2.07
53.0
76.9
1.33
1.06
1.05
1.29
1.25
.87
1.04
1.18
1.95
1.72
1.70
1.89
1.75
1.45
1.65
1.80
2.23
2.02
1.96
2.12
2.00
1.73
1.99
2.06
46.6
62.3
61.9
46.5
40.0
66.7
58.7
52.5
67.7
90.6
86.7
64.3
60.0
98.9
91.3
74.6
Ore mining and metal manufacturing.
Clay and stone......................................
Lumber—...............................................
Paper and graphic................................
Foodstuffs..............................................
Textiles and clothing............................
Leather, hair, and rubber ..................
Chemical................................................
i Sources: Sweden, Royal Social Board, Lonestatistisk Arsbok 1939,
Stockholm, 1941 (pp. 84-95), Sociala Meddelanden, Stockholm, July 1947
(pp. 634-635); Central Statistical Bureau, Statistisk Arsbok 1942, Stockholm,
yj. zvzj.
2 The United States exchange rate for the Swedish krona was about 23.9
cents up to July 1946 when the krona was revalued; from that date the rate
has been 27.8 cents.
However, great caution should be used in comparing Swedish wage data
in this article with United States wages. Comparisons of wages between
countries are difficult to interpret because of the fact that foreign exchange
rates do not truly reflect international differences in living costs and because
of the lack of information on relative productivity by industry in different
countries. Wherever productivity studies have been made, the differences
favor the United States.
3 Computed in the Bureau of Labor Statistics from data appearing in
Lonestatistisk Arsbok, 1939, by weighting average hourly earnings in each
industry according to employment statistics.
The Council of the Confederation of Swedish
Trade Unions urged affiliated groups to restrict
new wage demands for 1948 to increases justified
by advances in living costs or in productivity.4
In any case, family allowances, which are to be
introduced on January 1, 1948, will increase
workers’ incomes.*
« Wage Trends in Sweden since 1939, by Bertil Kugelberg, managing
director of the SAF, in Skandinaviska Banken Aktiebolag, Stockholm,
July 1947 (p. 64).
* The American-Swedish News Exchange, News From Sweden, New
York, September 5, 1947 (pp. 1-2).
7 8 5 0 8 3 -4 8 -
5
23
T able 2.—Sweden: Average hourly earnings in industry,
trade, and public service, by sex, 1989-46 1
Men
Industry
Women
Average
Average
Per
Per
hourly
hourly
cent
cent
earnings
earnings
in
in
(in kronor2) crease, (in kronor2) crease
1939 to
1939 to
1939 1946 1946 1939 1946 1946
All industries—...............................
1.39
2.10
51.1
0.84
1.38
64.3
Ore mining and metal manu
facturing.......................................
Clay and stone...............................
Lumber.............. ..........................
Paper and graphic..........................
Foodstuffs.......................................
Textiles and clothing.....................
Leather, hair, and rubber.............
Chemical-......................................
Construction ..................... ......... .
State works and building..............
Municipal works and building...
Commerce and warehousing.........
Transportation_______________
Laundries........................................
1.42
1.12
1.10
1.41
1.45
1.11
1.28
1.37
1.89
1.48
1.78
1.39
1.65
1.34
2.14
1.88
1.81
2.12
2.04
1.86
2.02
2.07
2.72
2.32
2.52
2.03
2.39
2.09
50.7
67.9
64.5
50.4
40.7
67.6
57.8
51.1
43.9
56.8
41.6
46.0
44.8
56.0
.96
.69
.75
.88
.91
.79
.84
.83
1.42
1.20
1.30
1.43
1.40
1.36
1.35
1.31
47.9
73.9
73.3
62.5
53.8
72.2
60.7
57.8
1.04
1.02
.83
1.73
2.03
1.29
66.3
99.0
55.4
.81
1.30
60.5
1 Sources: Sweden, Royal Social Board* Sociala Meddelanden, Stockholm.
July 1947 (pp. 628-629); Lonestatistisk Arsbok, 1939, Stockholm, 1941 (pp.
84-95).
2 gee table 1, footnote 2.
Real Wages
Official indexes of real earnings (see table 3)
indicate that average annual earnings of women
workers in Swedish manufacturing and non
manufacturing industries had regained their 1939
purchasing power in 1945, and those of men
workers in 1946. Upward trends in real earnings
continued, and latest figures for 1946 indicate a
real-eamings level 5.9 percent higher than the
1939 annual average. If weekly instead of annual
average earnings had been used in computing the
real-wage index, the increases noted in the official
index for 1945 and 1946 would be 3 to 4 percent
higher.
To obtain these real-earnings figures, the money
earnings were deflated by the official cost-ofliving index. In Sweden, two official cost-ofliving indexes are prepared by the Royal Social
Board. In addition to the items of food, clothing,
rent, fuel and light, and miscellaneous goods and
services which are included in the first index, the
second index reflects also the movement of direct
taxes paid by wage earners. It is the second
index which is used as a deflator in the official
computations of reahwage indexes and in adjust
ing wages to changes in the cost of living under
terms of the basic wage agreements. Although
both indexes are presented in table 3 for purposes
of comparison, all references in this article are
made to the index which includes the movement
of direct taxes.
24
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
T able 3.—Sweden: Cost-of-living index, and earnings and hours in industry, trade, and public service, 1989- 4? 1
[Indexes, 1939=100]
Average annual earnings8
Cost of living index—
Date
With
taxes
Without
taxes
Average
weekly
earnings
(in kronor)8
Indexes of—
In
kronor
Money
earnings
Average
hours per
w eek4
Real earnings
Total
Men
Women
1939.....................................................................
1940.....................................................................
1941.....................................................................
1942.....................................................................
1943.....................................................................
1944.....................................................................
1945.....................................................................
100
114
129
140
142
143
143
100
111
127
137
140
139
139
58.02
62.79
67.71
73.49
77.28
80.12
84.53
2,825
3,028
3,213
3,538
3,683
3,808
3,926
100.0
107.2
113.8
125.2
130.4
134.8
139.0
100.0
95.5
89.2
90.8
93.3
95.7
98.6
100.0
95.3
89.1
90.7
92.9
94.9
97.6
100.0
95.2
89.3
90.5
94.5
99.0
103.6
847.1
46.4
46.9
47.0
47.1
47.0
47.2
1946 (year).........................................................
First quarter __
Second quarter__ _ _ ___ __ ___
Third quarter. _ _ _ __ __________
Fourth quarter __ _ _ ___ __
143
143
144
143
145
140
138
139
139
142
90.97
4,293
152.0
•105.9
•104.7
•110.9
46.6
1947:
First quarter____________ _ ______
Second quarter _ _
_ ..
150
154
142
T45.0
1 Sources: Sweden, Royal Social Board, Sociala Meddelanden, Stockholm,
various issues; LOnestatistisk Arsbok, Stockholm, various years.
* See table 1, footnote 2.
* Data on annual earnings are obtained each year by the Royal Social
Board in surveys of Swedish industry, trade, and public service. (In 1945,
11,406 firms, employing 763,711 wage earners, responded to questionnaires
distributed by the Social Board). Employers submit annual wage data
only for workers employed throughout the year or for that part of the
year in which the industry is generally in operation. The official wage year
book issued by the Social Board notes that this type of average does not show
the effect of unemployment on workers’ annual earnings. An examination
of earnings for the period 1939-44, for which comparable data are available,
indicates that trends in average annual earnings closely followed those for
hourly and weekly periods.
4 November of each year.
8 Last prewar figure for 1937; agrees with figure computed from hourly
and weekly earnings.
8 Computed in the Bureau of Labor Statistics from data appearing in
Sociala Meddelanden for July 1947.
i February.
Wage-Structure Changes
other parts of Sweden was generally between these
two figures, in accordance with the degree of ur
banization.5
Increases in earnings during the war and
postwar periods were most marked in the low-wage
industries, such as clay and stone, textiles and
clothing, and lumber (woodworking) and leather
(see tables 1 and 2). On the other hand, increases
in the industries paying high wages—such as
construction, transportation, commerce, and munic
ipal activities and buildings (in the case of male
wage-earners)—were less than the average for all
industries. The reduction in the gap between
wages in the various industries is explained in part
by the nature of individual wage agreements. In
some industries, wages are pegged to a fixed level
by so-called normal wage agreements, which
establish a full schedule of wage rates for various
occupations. In other industries, in which only
minimum rates are set, workers may increase
their earnings above the minimum established, by
reason of skill and exceptional output. Thus, the
During the war period, some leveling occurred
in the earnings of men and women, and the earning
position of minors (under 18 years of age) improved
relatively, compared to that of adult male workers.
The changes in average weekly earnings for the
three groups of workers between 1939 and 1946
are shown below, together with ratios of earnings
of women and minors to those of adult male
workers.
_______ 19S9________
_______ me_____
Kronor1
Men_____ 65. 68
Women__ 38.85
Minors___ 26.55
Ratio of
men's wage
Kronor1
Ratio of
men's wage
100.0
59.2
40.4
99. 65
63. 30
46. 78
100.0
63.5
46.9
t See table 1, footnote 2.
The narrowing of wage differentials conformed to
labor’s plan to introduce gradually the policy of
equal pay for equal work.
Differentials between rural and urban earnings
also narrowed. Between 1939 and 1945, average
hourly earnings increased by 51.4 percent in rural
areas and by 32.1 percent in Stockholm. As
table 4 indicates, the percentage of increase in
8 Differences in earnings also exist between the various Swedish l&n (prov
inces). In 1945, average male hourly earnings in Krdnobergs l&n (the lowest
paying province) were kronor 1.61, or 63.1 percent of hourly earnings in
Stockholm.
SWEDEN: WAGE TRENDS AND POLICIES
relative level of wages in the latter category
of industries could change, despite the provi
sions of the 1939 basic agreement (described
below), which called for automatic percentage
adjustment of all wages according to given
changes in the price level. Some of the reduction
in the differential in wages also may be attributed
to increased output of pieceworkers (piece rates
are paid by over half of Swedish industry).
T able 4.—Average hourly earnings of adult men (<excluding
foremen), by cost-of-living areas in Sweden, 19S9 and 19451
Cost-of-living areas *
Hourly earnings
(in kronor3)
1939
Area A ______________ ___________
Area B __________________________
Aro* n ,
_.
_
. __ _
Area n
.
Area E __________________________
Area F ....................................................
Area O
Area H__________________________
Area T
_ ..... . . . . . . . . _
1.07
1.20
1.28
1.34
1.44
1.46
1.66
1.95
1.93
1945
1.62
1.73
1.85
1.89
2.01
2.03
2.20
2.44
2.55
Percent
increase,
1939 to
1945
51.4
44.2
44.5
41.0
39.6
39.0
32.5
25.1
32.1
* Source: Sweden, Royal Social Board, LOnestatistisk Arsbok 1839.
Stockholm, 1941 (p. 105), and 1945. Stockholm, 1947 (p. 123).
* Areas A and B consist of country regions; C, D , and E are mostly cities
and closely populated areas; F, Q, and H are the larger cities and industrial
areas; and area I includes Stockholm and its suburbs.
’ See table 1, footnote 2.
Wage and Price Policies
At the beginning of World War II, the central
organizations of employers and trade-unions—
the Swedish Employers' Confederation (SAP) and
the Confederation of Swedish Trade Unions (LO)
—were accustomed to working together on com
mon labor-market problems and exercised consider
able control over negotiation of the collective
agreements concluded between their member
federations, as well as between local unions and
individual employers. Collective agreements were
customarily industry-wide (though with local wage
variations). Basic agreements took the form of
recommendations to members, which were widely
accepted. During the war period, wage stabiliza
tion was achieved almost entirely through basic
agreements between the SAF and the LO, which
were taken into consideration in the actual wage
agreements. Because of the nature of the indus
try-wide collective agreements, there was (as
noted in the preceding discussion) some flexibility
in the wage structure.
A basic agreement providing for adjustment of
wage rates in accordance with changes in the official
cost-of-living index was signed by the SAF and
the LO in December 1939, and was renewed each
year until 1946. Wage increases under its terms
25
did not fully compensate for increases in living
costs. Supplements to wages during 1940 equaled
75 percent of the rise in the cost-of-living index;
during 1941, 50 percent; and in 1942, 60 to 70
percent. The dangers of a wage-price spiral, in
view of the curtailment of supplies caused by the
war, were recognized by both sides.
In January 1943, when the cost-of-living index
was 239 (July 1914=100), employers and tradeunions agreed that no further increases in wages
should be made until the index reached 249. This
modification of the basic agreement followed the
Government's announcement of a general price
freeze (described below) and was continued in
effect until December 1946.
The standards set by these basic agreements
appear to have been widely observed during the
war years. Average weekly earnings increased
from 1939 to 1945 by 45.7 percent, compared
with an increase of 43 percent in the cost-of-living
index (see table 3). Adjustment of substandard
rates through individual contract negotiations was
permitted.
The formula appears to have been less rigidly
applied during the year 1945, when production as
well as profits were rising sharply. In December
1946 (when it appeared that the cost-of-living
index would soon exceed the critical point of 249),
instead of renewing the agreement, the SAF and
the LO recommended that as of May 1,1947, wage
rates be adjusted upward by whatever amount
would be needed to bring them to 25.7 percent
above the 1938 level (since 1942, the cost-of-living
supplement had been 20.7 percent of that level).
This meant average wage-rate increases of from
3 to 4 percent above the preceding year's level.
However, in some dispute cases (most of which
were settled by arbitration) increases as high as
8 percent for men and 12 percent for women were
obtained.
While direct wage stabilization was achieved by
trade-union and employer agreement, the Govern
ment was indirectly but vitally involved through
its price-control policy. Legislation providing for
price control and prevention of hoarding of goods
was passed early in 1939. Following the outbreak
of war, subsidies and control over imports were
established and the Government was empowered
to determine ceiling prices and to encourage the
organization of open-membership cartels which
might themselves control prices.
26
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
During the early part of the war, the Govern
ment relied primarily upon associations of manu
facturers, wholesalers, and retailers to control
prices voluntarily. Compulsory price-control
powers were exercised only when the desired
results could not be obtained through voluntary
agreements between the Government and the
various associations.
Prices were fixed on the basis of re-acquisition
costs during the first year and a half of price
control. In most cases the absolute amount of
profit, rather than the profit ratio, was kept
stable. A Price Control Act, passed in mid-1941,
extended the powers of the Price Control Board
and gave the Government added authority to
form cartels, to prevent the starting of new enter
prises, and to prohibit profiteering. Under the
1941 act, firms were permitted to raise their prices
only to the extent that their variable costs had
gone up (i. e., higher unit overhead costs due to
lower production did not justify a price increase).
These measures were not entirely effective, as the
cost-of-living index rose 40.7 percent between the
third quarter of 1939 and the same quarter of
1942. Under these circumstances and in view of
the approaching renegotiation of collective agree
ments and agricultural prices, the Government
announced a general price freeze in November
1942.
Sweden’s relative success in stabilizing prices
after 1942 (as reflected by the cost-of-living
indexes as shown in table 3) was due, in part, to
the introduction of substitutes for items which
no longer could be imported and to some increase
in production and productivity. Stabilization of
prices for consumers’ items was also due to the
widespread use of subsidies to producers and
direct rebates to large groups of lower-income
families. In addition to expanded milk subsidies
paid to smaller producers prior to the war, edible
fats, grains, and imported foods were subsidized
during the war and postwar periods. Direct
consumer rebates on fats and milk were made
through a price-discount system under which
stamps were issued entitling purchasers to buy
specified amounts of food at less than market
price. This system was inaugurated in 1940,
and in the following years as many as 3.2 million
persons (out of a total population of about 6.5
million) held price discount cards.
Price controls were continued into the postwar
period, but the subsidy program was curtailed to
some extent. In July 1946, Sweden revalued the
krona upward by 17 percent,6 in an effort to
counteract rising prices in foreign countries and
thus cheapen her own imports. In addition,
import subsidies—mostly for clothing and shoes—
were introduced in December 1946 to help
neutralize high import prices. By the spring of
1947, strict import licensing was introduced in a
program designed to limit luxury imports and
thus conserve Sweden’s dwindling foreign-ex
change holdings needed for purchases of raw
materials. More stringent price controls were
introduced in April 1947, because the existing
regulations, which covered approximately 50
percent of all consumer goods, had apparently
lost their effectiveness. This gradual rise in
prices was due in part to large-scale conversion
by manufacturers of staple items to the produc
tion of the more profitable—and uncontrolled—
luxury goods.
