Industrial Composition, Methods of Compensation and Real Earnings in the Great Depression

Abstract

A major objective of the government during the Great Recession has been severely to restrict public sector real wage growth. One potential advantage of performance-related pay schemes is that they naturally offer greater wage responsiveness to fluctuations in the business cycle. Based on evidence from engineering and allied industries during the Great Depression we show that piecework wages exhibited more flexibility than their timework equivalents. We compare and contrast southern/midland engineering districts of Britain with northern districts. The former region was dominated by piece-rated workers and by modern sections of the industry, such as vehicle and aircraft manufacture. Time-rated work predominated in northern districts where older sections – for example, marine and textile engineering – were clustered‥