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Labour Costs and International Competitiveness

Published online by Cambridge University Press:  26 March 2020

G. F. Ray
G. F. Ray*
Affiliation:
National Institute of Economic and Social Research
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Extract

Figures published recently in Sweden illustrate the implications of Britain's failure to improve productivity in the 1960s as quickly as continental Western Europe. Though wage costs per unit of output in manufacturing industry have risen faster in Britain than in other major industrial countries, the statistics show that employers' total payments per hour of work are now lower here than in almost any industrial country except Japan.

Type
Articles
Information
National Institute Economic Review , Volume 61 , August 1972 , pp. 53 - 58
Copyright
Copyright © 1972 National Institute of Economic and Social Research

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References

Notes

page 53 note (1) We are grateful to the Research Department of the Swedish Employers' Confederation, Stockholm, for permission to use data published this year by the Department in Direct and total wage costs for workers—International survey 1960-1970 (which should be consulted for more detailed definitions). Data in the Swedish report are based on national statistical sources and on information received from the International Labour Office in Geneva.

page 53 note (2) As here defined, hourly earnings represent gross pay, including wages at time- or piece-rates, shift supplements, and payments for overtime. Total labour costs include in addition, under the heading social charges, all other costs carried by the employer which are directly attributable to his use of labour. More specifically, these cover incentives and gratuities, pay for non-working days (annual leave and public holidays), social security charges of a statutory, contractual, or voluntary nature (including health and other insurance and maternity and family allowances), taxes (such as the wage tax in France or insurance tax in Italy), recruiting and vocational training costs, payments in kind, and all other social welfare benefits if met by the employer.

page 53 note (3) The EEC averages are weighted by the manufacturing output of Belgium, France, West Germany, Italy, and the Netherlands.

page 57 note (1) This assessment is based on pages XXVIII-XXIX of the June issue of the UN Monthly Bulletin of Statistics, which shows the relationships calculated for the purpose of deter mining salary differentials of UN officials in various parts of the world. These, of course, are not intended to measure general levels of living costs but they may serve as a rough guide.