Plans for further restrictions on luxury imports
were announced by the Government in mid-June
19477 as part of its anti-inflation program.
This over-all economic program is intended to
direct production into necessities and exportable
items by means of raw-material allocation and
control over new investments. The Social-Demo
cratic Government also called upon the unions to
cooperate in the voluntary reallocation of labor
to those export industries in which the need for
workers is greatest and to employ restraint in
making new income demands. The Government
promised, in return, to stabilize the price structure
by strengthening price-control regulations; to
resist farmers’ demands for higher agricultural
prices; and to forbid increases over the 1946
level in corporation dividends. Recognizing the
critical labor shortage and inadequate industrial
output, the trade-union leaders agreed not to
press for a shorter workweek.*i
c See Monthly Labor Review, January 1947 (p. 30) or Bureau of Labor
Statistics Serial No. R. 1873 (p. 3).
i See Notes on Labor Abroad, Bureau of Labor Statistics, August 1947
(pp. 10-11).
SWEDEN: WAGE TRENDS AND POLICIES
Appendix.— Sw eden, as of February 15,19481
Wage-Price Changes
Between May and August 1947, Swedish wages
remained quite stable, average hourly earnings for
workers in eight principal Swedish industries rising
by 1.4 percent (see table 1A). Increases in aver
age hourly earnings were most marked during this
period in the chemical and paper and graphic
industries; and the increase was below the average
in textiles and clothing, foodstuffs, and leather,
hair, and rubber industries.
T able 1A.—Sweden—Average hourly earnings in 8 'prin
cipal industries, August 1941
Industry
Average hourly Percent increase
earnings,
August
August 1947 May to
1947
(in kronor 0
Average_______________-____ _____ __
2.10
1.4
Ore mining and metal manufacturing........
nifty ftnrl stone
_______________
Lumber ___________________ -___ —__
Paper and graphic____________________
Foodstuffs __________________________
Textiles and clothing.________________
Leather hair and rubber
fJhemicftl
________________________
2.26
2.06
2.00
2.17
2.02
1.74
2.01
2.13
1.3
2.0
2.0
2.4
1.0
.6
1.0
3.4
1 See footnote 2, table 1, on the exchange rate of the Swedish krona in the
United States.
Source: Sociala Meddelanden, November 1947, pp. 1002-3.
Although available price and wage data do not
refer to the identical periods, the raise of about 1.3
percent in the cost-of-living index between June
and September 1947 (second and third quarters)
would indicate that little change occurred in real
hourly earnings during this period. For the third
quarter of 1947, the cost-of-living index (including
direct taxes) rose to 156 from 154 in June. (See
table 1, 1939=100.)
1 The appendix tables are numbered to correspond with those in the original
articles that deal with the same or related series of statistics. The letter A
has been attached to the table number in the appendix table in each instance.
27
Although on the average Swedish workers'
real incomes continued above the prewar level
after the latter part of 1945 and early 1946, the
purchasing power of their earnings was limited
during the postwar period by certain shortages in
consumers' goods. Consumption of meat, clothing,
and furniture per capita has been below prewar
levels according to a study of the Swedish Federa
tion of Trade Unions.
Wage-Price Policy
No important changes took place in Swedish
wage-price policies during the latter part of 1947
or early 1948. The Swedish Federation of Trade
Unions (LO), in cooperation with Government's
voluntary stabilization program, called on member
unions not to ask for wage increases except with
greater output or to compensate for price rises.
Wage contracts for 1948 adopted during the col
lective bargaining negotiations of late 1947 and
early 1948 only included provisions for modest
increases. The automatic wage adjustment clause
with changes in the cost-of-living index which had
been suspended the year before was not included in
these contracts.
On October 30, the Prime Minister indicated the
main points of the Government's proposed stabili
zation program. Without mentioning specific
measures to be taken, the Prime Minister called for
(1) the curtailment of investment, (2) a wage
freeze to be accompanied by ceilings placed on
corporation earnings and the sterilization of excess
profits, (3) and budgetary economy together with
increased indirect taxes on nonessential items.
Beginning January 1, 1948, family incomes in
Sweden were to be augmented by child-support
subsidies of 260 kronor annually without a means
test for each child up to the age of 16 years. These
new benefits furnish supplements to the incomes of
many workers.
Denmark: Wage Trends and
Wage Policies, 1939-471
D a n i s h n o n a g r i c u l t u r a l w o r k e r s appeared
somewhat better off in 1947 than in 1939. Their
earnings had increased by 73 percent, compared
with about a 60-percent rise in living costs, as
measured by the official index numbers. There
had been, however, a number of lean wartime
years, during which the wage earners’ level of
living was seriously depressed. This was due in
part to governmental suspension of the 1939
agreement for adjusting wages to compensate in
full for increases in living costs. During the
occupation, wage ceilings were more rigid than
price ceilings. After liberation, wage controls
were relaxed. However, price controls, the sub
sidy program, and rationing were continued in
full force through the summer of 1947, and the
rationing system was extended. Early in 1946,
rationing of clothing and textiles was introduced;
meat rationing was introduced on August 11,1947.
The addition of the supplements raises the
hourly earnings to 2.65 kroner in January 1947
compared with 1.53 kroner in July 1939. However,
the percentage increase between the two dates is
the same with and without the supplements.
The earnings data in table 1 include pay for
both piece work and time work. Pieceworkers’
earnings exceeded those of time workers by about
25 percent before the war and by about 19 percent
in 1946. The proportion of total hours worked
compensated by piece rates also declined. The
average hourly earnings of pieceworkers and time
workers for the year 1939 were 1.66 and 1.33
kroner, and for the year 1946 were 2.76 and 2.32
kroner, respectively. Thus, hourly earnings in
creased 66 percent for piecework and 74 percent
for time work.
T a b l e 1. —Denmark:
Average straight-time hourly earnings,
in manufacturing, handicraft, and commerce, by sex and
skill, 1939-47 1
Average straight-time hourly earnings
(in kroner)
Year
Straight-time hourly earnings of workers in
Danish industrial, handicraft, and commercial
establishments were 73 percent higher in January
1947 than in July 1939, 2.62 kroner compared
with 1.46 kroner. (See table 1.) *
Danish workers also receive vacation pay (4 per
cent of wages paid during the year, according to a
law of 1938), payments for overtime, and shift
premiums. These supplements averaged 12.9 0re
an hour in the first quarter of 1947, compared with
7.3 0re an hour in the third quarter of 1939.®
i Prepared by Jean A. Flexner of the Bureau’s Foreign Labor Conditions
Staff.
* The wage data discussed in this article were collected by the Danish
Employers’ Association from its members who employ approximately onethird of the total trade-union members in Denmark, and were published
in the Arbejdsgiveren, and in the official bulletin (Statistiske Efterretninger).
The analytical material is from the reports of Edith C. Wall, U. S. Embassy,
Copenhagen, and also from the Danish Efterretninger.
The wage data are published quarterly and the four quarters of the year are
designated as the January, April, July, and October quarters.
The Danish krone=100 fire. The krone in terms of U. S. currency was 20
cents during the year 1039, 19 cents in the period January to April 1940, and
21 cents in 1946 and 1947 (1st quarter).
Comparisons of wages between countries are difficult to interpret because
foreign exchange rates do not truly reflect international differences in living
costs and because of the lack of information on relative productivity in
individual industries in different countries. On the average, differences in
productivity markedly favor the United States.
* Overtime pay is relatively unimportant because the normal weekly
schedule fixed by union agreements is 48 hours spread over 6 days, and con
sequently there is little opportunity for overtime,
28
Men (adult)
A11
A
ll
Wage Trends, 1939-47
workers
Un
Skilled skilled
Women
Total
1030.
____________
T hird quarter ,
1040
_________________
1041 _ . . ,
___
.
_____
1.47
1.46
1.64
1.76
1.72
1.71
1.91
2.06
1.46
1.45
1.61
1.77
1.56
1.56
1.73
1.91
0.96
0.96
1.08
1.18
1042
_______
First, quarter _M
Fourth quarter.
......
1043____ _____________________
1044
_
...
194S
. . . _______
F irst quarter _
Fou rth quarter _ .
1.84
1.76
1.91
1.97
2.09
2.25
2.13
2.37
2.16
2.08
2.21
2.30
2.41
2.60
2.43
2.77
1.85
1.74
1.90
1.98
2.12
2.26
2.13
2.37
1.99
1.88
2.03
2.12
2.24
2.41
2.25
2.55
1.22
1.20
1.24
1.28
1.37
1.54
1.46
1.63
1046
2.48
2.36
2.45
2.90
2.77
2.86
2.49
2.37
2.47
2.67
2.55
2.65
First quarter _ ..
_ ..
Seeond quarter.
T h ird quarter „. _.
F ou rth quarter __ _
1947: First quarter___________
2.52
2.55
2.52
2.94
3.02
2.99
2.54
2.56
2.53
2.71
2.75
2.74
1.73
1.65
1.73
1.75
1.78
1.79
* Denmark. Det Statistiske Departement. Statistisk Aarbog, various
issues, and Statistiske Efterretninger, various issues.
Between the third quarter of 1939 and the
beginning of 1947, the cost-of-living index pub
lished by the Danish Government rose by about
59 percent (see table 2). A further rise brought the
total increase to about 64 percent in the last
quarter of 1947. Even with this price rise, Danish
workers’ real wages in late 1947 appeared to be
somewhat above the prewar level.
The unions, however, have stated that the of
ficial index does not accurately measure increases
that have occurred in workers’ living expenses.
29
DENMARK: WAGE TRENDS AND POLICIES
They claim that deterioration in the quality of
certain products necessitates the consumption of
larger quantities than those specified in the budget
currently priced, and that higher priced goods
must be substituted for the lower priced articles
in the budget which are not always available.
T able 2.—Denmark: Index numbers of hourly earnings and
cost of living, 1939-47
[Third quarter 1939-100]
Indexes of—
Hourly
earnings
all work
ers^
Period
Cost of
living*
__
1939__________________________________
Third quarter _ ___ _ _
194fl_ r_r________ _______________________
1941__ _ . . . .
_ ______ _____________
1949.
____________________
First quarter ___
Fourth quarter
101
100
112
120
126
120
131
101
100
123
147
153
152
155
1943
,
_________________
Second quarter
,,
..
Fourth quarter..
_
_____
_________________________________
1944.
Fourth quarter .
194/5
____ ______
First quarter
r , _ _
Fourth quarter
,
_____ ______
135
136
141
143
148
154
146
162
156
156
156
157
158
159
158
159
194B _____________________________________
First quarter
____
Second quarter
Third quarter
Fourth quarter
1947_______________________________________
First quarter.
Second quarter .. .
Third quarter
Fourth quarter r
170
163
170
173
175
158
158
157
167
159
173
160
162
163
164
* Computed by Bureau of Labor Statistics on basis of data shown for all
workers t&ble X#
* The Danish index is a quarterly index which is published in the official
bulletin on a 1935 base. The same index, with a 1914 base, is referred to in
national wage agreements. The Bureau of Labor Statistics has converted
the index to a third quarter 1939 base in order to compare wage and price
trends from 1939 to date. Direct taxes are included in the index (representing
6.7 percent of the total). The subgroup which includes such taxes increased
somewhat more sharply than the index as a whole during the period covered
by this table.
Wage Structure, 1939-47
The ratio between the hourly earnings of skilled
and unskilled men was about the same in January
1947 as in July 1939. The women wage earners’
position relative to men had slightly improved.
Taking the earnings of skilled men in each year
as 100, the relationship between the three groups
was as follows:
J u ly i9 S 9
January
1U7
Men, skilled_________ .......... 100.0
Men, unskilled______ .......... 84.8
Women_____________ .......... 56.1
100.0
84.6
59.9
A considerable spread existed during the first
quarter of 1947, however, between straight-time
hourly earnings in occupations within the skilled
group of trades. Furthermore, the rates of in
crease from July 1939 to the first quarter of 1947
were by no means uniform within each of the
groups shown in table 3. Some of the most pro
nounced increases occurred in occupations that
were very low-paid before the war—e. g., seam
stresses, women in laundries, and female boot-andshoe workers. The earnings of skilled male bootand shoe-workers also increased sharply.
Earnings of men, both skilled and unskilled, in
creased more in the Provinces than in Copenhagen
during the period under consideration. In
women’s trades, however, the reverse was true;
women’s earnings in Copenhagen rose more than
in the Provinces. At the end of the period, the
differentials between Copenhagen and the Pro
vinces were almost as marked as in 1939.
T able 3.—Denmark: Average straight-time hourly earnings
for selected occupations, by sex, in Copenhagen and the
provinces, first quarter 19471
Hourly earnings, first quarter
1947, i n Copenhagen
Occupation and sex
Provinces
Per
Per
cent
cent
in
in
Kroner crease Kroner crease
from
from
July
July
1939
1939
Men, skilled trades *...................................
Boot and shoe workers........................
Bricklayers............................................
Building carpenters..............................
Electricians...........................................
Painters.................................................
Smiths and machinists........................
Typesetters...........................................
3.23
3.35
3.56
3.30
3.06
3.44
3.24
3.08
68.2
92.5
34.3
61.0
66.3
67.8
73.3
67.4
2.76
2.63
2.72
2.64
2.64
2.72
2.85
2.81
74.7
100.8
56.3
71.4
66.0
72.2
81.5
67.3
Men. unskilled trades1_______________
Brewery, etc., workers........................
Textile workers.....................................
Excavation and concrete workers___
Workers in iron and metal industries.
Store and warehouse workers.............
Dockers.................................................
2.65
2.58
2.63
3.01
2.68
2.39
2.93
67.7
66.5
71.9
58.4
78.7
78.3
58.4
2.43
2.48
2.42
2.56
2.45
2.24
2.83
73.6
71.0
77.9
84.2
80.1
71.0
61.7
Women’s trades *........................................
Unskilled cigar workers.......................
Textile workers.....................................
Seamstresses.......................... ..............
Boot and shoe workers........................
Workers in iron and metal industries.
Paper goods and box workers.............
Laundries..............................................
Charwomen..........................................
1.86
2.15
1.86
1.94
1.97
1.87
1.77
1.58
1.58
89.7
72.0
80.6
128.2
95.0
90.8
96.3
95.0
79.5
1.68
2.02
1.64
1.69
1.64
1.59
1.60
1.45
1.52
80.6
56.6
78.3
113.9
95.2
89.3
81.8
95.9
90.0
i Source: Denmark. Statistiske Departement. Statistiske Efterretninger,
November 29,1947, No, 45 (pp. 374-77); and June 1,1940, No. 20 (pp. 144-47).
* Total, all trades. Only occupations employing over 1,000 workers in
Copenhagen are shown.
30
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
Wage and Price Policies
Wage controls during the war period were
effected by agreement between the central federa
tions of employers and trade-unions but were
modified by legislation. A nation-wide basic
agreement between the Danish Employers7Feder
ation and the Confederation of Trade Unions in
October 1939 provided for wage supplements
exactly proportional to the rise in the cost-of-living
index. However, this agreement was modified in
March 1940 and was suspended altogether by the
coalition Government which functioned during the
Nazi occupation, while ceilings were imposed on
prices as well as on wages. In order to keep
down the prices of staple goods, subsidies were
granted to producers, and price discount cards
were given to needy consumers.4
In spite of the ceilings, prices soon resumed
their upward trend, but the rate of rise decreased
in 1943. Although the Government from time to
4 See Labor Conditions in Denmark, Monthly Labor Review, November
1944, or Serial No. R. 1709 (p. 7) and Danish Social Policy in Wartime, Inter
national Labor Review, August 1944 (pp. 186-206).
time adjusted wages to compensate for increases
in the prices of bread and other essential goods,
these cost-of-living supplements did not fully
compensate for the price rise and during the entire
occupation period hourly earnings lagged behind
the cost of living. The effect of the Governmentauthorized increases in March and August 1945
was to reverse this situation and, by the end of
1945, hourly earnings were 62 percent and the
cost-of-living index was 59 percent above the
July 1939 level.
