Theory of wage policy

In this penetrating essay an eminent economist looks afresh at fundamental concepts of wage policy in the context of an underdeveloped economy. Discussions on wage policy generally hinge on considerations of industrial relations, lip-service being paid to the needs of economic development. This study adopts a 'growth approach' as distinct from the 'industrial relations approach', recognizjng however that the two are not altogether incompatible. The crucial problem in adopting a growth-oriented wage policy is doubt whether a wage structure can be evolved which will induce labour to give of its best and yet generate adequate investible surplus to sustain a desirable rate of growth and minimize unemployment. In this closely- reasoned study of this question, crucial to developing countries. the author convincingly shows that such a wage structure is desirable and also feasible. provided it is a part of a general incomes policy reorienting the entire structure of income-distribution.