Problems of prices and incomes policy, Managerial Economics

Problems of prices and Incomes policy

i. Confrontation

The imposition of the prices and incomes policy, voluntary or statutory, risks the possibility of confrontation with trade unions.

ii.  Discrimination

Incomes policies often tend to be more effective in the public sector, thus restricting incomes then more than in the private sector.

iiiDistortion of market forces

If all workers receive similar increases this will tend to distort market forces in the labour market.

Expanding sectors will find it hard to attack labour while contracting sectors will hang on to labour for too long.

iv. Differentials

Many incomes policies have been based on flat-rate increases, e.g. £4 per week maximum increases,  this increases the wage rate of lower paid workers relatively more than those of the higher paid.

v. Wages drift

This refers to the tendency for earnings to rise faster than wage rates.  This is because earnings are the compound of wages, overtime, bonuses, etc.  Incomes policy tends to worsen wages drift in those industries which are trying to attract labour, i.e. industry will be tempted to comply with the incomes policy by raising wage rates by only the stipulates account but increasing bonuses, fringe benefits and so on.

Posted Date: 11/30/2012 4:38:13 AM | Location : United States







Related Discussions:- Problems of prices and incomes policy, Assignment Help, Ask Question on Problems of prices and incomes policy, Get Answer, Expert's Help, Problems of prices and incomes policy Discussions

Write discussion on Problems of prices and incomes policy
Your posts are moderated
Related Questions
CHARACTERISTICS OF THE THREE STAGES   Stage I Here the Total Physical Product, Average Physical Product and Marginal Physical Product are all increasing.  However MPP

Explain Managerial economics according to Mote and Paul Haynes, Mote and Paul:  "Managerial economics refers to those characteristics of economics and its tools of analysis mos

Describe the Managerial decisions Managerial decisions are an important component in the working wheel of an organisation. The failure or success of a business depends upon the

Features of Free Market System The features of a free market system are: (i)         Ownership of Means of Production Individuals are free to own the means of producti


measurement and scaling techniques in business research

Plot the demand schedule and draw the demand curve for the data given for Marijuana in the caseabove.

FACTORS AFFECTING THE ABILITY OF TRADE UNIONS TO GAIN LARGER WAGE INCREASES FOR ITS MEMBERS The basic factor is elasticity of demand for the type of labour concerned.  The ela

Importance of Income Elasticity If a country is experiencing economic growth, the income of the people will increase.  However, for those engaged in the production of goods wi

Using the relationship among the price of a visit to a physiotherapist and the quantity of visits demanded, explain and distinguish between the direction, the slope, and the positi