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 ?
159) has shown that between 1975 and 1979, there was hardly any wage drift and, in that sense, the system had worked.
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.
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.
Wage drift through 2001 was thus higher than projected.
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.
Far from being a marginal phenomenon, wage drift has played a major role in wage formation if we consider the proportion of wage increases resulting from it.
Our forecast of a considerable increase in unemployment next year will also reduce wage pressure and slower output growth implies substantially lower wage drift via a large decline in overtime hours worked (although productivity related pay deals will have an opposite, but much smaller, effect on wage drift as output per head recovers).
First, wage drift can make die industrial system very costly, and wages are of increasing salience to firms in an increasingly interdependent and fiercely competitive world.
5 percent for the member unions concerned; this increase would include the wage drift and reduction in working hours expected by the parties.
Both interview and econometric results strongly support the hypothesis that rising real wages reflect neither productivity improvements nor wage drift, but the loss of the state industrial labor monopsony.
Two arguments have been offered for this current settlements, so their index will lag by around 6 months; secondly wage drift above settlements will have been eroded as productivity and output growth have slowed down.