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Published online by Cambridge University Press: 26 March 2020
British wage costs per hour, including social charges, had—by 1974—become the lowest among the fifteen industrial countries included in the comparison in this note; this competitive advantage of British industry was however partly or entirely offset by lower labour productivity. Hourly earnings in money terms were not rising outstandingly rapidly in Britain in this period, but since consumer prices increased faster, the improvement in real earnings was slower than in most other countries.
(1) G. F. Ray, Labour costs and international competitive ness, National Institute Economic Review, no. 61, August 1972, pp. 53-58.
(2) We are grateful to the Research Department of the Swedish Employers' Confederation (SAF), Stockholm, for permission to use data published in May 1976 in their Wages and total labour costs for workers-International survey 1964-1974 (which should be consulted for more detailed definitions). The information in the Swedish report is based on national statistical sources and on information from the International Labour Office in Geneva.
(3) As here defined, hourly earnings represent gross pay, including time- or piece-rate wages, shift and overtime supplements, regularly paid bonuses and premia (i.e. ‘take home’ pay before tax). Total labour costs include in addition all social charges and other costs carried by the employer which are directly attributable to his use of labour. These cover remuneration for non-working days; social security charges of a statutory, contractual or voluntary nature; taxes on wages; recruiting and vocational training costs and all other social welfare benefits if met by the employer. The compari sons in tables 1 and 2 are based on national currencies converted to Swedish kronor at annual average market exchange rates.
(1) Under the system of floating, wage costs per unit of output have a significant impact on the exchange rate.
(2) The comparisons are generally based on official exchange rates; the last paragraph of the text and table 5 contain additional comparisons on ‘purchasing power parities’.
(1) Because of differences in definition the social charges given here for Britain differ from (but are reconcilable with) those in ‘Labour costs in Great Britain, 1973’, Department of Employment Gazette, September 1975, pp. 873-885.
(1) D. T. Jones, ‘Output, employment and labour productivity in Europe since 1953’, National Institute Economic Review, no. 77, August 1976, pp. 72-85.
(1) Before tax.
(2) See source to table 5.