The wage agreements negotiated for practically
all Danish industries in the spring of 1946 raised
basic rates and again linked wage rates to the
cost-of-living index. The agreements prescribed
semiannual wage adjustments of 5 0re an hour for
every 6-point rise in the cost-of-living index based
on 1914; the index was 291 in the fourth quarter
of 1945. (This is equivalent to a rise of 3.3 points
of the index used in table 2 which has been con
verted to a third-quarter 1939 base.) On Sep
tember 1, 1947, the first wage adjustment under
this formula took effect.
Belgium: Wage Trends and
Wage Policies, 1939-47 1
t h e b e g i n n i n g op 1947, wages and official
prices in Belgium were a little more than three
times their prewar levels, according to indexes
issued by the Ministry of Economic Affairs,
Although these indexes do not reflect the wage
levels of all workers or the prices of all items
making up the cost of living, they do demonstrate
that real wages were substantially higher than
they had been during the war and immediately
afterwards. Preliminary figures indicate that
prices continued to rise during the year 1947; it
is not possible to determine what these price
increases meant in terms of the buying power of
wages, inasmuch as no official wage data were
published during this period.
The policy of the Belgian Government fol
lowing liberation was to restore the prewar level
of workers’ real wages by means of increased pro
duction and price reductions rather than through
wage increases. Wage increases were generally
authorized only when inequities were such that
no other' course appeared feasible. By the end
of 1947, the country had made substantial gains
in production and most kinds of consumer goods
were available in normal supply.
By
Wage and Price Trends
The latest official wage data released by the
Ministry of Economic Affairs are indexes based
on the hourly earnings of workers in 10 industries
in December 1946, which follow.2 The Ministry’s
indexes are based on earnings, excluding socialsecurity premiums deducted by employers. In
cluding these premiums, the weighted average index
is about 360 rather than the 320 shown.
Three general increases in basic wages were
authorized between 1939 and the end of 1947: 8
percent over 1940 rates, authorized in May 1941
by the Nazi occupation authorities; 60 percent*
t Prepared by Jane H. Palmer of the Bureau’s Staff on Foreign Labor
Conditions.
* Compilation of this index was a one-time operation based on research
carried on under the Ministry of Economic Affairs. Data were obtained
b y questionnaire for each quarter of the years 1936, 1937, 1938, and 1946.
The index covers the hourly earnings of adult male workers (skilled, semi
skilled, and unskilled) and adult women workers (semiskilled and unskilled);
it includes regularly paid bonuses, and excludes payments in kind and
bonus payments which were individual or exceptional in nature.
over 1940 rates effective on September 1, 1944,
by authorization of the Belgian Government; and
a further 20 percent effective August 1, 1945, also
authorized by the Belgian Government. Pay
ment for 8 legal holidays a year, made obligatory
for all categories of workers by Government decree
in October 1946, was estimated to be the equiva
lent of a 2.66-percent increase in wages.
In d exes
1 9 3 6 -8 8 = 1 0 0
o f h o u r ly e a rn in g s
D ec e m b e r 1946
(
C oalm ines..______________________
Steel mills-----------------Metal manufacture_________________
Construction_______________________
Paper and cardboard__________
Chemical products___ ______________
Hides and leather__________________
Food products_____________________
Breweries, etc______________________
Textiles_____________________
Weighted average____________
)
367
303
301
324
310
294
322
294
286
319
320
Increases affecting special categories of workers
also accounted in large part for the rise in wage
levels during the 8 years following the outbreak of
the war—adjustments in minimum wage rates
and in the wage scales of categories of workers
whose rates were “abnormally low,” and adjust
ments to ehminate area differentials. Between
May 1946 and February 1947, these special ad
justments were particularly numerous; the Minis
ter of Labor estimated that they affected more
than half of the 1.4 million manual and pro
fessional workers in the country.
Owing to the discontinuance of the Belgian
cost-of-living index early in World War II, the
only material available for estimating the pur
chasing power of wages during virtually all of the
subsequent period is an unweighted index of
official retail prices. In September 1944, when
the Belgian Government returned from exile, the
buying power of wages (measured by official in
dexes) was approximately half of what it had been
in 1936-38. Following the liberation, wage levels
improved substantially and in December 1946
real wages were about 96 percent of the 1936-38
average; at that time the official wage index was
320 and the official unweighted retail price index
333 (1936-38=100).
Prices continued to rise and by December 1947
were approximately 9 percent above December
1946 levels. Average earnings also rose, but fig
ures are not available to show the extent of the
31
32
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
rise and therefore the relationship between wages
and official prices during 1947 cannot be deter
mined. For example, effective January 12, 1947,
the earnings of coal-mine workers were increased
6.8 percent; an increase in family allowances be
came effective in July 1947; double pay was
authorized for all vacations taken during the
year; other adjustments were authorized for
special categories of workers.
Use of the official wage and price indexes leads
to an overestimation of the value of real wages in
December 1946 because both indexes fail to in
clude all elements essential to such a determination.
Labor organizations have maintained that the
official wage index for 10 industries is based
primarily on earnings in industries which have
been accorded exceptionally favorable treatment
with respect to wage increases; and that, therefore,
the increase shown is not representative. In the
coal industry, which has the highest index among
those shown, wage increases have been exception
ally large to make up for low prewar wage levels
and to induce workers to enter the industry during
a period of labor shortage. Wage indexes3 pre
pared in November 1946 by the Conference of
Christian Unions were at considerably lower levels
than those compiled by the Ministry of Economic
Affairs for December 1946.
W a g e in d exes
(1 9 8 6 -8 8 = 1 0 0 ),
N o v e m b er 1946
Highly skilled workers________________
Skilled workers_______________________
Laborers____________________________
270
284
281
According to the Ministry of Economic Affairs,
the official price index does not fully reflect the
effective price level, because prices actually charged
often exceeded the legal prices upon which the
index is based. Labor leaders have claimed that
at the end of 1946 the consumption level of workers
was actually as much as 16 or 20 percent below
prewar. Notwithstanding that official food prices
were fairly well stabilized, according to the In
stitute of Economic and Social Research (Catholic
University of Louvain), the buying power of
wages in 1942, as applied to a “normal” daily
ration of 2,565 calories per person, dropped to less
than a third of 1940 levels; even at the close of
1946, half of the calorie requirements for a daily
ration were still obtainable only on the black1
1 No information is available with respect to the manner in which these
data were compiled.
market, where the prices of basic foods were over
6 times 1936-38 prices.4
By the end of 1947, the franc had been stabilized,
production had improved, and supplies of most
categories of consumers’ goods were available in
much larger quantities than at any other period
since 1939. Only a few products were rationed,
mainly basic foodstuffs such as bread, sugar,
meat, and fats. Food supplies were sufficiently
improved to allow for increased rations, and food
consumption had reached 2,700 calories per person
a day—only slightly less than the prewar level of
2,900 calories. Coal, also in short supply, was
rationed for domestic heating. Clothing and
other consumer goods were available in reasonable
quantity and variety.
Wage Level in 1946
The National Office of Social Security has issued
for the first quarter of 1946 the average hourly
earnings of Belgian wage earners subject to socialsecurity laws—the latest wage data available (see
table).
The averages indicate that women in the major
industry groups (except transportation, 70.3 per
cent, and hotels and personal service, 64.7 percent)
earned less than 60 percent as much as men—a
much greater postwar differential than existed in
other countries covered by this series of articles.
National minimum rates for workers 21 years of
age and over had been fixed in September 1945 at
7.20 francs an hour for women, 9.60 francs for
male laborers, and 12 francs for skilled male
workers. (These rates were increased in August
1946 to 9, 12, and 15 francs, respectively.) I t is
obvious from the table that the average earnings of
women were in almost all instances lower than the
9.60-franc minimum for male laborers and in some
cases even lower than the minimum for women.
Wage and Price Policies
Except for 1887 legislation, specifying the place
and time at which wages should be paid and a 1934
law regulating minimum wages for home work,
Belgium had no wage legislation before World
War II. Minimum wage rates were established
as a general rule by collective bargaining through
the joint industrial councils {commissions paritaires), without governmental intervention.
< Based on prices of 1 kilogram of flour, 2 kilograms of potatoes 250 grams
of butter,,250gramsjrf meat, and 100 grams of bacon.
BELGIUM: WAGE TRENDS AND POLICIES
Belgium: Average hourly earnings of wage earners, by sex and
industry group, first quarter, 1946
Group
Average hourly
earnings, (in
francsl)
Men Women
Industry, total_ ...
.........
Extractive Industries. ___ ___
T
Quarrying and other construction materials_____
Mining. ................................. .................................
Manufacturing Industries
... ___ _ ___ _
Tobacco.
___ ... ... __
_
___
Foods.. .
_
_.
Clothing___
,. ...
_ __ _
B e v e r a g e s ....
Textiles. ______ __
Wood and furniture,.
.
, - - .
Hides and leather. ...
Paper
__ _T , __
Ceramics and glassware ..... ...
Chemicals, not otherwise specified
_ _ ___
Rubber _ , . .. r
. . . . __
______
Metal manufacturing, not otherwise specified
(common metals)__ _______________________
Oils, animal and vegetable fats, and margarine
products . _ . _
. . . . . . . ___ .
Sheet metal, metal castings, forging, wire_______
Production and distribution of electricity, gas and
heat, water service.- ___ ___________________
Machinery manufacturing, including electrical
apparatus, vehicles, vessels, and aircraft _ _
Printing and photography_____ ___ ___
Products of coal and petroleum..
Art and precision work. __ _
Industries, not otherwise specified
_ _ . _
Industries inadequately designated. __
Building and construction________________________
Transportation . r._
..
... .
Commerce . , ,. r.. .
,.
„ _
Credit (finance, banking, insurance) . . T
Trade (retail and wholesale! _
__
...
Hotels and personal services___ _ __
Miscellaneous
__ .
Personnel in professional services
...
Public services.
Horticulture and fnrestrv....
_
. . . . . . . . __
Fishing _____ ____ _
_ . ___
14.40
14.20
14.10
14.55
14.30
11.70
12.20
12.95
13.00
13.15
13.25
13.25
13.40
13.70
14.00
14.00
8.45
7.45
7.05
0.75
8.45
7.95
7.05
7.90
7.85
8.80
7.75
8.55
8.25
7.45
7.90
8.30
14.15
8.40
14.20
14.75
7.75
8.75
15.00
0.50
15.50
15.55
15.95
20.05
14.20
14.15
13.90
10.00
13.20
10.15
13.25
12.45
14.35
11.45
11.00
11.85
03.75
9.00
7.90
7.70
19.70
8.20
7.70
8.00
11.25
7.90
7.20
7.85
8.05
7.10
6.50
0.05
7.05
* In March 1940, 1 Belgian franc was equivalent to 2.28 cents in United
8tates currency. Comparisons of wages between countries are difficult be
cause foreign exchange rates do not truly reflect international differences in
living costs and because of the lack of information on relative productivity
by industry in different countries. In general, differences in productivity
markedly favor the United States.
Source: Belgian Ministry of Labor and Social Security, Bevue du Travail,
January 1947 (pp. 21-22).
The Nazi occupation authorities created a
Prices and Wages Commissariat under the Minis
try of Labor and Social Welfare, with authority
to fix prices as well as wages. Prices rose con
siderably faster than wages, however, and the
discrepancy between wage levels and actual living
costs was partially offset by the occupation author
ities through allowances and bonuses, such as
attendance and loyalty bonuses paid to under
ground miners, and by employers through supple
ments (equivalent to approximately 20 percent of
money wages) granted in the form of meal dis
tributions and allotments to factory employees,
ostensibly for “personal use” but actually for sale.
When the Belgian Government returned in
September 1944 following the liberation, it found
an industrial plant comparatively little impaired
by the war, but a monetary circulation which had
33
more than trebled and a wage-price relationship
which was seriously out of balance. The Govern
ment's reconstruction program was directed to
ward a drastic contraction of currency and bank
credit, the maintenance of the existing wage level,
insofar as possible, and the adjustment of prices to
the wage level. Increased production under
private enterprise was relied upon for the rehabili
tation of the national economy. It proved to be
impossible to reduce prices to meet the existing
wage levels, and the increases mentioned above
were therefore authorized.
The Government's policy concerning the rates
paid to wage earners was determined primarily by
the National Labor Conference, which was con
vened by the Government and composed of repre
sentatives of employers and of union organizations.
The Conference had met first in 1939, and was
resumed after liberation in September 1944.
Many of its decisions, after being reviewed by the
Government Price Regulation Board and by the
Minister of Labor, were made effective by decree.
Adjustments for salaried workers usually followed
the pattern of adjustments set by the Conference
for wage earners.
Notwithstanding the constant postwar pressure
for higher wages to compensate for rising prices,
the Government's wage policies were generally
supported by a wide variety of persons and in
terests, including labor leaders who were alive to
the danger of precipitating a wage-price spiral like
that which had followed World War I. Conse
quently, on more than one occasion, demands for
general wage increases presented to the Conference
were either modified or withdrawn in favor of
adjustments for special categories of workers; or
in return for the Government's agreement to cut
prices, to increase social-security benefits, and to
promote other programs designed to relieve the
pressure of high living costs.
An important factor lessening the pressure for
wage increases was the strengthening of the nation
al social-security program. Comprehensive socialsecurity legislation affecting over 1.2 million wage
earners and salaried workers whose employment
was regulated by collective agreement was first
introduced by Legislative Order of December 28,
1944.6 By 1947, adjustments in line with higher
wages and increased living costs had been author
ized in old age, survivors', and invalids' pensions,
* See Monthly Labor Review, July 1945 (p. 07)*
84
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
and in unemployment benefits; a system of
compulsory sickness and invalidity insurance had
been established; coverage under the socialsecurity legislation enacted in 1944 had been ex
tended to workers in agriculture and to other
groups.
Reduced living costs were basic to the success of
the Government’s reconstruction policy: in the
winter of 1944-45, the Government initiated a
program which included stabilizing the prices of
foods and other commodities, controlling rents, and
subsidizing the prices of coal and certain basic
foods. Until the spring of 1946, however, its
efforts to reduce prices were largely ineffective,
partly because of the broad scope of the program,
and partly because of transportation difficulties
and continuing scarcities in both manpower and
goods. Even though the official prices of rationed
foods were fairly well maintained, prices of other
commodities continued high in relation to wages.
This difference was offset to some extent through a
national reequipment fund (Fond National d’Aide
au Beequipement Manager), which was established
by legislative order on November 15, 1945. The
fund was maintained by employers and consti
tuted a wage payment in kind, in that it supplied
clothing and household equipment in exchange for
vouchers issued to all workers covered by the
social-security regulations or entitled to unem
ployment benefits.® Distribution of goods was
still being made in 1947, and the benefits had been
extended to other categories of workers.
In the spring of 1946, the Government renewed
its price reduction program. A 10-percent reduc
tion was decreed in the prices of consumer goods
and certain public services; priorities were estab
lished for sellers who lowered prices by more than
this amount; and penalties for failure to comply
with these regulations were increased. At the
end of 1946, the price level was substantially below
that prevailing in the winter of 1945-46. This im
provement in the price situation was largely
erased during 1947; world prices were rising and
by December 1947 a preliminary estimate showed
that Belgian retail prices were approaching the
levels of the winter of 1945-46.•
• See Monthly Labor Review, July 1945 (p. 31).
Prices and Wages
in the Austrian
Economy, 1938-47
I rving B. K ravis1
I n t h e p a l l o p 1947, Viennese wage and official
prices were both more than four times the prewar
level. The quantity of goods available at legal
prices has been extremely scarce in the postwar
period; the average daily calorie ration was far
below prewar levels. Consumer goods were more
freely available on the black market, but at greatly
inflated prices. Although legal prices had risen
and black-market prices declined since Austria's
liberation in April 1945, Viennese black-market
prices were 19 times legal prices for food necessities
in the fall of 1947.
