wage drift

Wage Drift

The amount by which the wage or salary of a worker or group of workers exceeds a previously negotiated agreement. Wage drift may occur, for example, if an employee is asked to work unexpected overtime or if persons in a region are offered wages higher than the national rate during a labor shortage.

wage drift

the propensity for employees' actual earnings to rise faster than increases in their WAGE RATE. This tends to occur when there is full employment or when there are labour shortages in particular labour markets, and often results from informal bargaining between workers, their representatives (SHOP STEWARDS) and managers supplementing formal COLLECTIVE BARGAINING. It was considered to be a widespread problem in the UK in the 1960s and contributed to the decision to create a Royal Commission to investigate the state of UK INDUSTRIAL RELATIONS (See DONOVAN COMMISSION). See PRICES AND INCOMES POLICY, PAY, PAYMENT BY RESULTS.

wage drift

see EARNINGS DRIFT.
References in periodicals archive ?
In a move likely to infuriate transport unions, Sir Roy's team also called for a review of many aspects of staffing and working practices, claiming that there had been "excessive wage drift and inefficient working practices" in the industry.
Headline inflation is set to accelerate further in line with core inflation as wage drift in the market services sectors is pushed up by strong employment growth.
Non-participation in the central agreement seems to be associated with higher average wage increases than participation but higher wage drift in participating industries has compensated employees for lower bargained wages (Snellmann, 2004).
Most of the increase was due to wage rises implemented as part of collective agreements, but 40% had been caused by wage drift and structural factors.
With the labour market still soft and inflation low, wage drift will also be limited.
For example, according to Holmlund and Skedinger (1990), wage drift in the Nordic countries accounted for almost 50% of total hourly wage increases for mining and manufacturing workers in the 1970s and 1980s.
While it is uncertain whether unemployment has already reached or surpassed its structural rate, there are clear indications of an easing in labour-market conditions, such as a significant rise in the proportion of long-term unemployed, a sharp decline in net migration from the outlying regions to the capital area and a pronounced decrease in wage drift.
According to the bank report, "On the basis of current wage agreements, an assumed 1 percent wage drift, and the central bank's inflation forecast, real wages during the first quarter of 2003 will be marginally higher than at the beginning of 2002, up about 0.
Moreover, wage drift has become sizeable in some fast-growing sectors.
It should, however, be pointed out that the scattered nature of union organization, the possibility of bargaining at the firm level, and the widespread wage drift introduce some decentralization into the country's industrial relations system.
b]) and the relative distribution of wage drift ([r.
The solidaristic outcome was increasingly `bought' with high nominal increases, and the role of local wage drift became gradually decisive in boosting wages.