Wages councils: Should they be reformed or abolished?

Abstract

The government has indicated that it wishes to abolish wages councils. So long as the UK ratifies the International Labour Organisation Convention, it is committed to the maintenance of low pay machinery in poorly paid industries, but it could deratify and abolition could take place in 1986. The two retail councils are the largest of the wages councils. Nobody pretends they function effectively. Small retailers claim that they cannot afford the minimum rates fixed by the councils, while some large companies assert that the council's recommended increases have a knock‐on effect on their own collective bargaining arrangements. But in spite of the increases in recent years, the current highest minimum rate in retailing is still 18% below what the Council of Europe described in 1983 as the “decency threshold”. If the councils are to be retained, clearly reform is needed. There is evidence of an alarming level of underpayment, and the “policing” system faces acute difficulties — not least a reduction of one‐third in the number of inspectors. In this special feature, Susan Shaw examines the arguments for abolition, retention, or reform.

Citation

Shaw, S. (1984), "Wages councils: Should they be reformed or abolished?", Retail and Distribution Management, Vol. 12 No. 6, pp. 8-12. https://doi.org/10.1108/eb018249