Changes in money wages have reduced income
differentials between men and women workers and
between workers of various degrees of skill. The
leveling process in real incomes has been reen
forced by limited rations and by the low purchas
ing power of earnings on the black market. In
terms of actual purchasing power, average postwar
earnings have been below prewar levels.
The Austrian Economy
Austria, with a population of less than 7,000,000
and an area about the size of Maine, is unique in
certain respects. Its strategic location in the
center of Europe and the postwar occupation by
the United States, France, Great Britain, and the
Soviet Union have made Austria the meeting
ground of East and West.
The partial self-sufficiency which had been pains
» Of the Bureau’s Staff on Foreign Labor Conditions.
takingly developed between the two world wars
was submerged when the country was annexed
to the German war machine in 1938. The Nazis
diverted the Austrian economy from its peacetime
channels by reducing agricultural production and
increasing the output of oil, hydroelectric power,
and heavy industry. Unfavorable weather in the
postwar period hampered agricultural recovery and
reduced hydroelectric power output, thus making
existing fuel shortages more serious. In the late
summer of 1947, industrial output was estimated
by the United States Forces in Austria at roughly
45 percent of 1938 output.
The basic factors underlying the low rate of
production were:
(1) Shortages of Fuel, Raw Materials, and
Other Goods: Substantial foreign aid through
UNRRA, and by Great Britain and the United
States directly, was concentrated upon food
supplies, but raw materials were also included.
Lack of coal and other raw materials hindered
economic recovery and retarded exports.
(2) Manpower and Malnutrition: The low pro
ductivity of Austrian workers in the postwar
period was due partly to use of damaged plants
and outmoded equipment and partly to reduced
labor efficiency. Malnutrition undermined worker
efficiency (average caloric consumption of the
nonfann population in the first 7 months of 1947
averaged 1,535 calories) and much time was lost
in hunting for food.
(3) Zonal Divisions: The military occupation of
Austria by the four Allies hindered interzonal
trade. Because most heavy industries are in the
three western zones and most finishing industries
and over half of Austria's agricultural potential
are in the eastern (Soviet) Zone, the artificial
division between economically complementary
regions seriously handicapped recoveiy.
(4) Uncertainty About the Future: The scarcity
of goods and the plethora of money made a lack
of confidence in the Austrian schilling almost
inevitable. Although currency conversion in
December 1945 sharply reduced the volume of
currency, the issuance of bank notes to the
occupying powers and withdrawals from blocked
accounts restored circulation to the former level
before the end of 1946. A new currency reform
took place in November 1947.
Another important source of uncertainty has
35
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
36
been the Soviet claim to “ German external
assets” in Austria as reparations. This has been
a major issue delaying the Austrian peace treaty.
The United States, the United Kingdom, and
France, however, have maintained that property
acquired by the Germans through force or duress
should be returned to the rightful owners.
(5) War Damage and Removals: Large scale
wartime destruction of industrial plants, par
ticularly in the eastern part of Austria, was
followed by the removal from the Soviet Zone of
industrial equipment (especially from the chemical
and engineering industry) by the Russians.
Certain Austrian industries were left with depreci
ated and obsolete machinery which raised pro
duction costs in the postwar years.
AUSTRIA
U N ITE D S T A T E S DEPARTM ENT O F LABOR
BUREAU OF LABOR S T A T IS T IC S
Price Trends
Since the end of the war, the Austrian price
structure has been complicated by the existence
side by side of a sector of well-regulated consum
ers’ prices, a group of partially controlled rawmaterial and industrial-goods prices, and a large
sector of uncontrolled prices. In addition, blackmarket transactions in goods and foreign currencies
have been an important factor in the situation.
Because of these differences, it is extremely diffi
cult to form reliable estimates of the changes in
the price level.
Measurement of the cost of living in the postwar
period has been complicated because many of the
items for which prices are required are either not
available or may be bought only at above-ceiling
prices. For example, furniture and household
• TH E C EN TR A L D I S T R I C T OF V IE N N A IS J O IN T L Y
OCCUPIED BY T H E FOUR PO W ER S.
utensils were virtually impossible to obtain at any
price. Clothing could be purchased only on the
black market at prices far out of reach of low- and
middle-income groups.
The official cost-of-living index of the Central
Statistical Office tended to reflect only the legal
prices of a limited number of consumer goods for
which price controls and ration measures had been
relatively successful. I t included only a very
limited group of foods and no household goods.
Very few items in the other groups were included
and the method of computation gave a distorted
picture of actual changes in consumers, prices;
for example, the clothing component included
men’s suits at April 1938 prices for many months
after the liberation, even though suits were not
available at legal prices. In May 1947, a more
realistic method of measuring clothing prices was
PRICES AND WAGES IN AUSTRIA
introduced, which caused a 50-percent rise in the
clothing index. The group of prices measured by
the official index increased 5 percent during the 7
years of German control and 69 percent in the 2
years following liberation (table 1).
T able 1.—Price changes in Austria, selected periods,
1988-47
[April 1938*100]
Year and month
Ratio black
market to
Cost of living, Vien
legal food
Official
nese family of 4
Whole
prices in
sale
costpersons *
Vienna *
of-liv
food
price
ing in
index
dex in
in Aus
Indexes
Aus Schil
Neces Other tria!
tria i
lings
sities
per
week Total Food
2 100.0
1 9 3 *? A p r i l
1044: A p r il _
1945* A p r il
100.0
105.4
105.0
41.70
52.82
53.11
100.0
126.7
127.1
100.0
125.8
127.1
<264
<124
1946: April..............
June_______
December___
135.8
137.7
161.4
60.23
60.36
76.34
144.4
144.7
183.1
143.1
142.6
188.6
168
148
43
21
10
4
194.7
1947: January.........
February.......
March............
April..............
May...............
165.7
175.3
177.0
177.7
202.1
77.24
82.01
88.26
89.62
100.05
185.2
196.7
211.7
214.9
239.9
190.7
191.2
198.2
201.0
209.1
44
40
37
37
36
4
3
3
4
3
194.8
196.4
196.4
198.2
198.2
June...............
July...............
August..........
September.. .
October.........
202.3
275.8
100.42
138.37
159.35
181.13
185.46
240.8
331.8
382.1
434.4
444.8
209.4
349.8
409.4
423.9
424.3
33
19
18
19
19
4
3
2
3
3
198.2
285.8
357.6
432.9
422.2
of the black market will be impossible without
large increases in available supplies or in legal
prices.
Based on August 1945 as 100, the index for
black-market food prices in Vienna declined from
76 in April 1946 to 22 in March 1947 and rose to
26 by August. The downward trend in blackmarket prices has been attributed to several cir
cumstances. Domestic agricultural production
and foreign relief increased supplies. At the same
time, effective demand was curtailed as workers,
whose current wages were low compared with
black-market prices, exhausted the savings of
money and possessions which enabled them to
supplement meager rations with black-market
purchases. The decline in black-market prices
and the rise in legal prices has, of course, greatly
narrowed the gap between the two. Nevertheless,
the spread remained substantial; in August 1947,
Viennese average black-market prices for necessary
foods such as flour, bread, beef, and eggs were
about 18 times the legal prices; black-market
prices for tobacco, tea, coffee, etc., were double
the legal prices.
T able 2,—Legal and black-market prices in Vienna9
selected periods 1945-47
i Computed by the Austrian Central Statistical Office.
’ Data of the Austrian Institute for Economic Research.
* March.
*August.
Another cost-of-living index, computed by the
Austrian Institute for Economic Research, refers
to a working class family of four persons in Vienna.
I t also measures changes in controlled prices but
is broader in commodity coverage than the official
index. I t increased by 28 percent between April
1938 and April 1945, and 68 percent in the next
2 years. By September 1947, this index was
4.4 times its April 1938 level.
A similar increase (4.3 times from March 1938
to September 1947) occurred in the wholesale food
price index of the Central Statistical Office.
An indeterminate portion of the goods available
in Austria has been diverted to the black market
(see table 2.) Many goods which could scarcely
be purchased with ration coupons could be found
on the black market. Early in 1947, for example,
shoes of all sizes and types could be purchased at
prices ranging from 300 to 1,200 schillings and
coats were available for 800 to 1,200 schillings.
Frequent arrests may have reduced the volume of
transactions and influenced prices, but elimination
87
[In schillings]
Legal price
Commodity
Flour, white.
Bread, dark.. ......................do___
Beef............... ..................... d o ....
Pork.............. ..................... dO-_.
Bacon............ ..................... d o ....
___ do
Lard_______
Sugar............. ..................... d o ....
E g g s______
Milk
_ __ ... lifer 1
Wine............. .....................d o ....
Cigarettes__ ..................... each..
Black-market price
Dec. July June
1945 1946 1947
Dec.
1945
July
1946
0.48
.34
1.80
2.50
2.16
2.16
.78
.15
.50
4.00
.08
45.0
25.0
50.0
200.0
800.0
80.0
55.0
30.0
85.0
175.0
250.0
325.0
160.0
40.0
3.5
70.0
1.7
0.56
.34
1.80
2.60
2.16
2.16
.76
4.00
.06
0.76
3.20
3.20
2.16
1.80
.26
.50
8.00
June
1947
30.0
8.0
47.5
105.0
135.0
150.0
120.0
3.5
5.5
35.0
1.6
i Kilogram*2.2 pounds. Liter* 1.06 quarts.
Source: Austrian Federal Ministry of Food. Figures taken from Report
of the United States High Commissioner, Military Government, Austria
(various issues).
Black-market food prices in Vienna generally
exceeded those in the Provinces, with the exception
of those in Burgenland (Soviet Zone) which were
higher than in Vienna. Illegal food prices in the
Province of Vorarlberg (French Zone) were the
lowest in Austria,2 fluctuating, around a level about
two-thirds of Viennese prices.
The disparity between Austrian internal prices
* No data were available for the Province of Lower Austria in the Soviet
Zone.
38
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
and relatively high world prices has also compli
cated the price situation. At the beginning of
1947, Austrian commodity prices, when converted
at the official exchange rate of 10 schillings to
$1 United States currency, were estimated to be
40 percent of world prices. The difference between
prices obtainable in legal domestic markets and
export prices encouraged producers to sell their
goods abroad rather than at home. The disparity
between Austrian and foreign prices seriously
affected the Austrian price structure also because
imports, upon which the Austrian economy de
pends for raw materials, often cost four to eight
times the prewar prices in Austrian schillings.
Wage Trends
The indexes in table 3 seem to indicate that
changes in workers* money income kept pace with
the increases in official prices as measured by the
cost-of-living indexes.
In August 1947 weekly earnings averaged 125
schillings, according to computations of the Cen
tral Statistical Office based on decisions of the
Central Wage Commission; the corresponding
figure for December 1946 was 56 schillings.
Average weekly earnings are shown below, by
sex and skill, for August 1947 and December 1946:
Average weekly earnings (in shillings)
Men
Women
Aug,
Dee,
Aug,
1947
1946
1947
Dee,
1946
Average1________
Skilled__________
Semiskilled......... ..
Unskilled________
62
69
59
50
133
143
132
115
46
51
48
41
108
124
113
97
* December 1946 data based on 669 occupations (lohnpositionen); August
1947 on 811.
Source: Statistiche Nachrichten, January and September 1947.
These data indicate that weekly earnings for
women, which generally were 30 percent or more
below those of men before the war, were lower
than men’s by roughly 25 percent in December
1946 and by 20 percent in August 1947. The
tendency toward narrowing the spread between
men’s and women’s earnings is also revealed by the
indexes in table 3 which show greater than
average increases in income and earnings for
women workers.
Differentials between the earnings of skilled
and unskilled workers were less in the fall of 1947
than before the war. The postwar tendency to
increase semiskilled and unskilled rates more than
skilled is evident in tables 3 and 4.
No data are available concerning changes in
regional wage differentials. Before the war, weekly
wages in Vienna were approximately 15 percent
above those of Carinthia,3 the province with the
lowest wages.
T able 3.—Indexes of workers’ net income and net hourly
earnings in Vienna, selected periods 1988-47
Net income (August 1938*100) 1
Date
August__ ____ __
________
Decemher _ _ __ __
April....................................................
April....................................................
April_________________________
June.
_
December
... _ _ . _ _
.
_
1047: January _ _ __ __ _
_
February
_
_
_ , _
March__ __ ___ _ ___ ____
April
_
May
_
_
_
___
June _
.......... ................ _ . ........
•Tnlv
.
__
__
August__ _
.
__
September . _
1038:
1040:
1944:
1946:
1046:
Total
Skilled
work
ers
100.0
110.2
111.7
100.0
112.6
120.5
(8)
120.3
(8)
174.4
160.3
166.6
170.3
180.4
197.4
225.6
246.1
312.5
366.5
(8)
122.9
(8)
169.5
155.5
157.1
169.3
176.6
190.8
210.7
230.4
279.8
328.0
Help Women
work
ers
ers
100.0
102.4
97.2
(8)
102.1
(8)
159.9
174.2
176.9
171.6
185.3
198.0
228.0
250.2
299.5
366.8
100.0
112.5
108.7
(8)
130.3
(8)
193.6
157.2
173.4
171.0
182.7
207.6
247.5
267.9
374.5
423.9
Net hourly earnings (April
1945*100) *
1938: August________________________
1940: December__________ ___ _______
1044: April
_ ___ _ _ _____
1046: April
...
.
_ __
1046: April.
June.. __
_
_
_____ _
December
_
__ _
1047: January
_ _ _
__
February
_
_
_
.......
M arch____
April..... _ _ _ _ _
_ .
May......................... ..........................
June. _ _
_ _
July
. ______
_____ _
August _
_ _
September,
October _ ,_
_ _ _ _ _ _
(8)
(3)
(s)
100.0
114.7
119.5
168.6
163.8
163.9
163.9
174.1
180.0
204.3
209.5
305.8
305.1
305.1
( ,)
(8)
(*)
100.0
113.2
117.3
151.5
151.7
151.7
151.7
160.1
165.0
185.9
191.5
271.7
270.7
207.7
(8)
(3 )
(3)
100.0
138.3
143.0
198.0
195.1
195.3
195.3
204.6
206.4
240.0
246.7
366.1
365.1
365.1
(»)
(3)
(8)
100.0
98.0
105.1
139.5
158.9
159.0
159.0
173.1
183.6
206.1
209.3
313.7
313.7
313.7
i Figures for 1938 are based on the investigations of the German Labor
Front; for 1940 and 1944, on studies of the German Statistical Office; for
April 1946, on investigation of the Vienna Chamber of Labor; and since
October 1946 on studies of the Austrian Institute for Economic Research.
The figures relate to married men with two children and are weighted accord
ing to 1939 employment. From June 1947 on, the figures were computed on
a different basis and are not directly comparable with the preceding index
numbers.
* Based on average hourly earnings for a 48-hour week for a married man
with two children after the deduction of taxes, social security payments,
and trade-union dues. The indexes are weighted according to the occupa
tional distribution of employment in 1939.
* Not available.
Source: Monatsberichte Des Osterreichischen Institutes fur Wirtschaftsforschung, (Monthly Reports of Austrian Institute for Economic Research).
No. 10, Oct. 30,1947, p. 248.
In the postwar period, time rates prevailed ex
cept in establishments taken over by the Soviet
Union as German assets, in which piece-rate pay
ments were introduced.
In terms of actual purchasing power, however,
wages in postwar Austria have been below prewar
« Estimated on the basis of data in Statistisches JahrbuchfurOsterreich,
1938, p. 176.
PRICES AND WAGES IN AUSTRIA
levels. Before the war, wages of skilled workers
were generally more than sufficient to purchase
the goods and services in the consumption pattern
upon which the Institute for Economic Research
bases its cost-of-living index, and wages of un
skilled workers in a few industries were almost
sufficient to attain this living standard. The
figures on average weekly earnings in December
1946 and August 1947, given above, indicate that
at these postwar dates even the skilled worker did
not earn enough to purchase—at legal prices—the
goods and services in this consumption pattern
(see table 1).
