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The Determination of Money Wages in American Industry

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  • Otto Eckstein
  • Thomas A. Wilson

Abstract

Issues in wage determination, 379. — Hypothesis 1 (institutional): wage rates are set by a bargaining process, 381. — Hypothesis 2 (economic): both product and labor market factors influence wage determination, 381. — Hypothesis 3 (economic): two variables, profit and unemployment rates, are sufficient to explain most of the variation in the rate of increase of wage rates, 383. — Hypothesis 4 (institutional): wage determination in a group of heavy industries is interdependent, 384. — Hypothesis 5 (institutional): wages are determined in wage rounds, 386. — The central result on wages: wage determination in the key group, 388. — Some supporting evidence: time series for individual industries within the key group, 390. — The significance of other variables — productivity, 392; consumer prices, 392. — Wage determination outside the key group, 394. — Results of cross-section analysis, 397. — Reconciliation of time series and cross-section results, 401. — Relation to previous empirical results, 402. — Is there a Phillips curve for the United States? 406. — Extrapolation of the central result, 406. — Summary and concluding comment, 408. — Appendix I. The derivation of the central result, 409. — Appendix II. The construction of unemployment estimates for two-digit industries, 413.

Suggested Citation

  • Otto Eckstein & Thomas A. Wilson, 1962. "The Determination of Money Wages in American Industry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 76(3), pages 379-414.
    • Handle: RePEc:oup:qjecon:v:76:y:1962:i:3:p:379-414.
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    Citations

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    Cited by:

    1. Paul M. Beaumont, 1983. "Wage Rate Specfication in Regional and Interregional Econometric Models," International Regional Science Review, , vol. 8(1), pages 75-83, June.
    2. Niloy Bose & Jill A. Holman & Kyriakos C. Neanidis, 2007. "The Optimal Public Expenditure Financing Policy: Does The Level Of Economic Development Matter?," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 433-452, July.
    3. Sparks, Gordon R & Wilton, David A, 1971. "Determinants of Negotiated Wage Increases: An Empirical Analysis," Econometrica, Econometric Society, vol. 39(5), pages 739-750, September.
    4. Drakopoulos, Stavros A., 2008. "The Concept Of Comparison Income: An Historical Perspective," MPRA Paper 8713, University Library of Munich, Germany.
    5. Mordecai Kurz, 1979. "A Strategic Theory of Inflation," NBER Working Papers 0379, National Bureau of Economic Research, Inc.
    6. Kuhn, Peter & Gu, Wulong, 1998. "Centralization and strikes," Labour Economics, Elsevier, vol. 5(3), pages 243-265, September.
    7. Drakopoulos, Stavros A., 1995. "Towards a Hierarchical Approach to Trade Union Behaviour," MPRA Paper 15597, University Library of Munich, Germany.
    8. DREGER, Christian & REIMERS, Hans-Eggert, 2011. "On The Role Of Sectoral And National Wage Components In The Wage Bargaining Process," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 11(1).
    9. Kuhn, Peter & Gu, Wulong, 1999. "Learning in Sequential Wage Negotiations: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 109-140, January.
    10. de la Croix, David, 1994. "Wage Interdependence through Decentralized Bargaining," Journal of Economic Surveys, Wiley Blackwell, vol. 8(4), pages 371-403, December.
    11. Robert Boyer & Jean-Pascal Benassy & Rosa-Maria Gelpi, 1979. "Régulation des économies capitalistes et inflation," Revue Économique, Programme National Persée, vol. 30(3), pages 397-441.
    12. Quaas, Georg & Klein, Mathias, 2010. "Is the Phillips Curve of Germany Spurious?," MPRA Paper 26604, University Library of Munich, Germany.
    13. John H. Pencavel, 1984. "The Tradeoff Between Wages and Employment in Trade Union Objectives," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 99(2), pages 215-231.
    14. Dreger, Christian & Reimers, Hans-Eggert, 2010. "On the Role of Sectoral and National Components in the Wage Bargaining Process," IZA Discussion Papers 4908, Institute of Labor Economics (IZA).
    15. Wolfgang Pollan, 1980. "Wage rigidity and the structure of the Austrian manufacturing industry," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 116(4), pages 697-728, December.
    16. Roger E. Brinner, 1999. "Is inflation dead?," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 37-49.
    17. Orlando Gomes, 2017. "Heterogeneous wage setting and endogenous macro volatility," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 12(1), pages 27-57, April.
    18. David A. Wilton, 1969. "An Econometric Model of the Canadian Automobile Manufacturing Industry," Working Paper 14, Economics Department, Queen's University.
    19. Charles Holt & Martin David, 1966. "The Concept of Job Vacancies in a Dynamic Theory of the Labor Market," NBER Chapters, in: The Measurement and Interpretation of Job Vacancies, pages 73-110, National Bureau of Economic Research, Inc.
    20. Ahmad Al-Samarrie & John Kraft & Blaine Roberts, 1977. "The Effects of Phases I, II, and III on Wages, Prices, and Profit Margins in the Manufacturing Sector of the United States," NBER Chapters, in: Analysis of Inflation: 1965–1974, pages 241-298, National Bureau of Economic Research, Inc.

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