Moreover, goods were freely available at uni
form prices before the war. In the postwar period
only rationed quantities of certain goods have
been available at legal prices. The greater amounts
available on the black market have been beyond
the means of the average worker. (See blackmarket prices in table 2.) Therefore, the actual
level of living of the Austrian workers has de
pended largely upon the size and availability of
official rations. In some cases, however, employ
ers and works councils were able to increase food
allotments beyond official rations by trading plant
output for food. The scarcity of goods at legal
prices and the high black-market prices have re
duced differences in real incomes between re
cipients of high and low money incomes much
more drastically than did the narrowing of differ
entials in money earnings.
Price and Wage Policy, 1938-47
German Occupation. When Austria was incor
porated in the Greater Reich in 1938, its currency
was converted to German currency at the rate of
1 reichsmark for 1% schillings. This measure was
unsuccessful in bringing the Austrian price struc
ture into complete conformity with that of Ger
many. Higher costs in Austrian industry because
of inferior mechanization and higher costs in
agriculture because of inferior natural conditions
made the introduction of subsidies necessary.
The German system of price control was, of
course, applied to Austria. This system included
several types of price regulations: (1) Some prices
were frozen as of October 17, 1936. (2) Certain
prices were set by specific decrees on a national,
regional, or industrial basis. Prices formerly
determined by cartels were still managed within
the cartel system and sometimes these included
minimum as well as maximum prices. Geographic
or industrial differences in costs were often made
up by subsidies which consisted of direct or indirect
grants from the low-cost to the high-cost producers.
(3) The cost-plus principle was applied only in
special cases, the general market price being used
even in most governmental purchasing.
It is difficult to estimate the movement of prices
during the German occupation. As already
stated, between April 1938 and April 1945 the
official cost-of-living index rose about 5 percent
and that of the Institute for Economic Research
by about 28 percent. It is clear, however, that
the Austrian price structure existing at the time
of the German exodus was adapted to Germany’s
wartime needs and not to peacetime requirements.
Because of the system of subsidies and the cartel
ization of Austrian industry, prices bore little
relation to costs.
Wage control was under the jurisdiction of
Labor Trustees representing the Reich Minister
of Labor. After September 1939, the Labor
Trustee in each district (Gau) was empowered to
fix compulsory maximum limits for wages, salaries,
and other working conditions. The aim of
German policy was to freeze wages at the 1933
level.
Both price and wage controls in Austria were
circumvented; the former chiefly through the
deterioration in the quality of output and the
latter through such devices as reclassification of
jobs into higher wage categories, rapid promotions,
premiums for punctuality, etc.
Liberation to June 1946. Despite the imbalances
left by the Germans, the Allied authorities main
tained the system of price-wage stabilization in
order to prevent confusion and violent disturbances
after liberation in April 1945.
The German wage scales were continued by
the Military Government wage freeze orders in
the United States, British, and French Zones and
by the Austrian Minister of Social Administration
in the Russian Zone. Workers and trade-unions,
remembering the inflation following World War I,
cooperated with the military authorities in main
taining the wage freeze.
The Allies agreed to permit collective bargain
ing regarding wages, horns, and working condi
tions but declared that changes in wages were to
be controlled by an Inter-Allied Wage Board
40
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
consisting of the chief labor officers of the four
occupying powers. Allied wage policy consisted
mainly in avoiding wage increases that would
lead to price increases; wages, however, were to
be sufficient to cover all essential and compulsory
expenses. Wage changes were to be confined
mainly to hardship cases and to equalization
within industries and occupations.
In the spring of 1946, the Allied Commission ap
proved an Austrian law providing for the transfer
of control of wage rates from the German-estab
lished Labor Trustee to the Austrian Ministry for
Social Administration. A Central Wage Com
mission, composed of Government, employer,
and employee representatives, heard claims for
wage increases filed by individual workers or
employers, or by their organizations at local
employment offices (Landarbeitsamt). The InterAllied Wage Control Board reviewed the recom
mendations of the Central Wage Commission.
Analysis of the claims for wage increases
showed that prevailing wage rates were above the
legal scales. To the Nazi Labor Trustee's count
less exceptions for groups, industries, and individ
uals, the Austrians had added modifications,
legal and otherwise. In addition, the claims
revealed serious inadequacies and lack of standards
in wages for younger workers, in the opinion of the
United States element of the Allied Commission.
Marked sex and age differentials were based on
traditional practices and not on output; and wage
relationships for apprentices, auxiliaries, and
juvenile workers were confused.
In the German wage structure, pay was rela
tively high for munitions workers. In postwar
Austria relatively low construction wages were
raised to promote reconstruction.
Prices also were frozen at April 1945 levels by
military order. Maintenance of these “stop”
prices (often below costs) depended upon subsi
dies which the Austrian Government was unwilling
to pay.
Under Allied pressure, the Austrian Government
developed general criteria for granting price in
creases. These increases were to be allowed so as
to limit profits, taking into consideration interest
on capital, previous earnings, etc. Higher prices
were to be granted for the most urgently needed
materials, such as coal and construction materials.
Higher freight rates, raw material cost, low worker
productivity, and a general trend toward increas
ing wages were raising production costs. The
criteria proposed by the Government prohibited
compensation for war damages by increased
prices; however some evidence exists that an effort
was made to finance rehabilitation through high
profits.
Thus, the Austrian Government's wage-price
policy in the year immediately following the
liberation provided for (1) wage stabilization ex
cept for increases in special cases, (2) price in
creases where necessary to meet higher costs of
production, and (3) the elimination of subsidies
and compensatory price increases.
By early summer of 1946, low wages and
mounting prices were creating labor unrest in
Vienna. The first potentially serious strikes since
liberation took place in June. Short-lived un
authorized strikes occurred in the printing trades,
street cars and railways, metal trades, and leather,
shoe, and clothing factories. The critical food
problem precipitated the strikes; the Austrian
Food Ministry had announced that the basic
ration for normal consumers, reduced from 1,550
to 1,200 calories daily in the early spring of 1946,
might drop to 700. An allied commitment to
keep the ration at 1,200 calories allayed the
unrest.
The New Control Agreement. At the end of
June 1946, a new control agreement for Austria
was signed, whereby the authority of the Austrian
Government was greatly extended particularly
with respect to price and wage controls. The
Austrian Government was required, however, to
inform the Allied authorities of proposed changes
7 to 10 working days before they were to become
effective. The Allied Commission could veto
such changes by unanimous agreement of the four
powers. For all practical purposes, the June 1946
agreement marked the end of Allied control over
prices and wages in Austria. The price-fixing
organization under the Ministry of the Interior
and the Central Wage Board under the Ministry
of Social Administration were given authority
over prices and wages, respectively.
The Central Wage Commission's task was com
plicated by the willingness of employers to grant
wage increases which could be offset by higher
prices. Between April 1946, when the Commis
sion began to function, and the latter part of July
1947, it had acted upon nearly 2,600 applications
PRICES AND WAGES IN AUSTRIA
for wage increases. Almost three-fourths of the
working population received wage increases in
this period. The increases were generally greater
for unskilled than for skilled workers, and higher
in Vienna than in the Provinces. Between April
1945 and July 1947, the average increases in 6
41
industries (see table 4) ranged from 46 percent
for skilled textile workers in the Provinces to 144
percent for unskilled building-trades workers in
Vienna. The Commission made an effort to
avoid unreasonable differentials in wages between
various occupations.
T able 4.—Hourly uoge rates for adult males in certain industries, Vienna and provinces, April 1945 and July 1947
[In reichsmarks or schillings]1
Provinces
Vienna
Group
Building:
Skilled.........................................
Semiskilled_______ _________
Unskilled............................. ......
Coal mining:
Skilled.........................................
S e m i s k i l l e d _ __ __ _ _ _
Unskilled _ _
Iron and metal:
Skilled.........................................
_
Semiskilled __
Unskilled
_
_
r __
Sawmilling:
Skilled .......................................
Semiskilled __
. _ _. _ _
Unskilled
Textile:2
Skilled........................................
Semiskilled
Unskilled
Woodworking:
Skilled.........................................
Semiskilled
Unskilled _
April 1945
April 1945
Average
Maxi percent Mini Maxi
mum increase mum mum
Mini
mum
0.82
.75
.67
1.40
1.10
1.00
1.70
1.60
1.20
2.15
2.00
1.73
73 1Burgenland, Carinthia, Lower
96 > Austria, Salzburg, Styria, Tyrol,
76 ] Upper Austria, Vorarlberg.
.93
.87
.67
1.09
.93
.87
1.91
1.75
1.57
2.52
1.91
1.75
119
103 1Burgenland, Lower Austria, Sty116 | ria, Upper Austria, Vorarlberg.
July 1947
Mini
mum
Maxi
mum
Mini
mum
1.15
.95
.75
1.60
1.30
1.00
2.63
2.31
2.16
2.75
2.48
2.16
96
113
144
July 1947
Aver-
percent
Maxi increase
mum
Areas covered
| Carinthia, Salzburg, Styria, Tyrol,
1 U p p er A u str ia , Vorarlberg.
| Rates in Burgenland and Lower
J Austria as Vienna.
1.10
.89
.76
1.50
1.10
.89
1.70
1.50
1.40
2.75
2.00
1.95
71
75
104
.88
.77
.55
1.50
1.10
.89
1.15
1.00
.85
2.75
2.00
1.95
.85
.75
.70
.85
.75
.70
1.95
1.78
1.68
2.10
1.78
1.68
139
137
140
.85
.75
.70
.85
.75
.70
1.95
1.78
1.68
2.10
1.78
1.68
.75
.65
.55
1.10
.80
.70
1.12
.94
.85
1.75
1.40
1.25
55
62
69
.75
.65
.55
1.10
.80
.70
1.12
.90
.75
1.67
1.33
1.10
46 1Burgenland, Carinthia, Lower
55 [• Austria, Styria, Salzburg, Tyrol,
48 j Upper Austria, Vorarlberg.
1.30
1.00
.90
1.30
1.10
1.00
1.92
1.92
1.80
2.52
1.92
1.80
71
83
90
1.30
1.00
.90
1.30
1.10
1.00
1.92
1.92
1.80
2.52
1.92
1.80
71 1
83 >A11 Austria.
90
64
61
94
139 1
137 IAll Austria.
140
i The official rate of exchange: 1 schilling equals 10 United States cents.
* The rates in the textile industry, employing female labor chiefly, apply
to both male and female workers.
Source: Monthly Bulletin of Austrian Statistics, No. 12, July 1947. Economic Division, Allied Commission for Austria, British Element,
The price control agency of the Austrian Gov
ernment was operated with less personnel and had
a weaker structure than the German price-control
administration. The only general price authority
was the Department of Price Formation and
Supervision in the Ministry of the Interior. This
department, which was composed of 7 officials in
mid-1947, referred applications for price increase
to the price specialists of the various ministries
(i. e., agriculture, food, trade, power, etc.). Al
though the department could make a decision, the
specialists could appeal to their respective minis
ters in cases of disagreement. Applications of
major scope went directly to the ministries which
usually pressed for a favorable decision before an
ad hoc council of ministers. This price formation
machinery prevented the development of a general
price policy and left price increases to the bargain
ing of pressure groups and their representatives in
the Government.
For enforcement, the Department of Price
Formation and Supervision relied on the police
authorities of Vienna and the Provinces. In mid1947, about 120 police officials in Vienna were
assigned to price control work on a part-time
basis compared with about 600 under the Germans.
The penalties for price violations were also reduced
after liberation.
Between the signing of the new control agree
ment and the adoption of an interim wage-price
stabilization program in August 1947, price and
wage indexes rose as follows:
Percent increase
Cost-of-living index of—
Central Statistical Office______________
Austrian Institute for Economic Research.
Net hourly earnings index_________________
88
114
62
The rise in the official cost-of-living index during
the first 6 months of 1947 was greater than the
increase between liberation and the end of 1946.
42
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
In addition to the disparity between the post
war wage and price levels, individual price and
wage relationships were distorted as compared
with prewar. In particular, the relatively smaller
increases in agricultural prices compared with the
rises in industrial prices caused difficulty.
Toward the middle of 1947, there was a growing
realization that the recent piecemeal increases in
wages and prices were only endangering the
country’s efforts to avoid inflation and that a basic
reform was needed. When it became evident
that the widely discussed second currency reform
would not be adopted, the pressure for a pricewage reform mounted.
Interim Wage-Price Stabilization. An interim
price-wage stabilization program was adopted in
August 1947 following an agreement by repre
sentatives of labor, agriculture, and commerce and
industry, approved by the Government. The
basic policy was wage and price stabilization at
approximately 300 percent of the April 1945
levels or 50 percent above the June 1947 levels.
Agricultural prices were to be raised about 50
percent above the levels prevailing at the end
of June 1947—10 percent in addition to the 40percent increase of July. Industrial price in
creases were to be self-administered by each firm
in accordance with a complex formula. Wage
increases varied from approximately 35 to 50 per
cent above previous levels, the increase being
greater for the lower paid workers. Income and
wage taxes on the increased pay were reduced to
about the same percentages as had been paid
on the lower incomes.
In actual operation this program encountered
certain difficulties. In mid-September, 6 weeks
after the inauguration of the price-wage agree
ment, the price situation was still not clear for
many key products; there were, for example, no
definite prices on textiles and shoes. Further
more, the actual increase in prices was greater
than anticipated. Although the aim of the pro
gram was to stabilize both prices and wages at 300
percent of April 1945 levels, by mid-October the
Austrian Institute of Economic Eesearch index of
living costs (legal prices) was 14.5 percent higher
than its index of net hourly earnings (both indexes
are on an April 1945 base).
The interim agreement, which expired at the
end of October, was followed by legislation pro
viding for the long discussed second currency
reform. Early in December the Allied Council
approved the law and there is no doubt that a
new phase in the development of the postwar
Austrian economy began.
Switzerland: Wage Trends and
Wage Policies, 1939-47 1
A v e r a g e h o u r l y e a r n i n g s of wage earners in
Swiss manufacturing and construction industries
increased by at least 75 percent between Junel939
and the third quarter of 1947. Prices, as meas
ured by official indexes rose 59.3 percent at retail
and about 117 percent at wholesale, during the
same period. Available data indicate that the
purchasing power of Swiss wage earners has risen
above the prewar level—limited, however, by a
few shortages of consumers’ goods.
Changes in the Swiss wage structure during the
war and postwar periods tended to reduce the
differentials in earnings between men and women
workers, adult and young workers, wage earners
in urban and rural areas, between workers in
various industries, and of skilled and unskilled
workers. Increased amounts paid as family
allowances have, however, tended to widen the
gap in earnings among workers on the basis of
marital status and number of dependent children.
Unlike most European countries, Switzerland
had not employed wage controls either during or
after World War II up to the beginning of 1948.
However, legislative measures taken in 1941
empowered the Government to extend wage
increases granted through collective bargaining
agreements to wage earners not covered by these
contracts. In moves designed to stabilize prices
and assure adequate distribution of war-reduced
supplies, control was exercised over prices and
supplies from the very beginning of the war;
rationing of important food products was still in
force as late as January 1948.
The inability to obtain needed imports and the
excessive inflow of gold and foreign exchange
during the war and postwar periods threatened
Switzerland’s relative wage-price stability. Most
export restrictions and currency limitations
adopted as counter-inflationary measures were
lifted after the war, as increased production else
where made imports available. Swiss industrial
employment rose to about 34 percent above the
prewar level by the end of 1947; and competitive
demands for scarce labor needed by industries
1 Prepared by Joseph Mintzes of the Bureau’s Staff on Foreign Labor
Conditions.
expanding to meet unprecedented world and
domestic demands led to a shift of workers from
lower to higher paying industries. The 1947
European production crisis was reflected in Swit
zerland by new inflationary pressures. In Feb
ruary 1948, the principal labor and employers’
organizations as well as other economic groups
adopted a voluntary stabilization program which
had been recommended by a Government-spon
sored anti-inflation conference late in 1947. This
program provides for maintenance of the level of
wages and prices prevailing at the beginning of
the year up to October 31, 1948.
Money Wages
Limited earnings data based on wages and costof-living allowances paid to workers in Swiss
manufacturing and construction industries which
were covered by labor-inspection laws (hereafter
referred to as series A 2) show that average hourly
earnings in the third quarter of 1947 were 74.6
above the January-August 1939 level (see table 1).
Increases in workers’ earnings were sharpest after
World War II ended; about 41 percent of the rise
occurred between VE-day (second quarter of 1945)
and the third quarter of 1947. However, these
data probably understate the actual extent of the
rise in earnings (1) because they exclude supple
mentary allowances other than those paid in con
nection with increases in the cost of living, and
(2) because these data are based on surveys limited
to firms covered by federal labor-inspection laws.
Such laws generally apply to the larger establish
ments, whereas increases in earnings have been
relatively greater in the lower-paying smaller
establishments.
Series C (table 2), based on more complete
earnings data as well as a broader survey of in
dustries than series A, shows an increase of 77.5
percent in average hourly earnings of wage earners
in Swiss industry, crafts, and commerce between
June 1939 and October 1946 (the latest date for
which the information is available). Projecting
the increase in series C to the third quarter of
1947, on the basis of the percentage rise recorded
by series A, indicates that the more limited series
(A) understates the extent of the increase in
5 In order to facilitate presentation of data, the various earnings series have
been designated by the capital letters A, B, and O in the order of appearance
in the accompanying tables.
43
44
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
average hourly earnings from 1939 to the third
quarter of 1947 by something like 15 percent.8
Indexes of weekly earnings based on the same
data as the hourly indexes in series A and series B
show the same percentage changes as the respec
tive indexes of hourly earnings. Average weekly
1.—Switzerland: Indexes of money and real hourly
earnings of wage earners, cost of living, and average num
ber of hours worked
T able
IJanuary-August 1939=100]
Indexes of—Period
Cost
of
liv
ing*
Aver
Average hour Average hour age
week
ly earnings
ly earnings
(Series A)*
(Series B)»
ly
hours4
Money Real Money Real
1939: January-August.......... 100.0
1940
..............— ........ 111.0
1941
........................... 128.2
1942
........................... 142.0
1943
.......................... 148.9
1944
........................... 152.0
100.0
103.4
112.1
122.8
131.8
138.3
1945: First quarter...............
Second quarter............
Third quarter..... ........
Fourth quarter...........
152.7
153.8
153.4
151.2
142.0
144.2
146.5
151.1
93.0
93.7 |l4 7 .8
95.5 }l53.4
99.9
96.6 /\
100.5 /\
47.5
47.6
47.8
47.6
1946: First quarter...............
Second quarter............
Third quarter..............
Fourth quarter...........
149.9
151.6
151.6
155.1
154.4
159 4
163.6
166.1
103.0 }l62.6
105.1
107.9 |l7 2 .6
107.1
107.8 /\
112.6 /\
47.8
47.9
48.0
47.8
1947: First quarter............... 153.3
Second quarter.____ 159.0
Third quarter.............. 159.3
Fourth quarter............
170.3
172.4
174.6
109.7 }l78.6
108.4
109.6
114.1 \/
47.9
47.9
47.9
100.0
93.2
87.5
86.5
88.5
91.0
100.0
102.6
110.6
122.3
132.8
141.3
100.0 46.8-47.7
47.3
93.0
86.9
47.0
46.8
86.4
47.1
89.4
47.3
93.1
1 Represents the movement of prices paid by wage earners and clerical
workers for commonly purchased items which are included in the index
components ol food, clothing, fuel-light, and rent. Official surveys have been
conducted in June of each year since 1940 on prices paid for miscellaneous
goods and services; although this component does not enter the index, official
adjustments which take account of these items indicate that the inclusion of
this component would not affect the index by more than 2 points during the
period under consideration. In June 1947, the difference was only 0.3 of
a point.
* Series A refers to wages and cost-of-living allowances of wage earners in
Swiss manufacturing and construction industries. These data are collected
in surveys of business activity and refer to payments in establishments cov
ered by Federal labor-inspection regulation. In 1947, these indexes were
based on information supplied by about 3,300 firms employing 242,000 wage
earners.
3 Series B represents the annual earnings converted to an hourly basis for
adult wage earners reporting accidents under the workmen’s compensation
regulations. These earnings include wages, cost of living allowances, and all
other payments except overtime pay. The index is computed by weighting
earnings data of reporting industries by the number of workers covered by
accident insurance for the years 1927 to 1936.
*The average number of hours worked refers to the same industries as series
A. For 1939 to 1941, inclusive, only percentage distributions according to
various workweeks were published in La Vie Economique; the averages here
presented for that period were computed from these distributions by the
international Labor Office. For 1942-44, the annual averages were computed
by the BLS from available quarterly averages.
Sources: La Vie Economique, November 1947, Supplement (p. 25); De
cember 1947 (p. 465); and various issues; published by the Federal Depart
ment of Public Economy, Berne, Switzerland; The International Labor
Review, June 1947 (p. 597), published by the international Labor Office,
Montreal.
« A third series of earnings statistics (series B in table 1) is based on all
earnings except overtime pay and refers to data submitted by adult workers
involved in accidents under workmen’s compensation regulations. Those
data have been included in table 1 for purposes of comparison with series A.
The rise in series B, limited by the nature of its source and coverage, would
indicate an increase of about 8 percent more than is noted in series A from
prewar to the third quarter of 1947.
hours worked in Swiss industry, crafts, and com
merce remained relatively constant during the
war and postwar periods for which data are avail
able—rising slightly from about 47 hours in 1939
to about 48 hours in 1947, according to official
statistics. The legal workweek for factories in
Switzerland has remained 48 hours, and the law
provides for time and a quarter for authorized
overtime; however, a 52-hour week without over
time pay may be permitted by the Government
in cases of emergency.
Incomes of salaried workers did not rise as
much as those of wage earners, during the war
and postwar periods. Average monthly salaries
of employees in Swiss industry, commerce, and
transportation rose 53.2 percent between June
1939 and October 1946. (Average hourly earn
ings of wage earners in the same industries rose
77.5 percent during this period, according to series
C.) Variations in the relative increases for
different groups of salaried workers in general fol
lowed the same trends as those noted below for
wage earners (i. e., in relation to sex, skill, indus
try, and location, etc.).
Beal Earnings
According to the official indexes of real earn
ings,4listed in table 1, average hourly real earnings
of Swiss wage earners had regained prewar levels
in the latter part of 1945 and early 1946, after
declining to 86.5 percent of the prewar average
in 1942. During the postwar boom period, hourly
real earnings rose sharply; series B showed that
real earnings in the first half of 1947 were 14.1
percent above the prewar level. Movements of
the more limited series A index, which covers only
wages and cost-of-living allowances, indicate a
general leveling of real earnings during 1947.
Indexes of average weekly real earnings moved in
the same fashion as those for hourly earnings dur
ing the periods considered.
Swiss wage earners’ purchasing power in general
has not been limited seriously during the postwar
period by shortages. With the exception of wheat
and coal, wage earners have been able to pur
chase most items in customary prewar quantities.
* See footnote 1 of table 1 on the cost-of-living index employed as a de
flator in computing the official real earnings indexes.
SWITZERLAND: WAGE TRENDS AND POLICIES
unskilled and semiskilled urban workers as a base:
Wage Structure Changes
Between June 1939 and October 1946, there
was a significant reduction in earnings differentials
in Switzerland between men and women, adults
and young workers, and between skilled and un
skilled or semiskilled workers. The following
summary of data from table 2 indicates that
gains in average hourly earnings of young workers
and women were the sharpest during this period—
rising 116.7 and 93.3 percent, respectively. In
dexes showing the relative changes in earnings for
the various categories covered in terms of average
hourly earnings of skilled men follow:
June 19S9 earnings
M en
S k illed
O thers
Hourly (in francs)______ 1. 55
Indexes (skilled m en=
100)................................. 100.0
W om en
Y o u th s
1. 18
0.75
0. 54
76. 1
48.4
34.8
2.04
1. 45
1. 17
82.6
58.7
47.4
72.9
93.3
116.7
October 1946 earnings
Hourly (in francs)______ 2.47
Indexes (skilled m en=
100)................................. 100.0
June 19S9~Odober 1946
Percent increase in earn
ings.......... ............... ....... 59.3
Earnings differentials among wage earners in
urban, semiurban, and rural areas in Switzerland
narrowed somewhat during the war and postwar
periods. On the basis of data available for in
dustry, commerce, and crafts since October 1943,
average hourly earnings of wage earners in urban
areas rose 26.9 percent by October 1946, in semi
urban areas by 30.5 percent, and in rural areas
by 32.4 percent. (These percentages were weight
ed by industry according to the distribution of
employment disclosed in the 1946 survey.) The
narrowing of differentials was most marked among
women workers, somewhat less than the average
among the skilled men, and negligible among
young workers. Average hourly earnings of semi
skilled and unskilled wage earners, the most nu
merous of any of the categories surveyed in the
small city and rural areas in 1946, are presented
below for 1943 and 1946 to illustrate the narrow
ing of earnings differentials; indexes have been
computed by using average hourly earnings of
45
1943:
Hourly earnings (in francs) . .
Indexes (urban earnings=
Urban
1. 71
100) ........... .................................
1946:
Hourly earnings (in francs) __
Indexes (urban earnings=
100) ........................................
S m a ll c ity
R u ral
1. 57
1. 51
100.0
91. 8
88. 3
2.12
2. 01
1. 92
100.0
94. 8
90. 6
In general, earnings of workers in the lowerpaying industries rose more than those in the
higher-paying industries during both the war and
postwar periods (see table 2, series C). Thus,
hourly earnings of workers in the relatively lowpaying industries—textiles, clothing, paper and
leather, wood, and stone and clay—increased
more than the average for all industries. On the
other hand, increases recorded for workers in the
higher-paying industries—food, graphic arts, com
merce, and transportation—were below the over
all average. However, earnings of the relatively
low-paid artisans were a notable exception; by
October 1946 they rose 57.6 percent over the
prewar level whereas the average increase for all
groups during this period was 77.5 percent. Also
contrary to the general trend noted, workers in
the relatively high-paying watch and jewelry
industries were among those obtaining the great
est increases during this period—87.9 percent.5
War and postwar increases in family allowances6
have tended to widen earnings differentials. Hour
ly earnings of single workers covered by surveys
of workers subject to collective agreements and
wage regulations in five large cities rose by 61.9
percent between October 1939 and October 1947;
for married workers without children, 63.7; and
for married workers with 2 children, 73.0 percent.
Wage and Price Policies
Switzerland imposed no governmental wage
controls or restrictions on collective bargaining
during 1939-47. In the absence of wage controls
or restrictions on collective bargaining, organized*8
8 This percentage does not completely reflect the extent of the increase;
for explanation, see footnote 5, table 2.
8 Family allowances in Switzerland are generally part of wage provisions
in collective agreements and are paid as part of the wage rate or cost-oMiving
allowance; the data above refer only to industries in which family allowances
have been adopted.
46
WAGE TREKD8—VARIOUS FOREIGN COUNTRIES
T a b l e 2 . —Switzerland:
Average hourly earnings 1 (series C) in industry, crafts, and commerce, by industry group, skill, sex,
and age, June 1989-0ctober 1946
Percent change in earnings, June 1939 to
October 1946
Average hourly earnings (in francs)**
Men
Industry
Skilled
1939
Semiskilled
and unskilled
1946
1939
1946
Women
1939
1946
Youths
(under 18
years of age)
1939
1946
Men
Women Youths Total*
Semi
Skilled skilled
All industries; Average....................................................
1.55
2.47
1.18
2.04
0.75
1.45
0.54
1.17
59.3
72.9
93.3
116.7
77.5
Textile........................................... ...................................
Clothing and household equipment...............................
Food, beverages, and tobacco.........................................
Chemical...........................................................................
Paperjfand leather.............................................................
Graphic arts _ _ ___
Wood.................................................................................
Metal and machines *......................................................
Watch and jewelry *_.......................................................
Stone and clay..................................................................
Artisans.............................................................................
Commerce.........................................................................
Private transportation
1.28
1.53
1.69
1.55
1.49
2.00
1.44
1.48
1.62
1.47
1.50
1.69
1.75
2.36
2.50
2.41
2.55
2.54
2.99
2.28
2.39
2.88
2.41
2.35
2.47
2.44
1.00
1.20
1.30
1.30
1.22
1.26
.99
1.19
1.28
1.12
1.22
1.34
1.28
2.00
2.07
1.96
2.17
2.14
2.02
1.84
2.03
2.32
2.04
1.96
2.06
1.97
0.72
.73
.71
.79
.70
.81
.65
.77
.91
.73
.90
.91
1.45
1.40
1.27
1.37
1.38
1.33
1.31
1.40
1.78
1.37
1.38
1.48
0.48
.49
.53
.61
.48
1.15
1.10
1.08
1.08
1.17
1.05
1.20
1.22
1.40
1.27
.99
1.00
84.4
63.4
42.6
64.5
70.5
49.5
58.3
61.5
77.7
63.9
56.7
46.2
39.4
100.0
72.5
50.8
66.9
75.4
60.3
85.8
70.6
81.3
82.1
60.7
53.7
53.9
101.4
91.8
78.9
73.4
97.1
64.2
101.5
81.8
95.6
87.7
53.3
62.6
139.6
124.5
103.8
77.0
143.7
99.2
89.0
64.8
69.1
85.5
55.6
81.8
69.2
87.9
80.2
57.6
54.2
50.6
.48
.61
.60
.60
.47
.48
150.0
100.0
133.3
111.7
110.6
108.3
1 Series O refers to all earnings of wage earners covered in annual surveys
conducted by the Federal Office of Industry, Trades, and Labor in collabora
tion with employers’ associations. The 1946 survey covered 398,336 wage
earners in 21,692 establishments in industry, crafts, and commerce.
* In 1939, the Swiss franc exchanged on the average for 22.53 United States
cents; in 1940 for 22.68 cents; and in 1941 (the last war year for which an average
has been computed by the Federal Reserve Board) for 23.21 cents. Since
1946, the Swiss franc has exchanged for 23.36 United States cents. Great
caution, nevertheless, should be used in comparing Swiss wage data with
those of the United States. Comparisons of wages between countries are
difficult to interpret because foreign exchange rates do not truly reflect inter
national differences in living costs and because of the lack of information on
relative productivity by industry in different countries. Wherever produc
tivity studies have been made, the differences favor the United States.
* Percentage changes for all groups are based on indexes of hourly earnings
weighted by June 1939 employment data.
* Family allowances and special bonuses excluded in some cases; age limit
for young workers set at 20 years for these industries.
* Data for the watch industry of this classification refer to 1944 and 1945;
note has been made in official sources that these figures do not include in
creased cost-of-living and family allowances for this industry.
Source; La Vie Economique, August 1947, pp. 294-309.
labor agreed to avoid work stoppages during the
war in the interest of national welfare.7
The administration, however, took steps to im
prove the earning position of those workers
(largely not covered by collective agreements)
whose earnings did not increase in relation to
rising prices as much as earnings of other workers.
In 1941, the Cantonal and Federal Governments
were empowered, under certain conditions, to ex
tend collective agreements to cover all workers
in an industry throughout a Canton or the entire
nation. In addition, a Consultative Commission
on Wages, established in the same year, advised
the Government on questions relating to earnings
of workers by means of quarterly recommenda
tions covering wage adjustments to meet rising
prices.
Legislation adopted by the Swiss Federal As
sembly on, October 1, 1941, and subsequently re
newed during the war and postwar periods,8
enables the Cantonal and Federal Governments to
apply a collective agreement, either in whole or
in part, within a Canton or throughout the nation.
This power has been most frequently used to ex
tend the coverage of wage clauses dealing with
cost-of-living allowances. In general, a declara
tion invoking this law can be issued if in a certain
industry a majority of the workers and the em
ployers who employ a majority of the workers are
already governed by the agreement and approve
the order.9 Agreements or clauses cannot be ex
tended unless, in the opinion of the authorities, a
real need for such action exists. Provisions of the
clauses or agreements adopted must not violate
existing legislation and are required to recognize
regional differences. If clauses of existing con
tracts are more favorable than those under the
extension of agreements, they are not affected.
The Consultative Commission, composed of
specialists and representatives of management,
labor, and the Government, issued quarterly wage
adjustment recommendations up to the second
quarter of 1946 when the groups authority ex
pired. Although no legal compulsion was attached
1 Relatively little time was lost due to labor disputes during the war; from
1,480 to 17,690 man-days were lost annually due to disputes between 1939 and
1944, inclusive, compared with 184,483 in 1946.
• Effective up to December 1, 1948, under latest renewal. Trade unions
have favored converting these emergency laws into permanent legislation.
• The consent of a labor or employers* organization is considered the same
as an approval by all its members.
SWITZERLAND: WAGE TRENDS AND POLICIES
to the Commission’s findings, the Commission’s
prestige was sufficient to give its suggestions con
siderable weight. In June 1947, a similar Con
sultative Commission was established for the same
general purpose.
Governmental authority over prices, established
in 1932, was invoked at the beginning of the war
and special war agencies were set up to adminis
ter price ceilings, rationing, and subsidies. The
Government’s aim was to keep prices from rising
and to maintain an adequate distribution of warreduced supplies. Sharp increases were noted in
prices during the early years of the war (see table
1) as Switzerland was cut off from normal sources
of supply. The price control program became
more effective as the war continued; although
various regulations were removed upon the termi
nation of hostilities, the price control machinery
remained in operation. As late as December 1947,
rationing still governed the distribution of such
important food items as sugar, grain products,
rice, cheese, butter, oils, bread, and milk.
Toward the end of 1947, the Government
sponsored a conference of representatives of labor,
management, agriculture, and other interested
47
organizations to discuss means of preventing a
wage-price spiral. As a result of this conference,
a voluntary stabilization program was adopted by
the principal labor,10employers’, and other economic
organizations in February 1948. Wages and prices
prevailing at the beginning of the year are to be
frozen until October 31, 1948; however, wage in
creases may be permitted under terms of the
agreement for workers whose real earnings are
still below the August 1939 level and for other
workers to the extent that employers can absorb
resulting increased costs without raising prices.
Other wage and price increases may be allowed in
hardship cases or in order to adjust inequalities.
Administration of this program is to be placed
under a joint commission on which labor and
management groups are to have equal representa
tion, and whose impartial president is to be named
by the Government. The Commission will rely
upon the voluntary cooperation of participating
groups for carrying out its decisions. The agree
ment may be suspended on 3 months’ notice, if
important economic changes take place.
10 The Metal Workers* Union, one of the largest unions in the Swiss Fed
eration of Trade Unions, was withholding approval of the agreement when
this article went to press
Canada: Wage Trends
and Wage Policies,
1939-47
J oseph M intzes 1
weekly earnings of wage earners in
Canadian manufacturing industries rose by ap
proximately 70 percent between 1939 and June
1947, whereas retail prices increased by about
33 percent and wholesale prices by nearly 70 per
cent. These changes in wages and prices increased
the actual purchasing power of such workers whose
real weekly earnings on June 1, 1947, averaged
approximately 28 percent above the 1939 level.
The moderate increase in prices during this period
parallels the price developments in the United
Kingdom and Sweden.2
Changes in the Canadian wage structure during
World War II and in the postwar period resulted in
some reduction in differences in average hourly
earnings between men and women, among the
various industries, and among the different
Provinces; but the trend toward narrowing
differences was not always clear-cut. These
changes, in general, were like those which occurred
in other countries.
Unlike the wage policies followed in Great
Britain add Sweden, where stabilization was
achieved largely through voluntary agreements
between employers and trade-unions, direct gov
ernmental controls over wages were relied upon in
Canada from November 1941 to December 1946.
At the same time, the Government maintained
price control and rationing in an attempt to
stabilize prices and to assure an adequate dis-
Average
* Of the Bureau’s Foreign Labor Conditions Staff.
* See p. 1 for wage trends and policies in United Kingdom.
48
tribution of war-reduced supplies of consumers’
goods. Following a policy influenced considerably
by similar movements in the United States,
wartime instituted wage controls in Canada were
withdrawn in December 1946; and most price
control regulations were removed by the fall
of 1947.
Proximity and close economic ties have limited
the extent to which Canada has been able to insu
late herself from the major economic trends in the
United States. Price and wage pressures from
across the border have been instrumental in Can
ada’s abandonment of most of her wartime eco
nomic controls. Internal factors have also been
at work. The upward wage pressures within
Canada also stem from a manpower shortage
caused by a great industrial expansion which is
similar to that in the United States.3 As in the
United States, the heavy foreign and domestic
demands for her products also have tended to push
up Canadian prices during the postwar period.
Money W ages4
Average hourly earnings in Canadian manu
facturing industries rose from 42.2 cents in 1939
to 79.8 cents in June 1947 5—an increase of 89.1
percent (table 1). Additional increases in hourly
earnings can be anticipated following important
wage increases, ranging from 7 to 13 cents an hour,
granted in major collective agreements made after
June. Hourly earnings rose steadily during the
war, and, after reaching a wartime peak of 70.5
cents in May 1945, declined slightly before re
suming their upward trend in the early part of
1946.*
* Industrial production, according to official indexes, rose 60.4 percent
in Canada and 70.8 percent in the United States between 1939 and June 1947.
* Although data on hourly and weekly earnings for the period before 1942
do not cover identical groups in all cases, this material is employed as a gen
eral indication of trends. Footnotes to the various tables mention instances
where data may not be directly comparable.
* All dollars and cents quotations in this article refer to Canadian money.
In 1939, the exchange rate for a Canadian dollar was 96.0 United States cents;
between 1940 and July 1946 it was 90.9 cents. Since July 1946, the official
exchange rate in Canada has been set at par, with a Canadian dollar exchang
ing for a United States dollar. Free exchange rates for the Canadian dollar in
the United States, however, have been below the official rate-declining
gradually from an average of about 95 cents in 1946 to about 92 cents in the
spring and summer of 1947.
Great caution, nevertheless, should be used in comparing Canadian wage
data with those of the United States. Comparisons of wages between coun
tries are difficult to interpret because of the fact that foreign exchange rates
do not truly reflect international differences in living costs and because of the
lack of information on relative productivity by industry in different coun
tries. Wherever productivity studies have been made, the differences favor
the United States.
CANADA: WAGE TRENDS AND POLICIES
T a b l e 1. —Canada:
Hours and earnings in manufacturing
industries, and indexes of cost of living and real wages,
1939-June 1947 1
Dates
Average Average
Average
hours
weekly
hourly
worked earnings
earnings per
week
1939............. * ?$0.422
1940.............
(*)
1941.............
0)
1942.............
•. 554
1943.............
«.603
1944.............
*.646
1945.............
2.694
1946.............
2.700
1947: Jan. 1.
Feb. 1.
Mar. 1
Apr. 1.
Mayl_
Junel.
.763
.764
.771
.776
.783
.798
Indexes (1939=100) of—
Average
weekly
earnings
Cost of
living
Real
weekly
earnings
47.2
60.1
60.6
50.2
48.3
47.5
43.3
42.6
8 20.11
(*)
(4)
8 27.99
8 29.70
*30.94
8 30.71
*29.87
100.0
(4)
(4)
139.2
147.7
153.8
152.7
148.5
100.0
104.1
110.0
115.3
116.7
117.1
117.7
121.8
100.0
<f)
*38.1
43.2
43.4
43.2
42.2
42.9
8 29.07
33.00
33.46
33.52
33.83
34.23
«144.5
164.1
166.4
166.7
168.2
170.2
125.1
125.9
127.0
128.7
131.1
132.9
«115.6
130.4
131.1
129.6
128.4
128.1
h120.8
126.6
131.4
129.8
122.0
* Sources: Canada, Dominion Bureau of Statistics: Weekly Earnings and
Hours of Work of Male and Female Wage-Earners Employed in the Manu
facturing Industries of Canada, 1944; Statistics of Average Hours Worked and
Average Hourly Earnings, various dates; mid the Employment Situation,
various dates. The Canada Yearbook, Ottawa, 1946.
The census of manufactures data on earnings and hours for the month of
highest employment were used for the years 1939 through 1944. Data for
later years are from a current monthly survey based on returns of employers
with 16 or more employees and keeping man-hour records of such employees,
and therefore relate primarily to hourly rated (time) workers.
* All dollars and cents quotations in this and subsequent tables refer to
Canadian money.
* Computed in the United States Bureau of Labor Statistics by taking a
weighted average of male and female average weekly earnings for 1939,1942,
1943, and 1944; and by taking an average of the 12 monthly figures of average
weekly earnings for 1946 and 1946.
4 Data not available.
1 Averages affected by year-end holidays.
Increases in average hourly earnings during the
war period represented, for the most part, cost-ofliving supplements and increases in substandard
wages provided by wartime wage orders, overtime
pay, and the high wage rates paid by war indus
tries. According to a recent official study, the
decline in average hourly earnings experienced
after the end of the war in Europe was the result
of a shift in employment from the higher paying
war industries to lower paying jobs, and was
not attributable to reductions in hourly rates.®
This downward trend was reversed in the first
half of 1946 by the relatively increased employ
ment which occurred in high paying heavy indus
tries, as well as by increased wage rates through
out industry in general. With wage controls
terminated in December 1946, the upward move
ment of average hourly earnings in 1947 repre
sented wage gains made through collective bar
gaining and by the competitive bidding for labor
by industry under conditions of relatively full
employment.
Between 1939 and June 1947, average weekly
earnings of wage earners in Canadian manufac-•
• Postwar Trend of Beal and Money Earnings in Canada (In Labor Ga
zette, Department of Labor, Ottawa. July 1947 (pp. 949-963).
49
turing industries rose from $20.11 to $34.23—an
increase of 70.2 percent. Although weekly earn
ings dropped sharply from the wartime peak of
March 1945 during the latter half of 1945 and
early 1946, this le^el was regained, and in June
1947 average weekly earnings were 6.6 percent
above the wartime maximum. Data available
since 1942 for nine leading industries, including
manufacturing, indicate that average weekly
earnings of both wage earners and salaried em
ployees were highest in both 1942 and June 1947
in mining, transportation, and finance. Although
trade, logging, and services remained the lowest
paying industries in both periods, the relative in
crease in earnings among industries in the group
was greatest in these three, with logging showing
an increase of 66.7 percent over the 1942 average
(see table 4, p. 51). The increase in average
weekly earnings in manufacturing (25.5 percent)
during this period was very close to the average
for all groups (26.0 percent).
An important factor in the trend of earnings in
the postwar period has been the steady reduction
of hours, together with the maintenance of weekly
pay. Although average weekly hours dropped
from 47.5 to 42.9 between 1944 and June 1947,
average hourly earnings during this period rose by
23.5 percent and average weekly earnings by 10.6
percent. Part of the postwar reduction in the
number of hours worked can be attributed to
organized labor’s drive for the 40-hour week
through collective bargaining.
Real Wages
Increased money earnings were partially offset
by the higher cost of living in the period 1939June 1947. During that time the official cost-ofliving index of the Dominion Bureau of Statistics
rose by 32.9 percent, whereas average weekly
earnings in Canadian manufacturing industries in
creased by 70.2 percent. On this basis, real weekly
earnings in June 1947 were 28.1 percent higher
on the average, than in 1939. Real earnings
however, reached a maximum of 36.6 percent
over the 1939 level in March 1945, then declined
sharply in the latter part of 1945 and in 1946.
During the early part of 1947, they rose slightly
but between March and June 1947 again showed
a small decrease which reflected the relatively
greater increase in prices over wages during the
postwar period.
50
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
These estimates may, however, overstate the
actual increase in real earnings. The figures on
average earnings do not take into account the
wartime increases in direct taxes; the Canadian
cost-of-living index does not include direct taxes.
The average income tax paid by a single worker
rose from 1.4 percent of his income in 1939 to 14
percent in 1946, and the tax paid by a married
worker with one dependent rose from 0 to 6
percent during this period.
1939
1940
1941
1942
1943
1944
_______________
_______________
___
_______________
_______________
_______________
Average hourly earnings
(in cents)—
Men’s
Women’s
46. 2
4 8 .7
53.8
61. 9
67.1
71.2
28. 3
2 8 .5
31 .6
37. 1
43.1
47 .9
earnings as
percent of
men’s
61. 3
58.5
58 .7
59. 9
64.2
67.3
Source: Census of Manufactures (data refer to month of highest employ
ment).
With the exception of British Columbia, where
the upward movement of earnings was more
marked than elsewhere in Canada, there has been
a general reduction in differentials in average
hourly earnings among wage earners in the various
Provinces between 1939 and June 1947. As
measured by indexes based on average hourly
earnings in British Columbia, index numbers for
the various Provinces, in June 1947, clustered in
the high 70,s and 80’s, compared to a considerably
wider spread in 1939 (table 2).
Canada: Average hourly earnings in manufac
turing industries, by Province, 1989-June 1947
T a b l e 2 .—
19391
Province
British Columbia.............
Manitoba..........................
Ontario..............................
Alberta..............................
Saskatchewan...................
Quebec..............................
Nova Scotia--..*..............
New Brunswick...............
Prince Edward Islan d ...
Average
hourly
earnings
$0,495
.487
.459
.451
.421
.370
.349
.342
.233
June 1, 1947 *
Index
Average
(British
hourly
Columbia =* earnings
100)
100.0
98.4
92.1
91.1
85.1
74.7
70.5
69.1
47.1
$0,948
.789
.837
.794
.798
.725
.746
.734
(*)
Index
(British
Columbia *
100)
100.0
83.2
88.3
83.8
84.2
76.5
78.7
77.4
(*)
1 Based on Census of Manufactures. Data relate to month of highest em
ployment in each year.
* Current monthly survey data based on employers of 15 or more em
ployees and keeping man-hour records of such employees; data, therefore,
relate primarily to hourly rated (time) workers.
* Not available.
Wage Structure Changes
Between 1939 and 1944, there was a reduction
in earning differentials between men and women.
In 1944, average hourly earnings of 47.9 cents for
women wage earners and 71.4 cents for men repre
sented increases of 54.5 and 69.3 percent, respec
tively, over 1939 levels. The trend toward narrow
ing the spread between men’s and women’s
earnings during these war years 7 is indicated in
the following tabulation:
» No data are available for the more recent period.
Among the various manufacturing industries,
average hourly earnings of wage earners in the
manufacture of iron and its products were highest
in both 1939 and 1944 (table 3).8 The greatest
increase during this period occurred in chemicals
and allied products—an important war industry;
the smallest, in the nonferrous metal products
industry. Although there had been some change
in rank according to earnings among the various
industrial groups, the earnings level of the lowest
8Average hourly earnings for identical industrial groups are not available
or later dates. The monthly series on average hourly earnings in manu
facturing started in 1944, and the industrial classification used differs some
what from that of earlier series.
CANADA: WAGE TRENDS AND POLICIES
group in proportion to that of the highest re
mained unchanged between 1939 and 1944, thus,
average hourly earnings in vegetable products, the
lowest paying group in 1939, were approximately
60 percent of the highest; and, in 1944, wage
earners in textiles, the new lowest paying in
dustry, also had an earnings level of about 60 per
cent of the highest.
T able 3.—Canada: Average hourly earnings of wage
earners in manufacturing industries, by industry group,
1989-441
Industrial group
Average hourly
Rank in—
earnings of wage
Percent
earners
increase
1939
1939
1944
All industrial groups_____________
$0,422
$0,646
53.1
Iron and its products..........................
Nonferrous metal products................
Nonmetallic mineral products...........
Wood and paper products..................
Chemicals and allied products..........
Animal products.................................
Textiles and textile products.............
Vegetable products..............................
.572
.508
.498
.403
.392
.379
.350
.346
.803
.568
.676
.554
.636
.556
.488
.506
40.4
11.8
35.7
37.5
62.2
46.7
39.4
46.2
1944
1
2
3.
4
5
6
7
8
1
4
2
6
3
5
8
7
i Source: Report of Paul H. Norgren, Labor Attach^, U. S. Embassy, Otta
wa: No. 21, Jan. 13,1947 (p. 6). The data are based on Census of Manufactures
for the month of highest employment.
Comparable data available since 1942, however,
indicate that the differentials in average weekly
earnings among 9 leading industries had narrowed
somewhat by June 1947 (table 4). The relative
increases in average weekly earnings of wage
T able 4.—Canada: Weekly earnings of wage and salaried
workers in 9 leading industries, 1948-June 19471
Industry
A11 industrial groups
Mining. ______________________________
Transportation________ _______________
EinanoA
._
_
Manufacturing________________________
______
Communications. _ ___ __
Construction and maintenance__________
Trad a
.
____
Logging
__ r
_
Services______________________________
1942
June
1947
Percent
increase
$28.61
$36.06
26.0
34.79
34.69
30.20
29.17
28.13
26.45
24.07
20.34
17.37
41.17
43.37
37.51
36.61
34.41
34.51
31.49
33.91
23.22
18.3
25.0
24.2
25.5
22.3
30.5
30.8
66.7
33.7
1 Source: Canada, Dominion Bureau of Statistics (Ottawa); Annual Review
of Employment and Payrolls in Canada, 1945 (p. 96); and The Employment
Situation, June 1947, (p. 21).
earners in the low-paying industries were generally
higher than those in the better paying industries.
In June 1947, average weekly earnings in the
services industry—the lowest paying industry in
both years studied—were 53.5 percent of weekly
51
earnings in transportation—the highest paying
industry; in 1942, earnings in services were 49.9
percent of mining—the highest paying industry
of that year.
Wage and Price Policies
During the first 2 years of World War II, little
control was placed upon the movement of wages.
The first measure relating to the control of wages
was Order-in-Council P. C.-7440 of December 16,
1940, but this order merely set forth a policy to be
followed by Boards of Conciliation and Investiga
tion in their attempts to settle wage disputes.
In the fall of 1941, however, a comprehensive wage
and price control policy was introduced by the
Wartime Wages and Cost-of-Living Bonus Order
of October 24, 1941 (P. C.-8253).*
The Order which replaced P. C.-7440 stabilized
all wage rates at the level of November 24, 1941.
The program was administered under a National
War Labor Board and by 9 Regional War Labor
Boards. Adjustments were permitted when an
employer’s scale of wage rates was low in compari
son with rates generally prevailing in the same
occupation in the same locality. The NWLB
could also order an employer to pay a cost-ofliving bonus based on any increase in the cost-ofliving index after October 1941, or such date as
the Board determined.
The second phase of Canadian wartime wage
control was inaugurated at the end of 1943,
when a new Wartime Wages Control Order (P. C .9384) was issued. With its amendments of
March 1944, this order incorporated the existing
cost-of-living bonuses into the regular wage rates
and allowed adjustments only when necessary “to
rectify a gross inequality or gross injustice.” In
an effort to prevent increased prices, the NWLB
was directed to pay particular attention to the
employer’s ability to pay an increase without an
increase in price. Employers paying higher than
authorized rates could not deduct such additional
payments as costs in computing their excessprofits taxes. During the remainder of the war,
living costs as measured by the official cost-ofliving index remained stable; wages rose more
* This wage order was consolidated and reissued July 10,1942, with subse
quent minor amendments as P. C.-5963, Wartime Wage Control Order.
52
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
slowly than previously, and no further changes
were made in wage controls.
The first change in wage controls after VJ-day
occurred in January 1946, when price ceilings were
suspended on 300 items and new regulations made
it possible for the NWLB to grant wage increases
of 10 cents an hour in many cases. An increase in
retail prices and the large number of threatened
and actual strikes for wage^increases resulted in a
further relaxation of wage controls on June 20,
1946. Following the settlement of major strikes
during the summer and fall of 1946, wage control
regulations were repealed, effective December 1,
1946.
Price control was introduced in the fall of 1941 10
as part of the general wage and price stabilization
program. Initially, efforts were made to stabilize
retail prices by requiring manufacturers and dis
tributors to absorb increased costs and by the
payment of subsidies. The subsidy program was
introduced at the end of 1941 with the express
purpose of forestalling a wage increase based on
the rise in the cost-of-living index. The increas
ing reliance placed on subsidies in connection with
price control is indicated by the following data:
Appendix.— Canada, as o f February 15,19481
The removal of price controls in September
resulted in some disturbance of the relative wageprice stability of Canada during the last quarter of
1947. Sharp rises in prices and wages which
followed decontrol resulted in the reimposition of
some price controls in late 1947 and early 1948.
With relatively few consumer goods shortages in
Canada during the postwar period, the purchasing
power of workers’ incomes was not as limited as in
Europe.
Between June and December 1947, average
hourly earnings of wage earners in Canadian
manufacturing industries rose by 7.1 percent (see
table 1A). Inasmuch as the average number of
hours worked per week increased slightly over this
period, average weekly earnings increased at a
somewhat higher rate, 8.6 percent.
10 See Monthly Labor Review, August 1945 (pp. 243-254), or separate
Serial No. R. 1767, for further details.
* The appendix tables are numbered to correspond with those in the original
articles that deal with the same or related series of statistics. The letter A
has been attached to the table number in the appendix table in each instance.
Subsidies1
Fiscal year ending Mar. 31—
(*» thousands)
$3,242
1942 __________________
1943 _________________________ 67, 715
1944 __________________________ 111,024
1945 _________________________ 149,668
1946 (estimated)________ ____ __ 139,509
1 Source: House of Commons Debates (Ottawa), June 27, 1946,
Appendix (p. 8). (Annual budget message to Parliament of Minister
of Finance).
For further details, see Monthly Labor Review, August 1945 (pp.
243-254), or separate Serial No. R 1767.
Agricultural subsidies in connection with feed and freight are not
included in this tabulation.
Retail prices, as measured by the official costof-living index (table 1, p. 427) remained stable
from the fall of 1941 to the end of the war. After
the war ended, price ceilings were suspended on
many items, and the index rose at a relatively
rapid rate, reaching a level by June 1947 that was
approximately 12.6 percent above that of VJ-day.
In early 1947, the Canadian Minister of Finance
announced that most consumer goods had been
removed from price control with the exception of
those goods “of basic importance in living costs
and production costs.” Although some controls
were still in effect as late as October 1947, the
Government had removed most price controls
and eliminated most subsidy payments.
T a b l e 1 A . —Canada: Hours and earnings in manufac
tu rin g in d u s tr ie s , a n d in d e x e s o f cost o f liv in g a n d real
wages, June 1947-January 1948
Indexes (1939=100) of—
Dates
Average Average Average
hourly weekly weekly Average
Real
earnings hours earnings weekly Cost of weekly
earn living earn
ings
ings
1947: June 1.............. . i $0.798
July 1................
.808
Aug. 1................
.813
Sept. 1...............
.822
Oct. 1................
.834
Nov. 1...............
847
Dec. 1..............
.855
1948: Jan. 1.................
42.9
42.0
42.5
42.3
43.1
42.9
43.5
i $34.23
33.94
34.55
34.77
35.95
36.34
37.19
170.2
168.8
171.8
172.9
178 8
180.7
184.9
132.9
133.9
134.6
137.3
140.1
141.5
143.8
146.1
128.1
126.1
127.6
125.9
127.6
127.7
128.6
1 See footnote 5, p. 48, on the exchange rate for the Canadian dollar in the
United States. Since the summer of 1947, the free exchange rate for the Cana
dian dollar continued to decline. During December 1947, the free exchange
rates averaged 88.4 cents and in January 1948,90.5 cents. The official rate in
Canada, however, remained at par.
Source: Statistics of average hours worked, December 1947. Prices and
price indexes December 1947. Dominion Bureau of Statistics, Ottawa.
On the basis of the statistics on earnings of
wage earners and salaried workers in nine leading
industries, average weekly earnings increased most
sharply during this period in the mining and log
ging industries (very little in trade) and declined
CANADA: WAGE TRENDS AND POLICIES
53
slightly in finance (see table 4A). November
data on average hourly earnings by Provinces,
indicate a continuation of the relatively higher
earnings level in British Columbia (see table 2A).
earnings indexes were of about the same magnitude
(8.2 and 8.6 percent, respectively (see table 1A)).
T a b l e 2 A . — Canada:
The September 15, 1947, order had removed
price controls from many basic items of consump
tion and remaining subsidies, thus practically com
pleting the process of decontrol. As a result prices
rose sharply, followed by demands on the part of
labor for wage increases and a return to price con
trols. In late 1947 and early 1948, the Wartime
Prices and Trade Board, which still maintained
jurisdiction over price policy, reimposed some con
trols over the prices of certain canned vegetables,
butter, meat, and citrus fruits. Rationing of sugar
has been continued because of balance of payments
difficulties; and rent controls have been maintained.
On February 2,1948, a parliamentary committee
composed of representatives of all parties was ap
pointed to investigate the causes of recent price
rises in order to guide Parliament and the Govern
ment in setting price policy. More stringent im
port controls, restrictions on travel abroad, and
increased excises on certain imports were adopted
on February 20 in an effort to conserve dwindling
Canadian dollar holdings.
Although some additional income has been re
ceived by workers in the form of family allowances
since mid-1945, these benefits are earmarked ex
clusively for child welfare (i. e., training, main
tenance, care, etc.). No means test is required for
family allowances which in August 1947 averaged
$5.95 per child—all children under 16 years of age
are eligible.
Average hourly earnings in manu
facturing industries, by Province, November 1947
Province
British Columbia __________________
Manitoba____________________ ______
Ontario_____________________________
Alberta __ _________________________
Saskatchewan_______ ________________
___ ______________________
Quebec
Nova Scotia.. _______________________
New Brunswick______________________
Average
hourly
earnings
$1,013
.826
.891
.846
.868
.765
.784
.770
Index British
Columbia=100
100.0
81.5
88.0
83.4
85.7
75.5
77.4
76.0
Source: Statistics of average hours worked, November 1947. Dominion
Bureau of Statistics, Ottawa.
T a b l e 4 A . —Canada:
Weekly earnings of wage and salaried
workers in 9 leading industries, December 1947
Industry
Dec. 1,1947
Percent in
crease from
June 1947
____________________
$38.17
5.9
Mining
______________________________
Transportation
_______________________
Finance _ . ._
____________________
Manufacturing._________________________
Communications __________________ _____
Construction and maintenance_____________
T rad e_________________________________
Logging_____ __________________________
Services___________________ ____________
46.21
44.85
37.36
39.22
35.60
36.51
32.03
38.81
24.95
12.2
3.4
(-.4 )
7.1
3.5
5.8
1.7
14.5
7.5
All industrial groups
Source: Employment Situation, December 1947, p. 22. Dominion Bureau
of Statistics, Ottawa.
Real Wages
Little change in the real weekly earnings of
Canadian wage earners in manufacturing indus
tries took place between June and November 1947;
increases in the cost-of-living and average weekly
Appendix—Hours o f Work
The following table gives a general indication of
average hours in industrial employments (i. e.,
manufacturing, transport, and mining) for the five
countries covered by this bulletin for which data
were available, and covers, for purposes of com
parison, hours in manufacturing in the United
States. These statistics relate to the month nearest
to June 1947 for which information was available
in the respective countries.
Differences in methods of collection of data may
Wage-Price Policy
account for some of the differences noted in the
table. The United Kingdom, Sweden, Canada,
and the United States base their averages on ex
tensive surveys of industrial plants keeping records
of man-hours actually worked in a certain period.
France and Switzerland show the scheduled hours
of establishments, weighted by the numbers of
workers employed. This method gives a some
what higher figure than hours actually worked, as
it represents the number of hours the workers are
scheduled to be on the job and does not make
allowance for absences.
54
WAGE TRENDS—VARIOUS FOREIGN COUNTRIES
Average weekly hours in 6 countries, 1947
United Kingdom, April 1947
Industries for which reports are available
Averages for all industries covered________________
Ore mining and metal industries...................................
Metal, engineering, shipbuilding.. ___________
Iron ore mining and quarrying."................ ...........
Metallurgy....".........T...... .......................................
Watchmaking, jewelry.................................. .........
Treatment of nonmetal mine and quarry products. _.
Brick, pottery, glass.........—____ _______ _____-........
Earth and stone!........................................... ..................
Chemicals_____________________________________
Textiles and clothing___________________ ______ __
Textiles___________________________________
Cotton.......................... ........ ........... .........................
Rayon and silk weaving_____________________
Other silk and rayon
Wool__________ _________ _____ __________
Linen. ___________________________________
Embroidery________________________________
Textile fin ish in g_______________ ____________ __
Other textiles___________________ __________
Clothing................. ...... ..................................... .............
Leather, fur, rubber, paper______________________
Leather, f u r ___ _____________________________
Leather, fur, rubber___ ________________________
Rubber__ ____________________________________
Paper m ak in g ________________________________
Printing and publishing_________________________
Paper, printing, stationery_____________________
W oodworking______________________ ___________
Pood industries........................................................... .
M isceilaneous manufacturing____________________
Building, contracting ________________ ____ _____
Public works
___ . ________ ___________ ______
Public utilities and transport (including railways)___
Public utilities
_________________
T ransport (excluding railways)
________________
Government industrial establishments____________
Com m area
All workers
Adult men
45.0
46.3
44.8
46.7
45.7
46.9
43.8
48.2
46.0
45.2
48.8
47.7
45.4.
46.8
44.1
44.7
43.3
46.4
46.5
45.7
44.1
43.7
46.8
46.1
45.3
46.8
41.6
44.1
45.1
46.6
46.6
47.0
43.1
43.8
44.3
45.7
44.7
45.8
48.7
48.7
43.5
44.8
45.0
47.7
46.5
46.0
46.2
48.6
45.0
47.7
49.0
45.3
_ _ _ __
Banking and insurance__ _______________________
Sweden
May 1947
Switzerland
June 1947
Prance
July 1,1947
Canada
June 1,1947
United States
June 1947
All workers
All workers
All workers
All workers
All workers
45.1
47.9
44.8
45.8
48.2
47.9
44.9
44.4
44.2
47.9
46.4
47.6
47.9
48.0
48.0
47.3
47.9
48.3
47.8
47.4
47.9
41.9
44.5
44.0
48.1
43.4
44.7
43.2
40.4-41.3
40-40.7
40.8
46.3
45.3
43.0
41.5
44.7
44.5
45.7
38.6
38.3
40.3
43.2
39.4
41.5
.37.7
36.0
43.6
41.1
41.6
42.0
1 41.3
138.1
47.6
46.4
44.0
42.7
43.1
49.2
40.8
39.1
42.9
39.9
48.2
47.9
45.9
44.7
42.2
41.7
43.2
49.9
47.7
39.0
38.2
47.2
2 45.1
42.2
47.4
44.8
46.8
44.2
46.9
46.8
47.8
43.3
43.3
3 40.8-41.6
1 Leather and leather products, excluding fur.
2 Local transportation.
3 Average weekly hours in retail and wholesale trade respectively.
Sources and Definitions
United Kingdom.— Ministry of Labor Gazette, October
1947, pp. 321, 328-329. Total number of hours actually
worked in the last pay week of April 1947, including all
overtime and excluding all time lost from any cause, but
including any period during which work people were avail
able for work and for which a guaranteed wage was payable
to them. Recognized intervals of meals, etc., also are
excluded. In calculating averages only those work people
who were at work during part or whole of 2 pay weeks are
included, those who were absent during the whole of the
pay week having been excluded from the returns. Vaca
tions and holidays are unlikely to occur in the week
selected.
Sweden.—Sociala Meddelanden 1947, No. 8, p. 765.
Including overtime, but excluding vacations and absences.
Switzerland.—La Vie Economique, Berne, August 1947,
p. 315. Scheduled hours of establishments.
France.—Revue Frangaise du Travail, October 1947,
p. 918. Hours of work for the establishments covered,
weighted by numbers employed in those establishments.
Included in hours worked is time lost due to absences and
vacations. On the basis of an inquiry made in October
1946, it was 40 as compared with the average schedule work
week of 45.3 hours.
Canada.—Statistics of Average Hours Worked . . . at
the beginning of June 1947, p. 9. Man-hours include over
time as well as hours worked by part-time workers. Hours
credited to persons on leave with pay.
United States.—Monthly Labor Review, October 1947,
pp. 497-509. Man-hours worked in reporting establish
ments, divided by the total number of full- and part-time
employees who worked or received pay during the pay
period ending nearest June 15, 1947. Paid vacations
included as hours worked.
U. S. GOVERNMENT PRINTING O FFIC E: 1948
@FedFRASER