Hostname: page-component-848d4c4894-pftt2 Total loading time: 0 Render date: 2024-05-01T00:11:53.245Z Has data issue: false hasContentIssue false
  • English
  • Français

Employment and Real Wages in the Inter-War Period

Published online by Cambridge University Press:  26 March 2020

N.H. Dimsdale
N.H. Dimsdale*
Affiliation:
The Queen's College, Oxford
Get access Rights & Permissions [Opens in a new window]

Extract

There was a wide measure of agreement that unemployment in Britain during the 1920s was aggravated by lack of international competitiveness. This was the basic issue underlying the debate over the return to the gold standard. The experience of the restored gold standard did much to confirm the arguments of those like Keynes who had claimed that sterling was overvalued at $4.86. This view of the problems of adjustment to an overvalued exchange rate has been endorsed by both Johnson (1975) and Friedman and Schwartz (1963). A major element in competitiveness was the level of real wages. Britain's difficulties in the inter-war period were made more acute by the increase in the cost of labour between 1913 and 1924. This reflected the sharp rise in wages in the First World War and the post-war boom of 1919-20, which was only partly corrected in the recession of 1921-2. The reduction in working hours in 1919, when normal weekly hours were reduced from 53 hours to 47, also raised the cost of employing labour. As a result hourly real wages in 1924 were 28 per cent higher than in 1913 and real wages measured in terms of own product were increased by 20 per cent, while output per head had risen by only 5 per cent over the same period. The increased cost of employing labour was particularly noted and emphasised by Clay (1929).

Type
Articles
Information
National Institute Economic Review , Volume 110 , November 1984 , pp. 94 - 103
Copyright
Copyright © 1984 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

(1)

The author is grateful to Gillian McNamara for computing assistance.

References

Barna, T. (1952), ‘The Interdependence of the British Economy’ Journal of the Royal Statistical Society.CrossRefGoogle Scholar
Beenstock, M., Capie, F. and Griffiths, B. (1984), ‘Economic Recovery in the United Kingdom in the 1930s' in Bank of England Panel of Academic Consultants’ Panel Paper No. 23, ‘The UK Economic Recovery in the 1930s'.Google Scholar
Board of Trade (1940), Statistical Abstract for the United Kingdom 1924-1938.Google Scholar
Bruno, M. and Sachs, J. (1982), ‘Energy and Resource Allocation: A Dynamic Model of the “Dutch Disease”’ Review of Economic Studies.CrossRefGoogle Scholar
Chapman, A.L. and Knight, R. (1953), Wages and Salaries in the United Kingdom 1920-1938, Cambridge.Google Scholar
Clay, H. (1929), The Post War Unemployment Problem, London.Google Scholar
Committee on Finance and Industry, (Macmillan Committee) Report (1931), London.Google Scholar
Devons, E. (1956), An Introduction to British Economic Statistics, Cambridge.Google Scholar
Dimsdale, N.H. (1981), ‘British Monetary Policy and the Exchange Rate 1920-1938’, Oxford Economic Papers Supplement.CrossRefGoogle Scholar
Feinstein, C.H. (1972), National Income, Expenditure and Output of the United Kingdom 1855-1965, Cambridge.Google Scholar
Friedman, M. and Schwartz, A.J. (1963), A Monetary History of the United States 1867-1960, Princeton.Google Scholar
Johnson, H.G. (1975), ‘Keynes and British Economics’ in Essays on John Maynard Keynes edited by Keynes, W. M., Cambridge.Google Scholar
League of Nations (1938), Review of World Trade.Google Scholar
Lewis, W.A. (1952), ‘World Production, Prices and Trade, 1870-1960 ‘Manchester School of Economic and Social Studies.CrossRefGoogle Scholar
London and Cambridge Economic Service (1970), The British Economy: Key Statistics 1900-1970, London n.d.Google Scholar
Mitchell, B.R. and Deane, P.M. (1962), Abstract of British Historical Statistics, Cambridge.Google Scholar
Moggridge, D.E. (1972), British Monetary Policy 1924-1931: The Norman Conquest of $4.86, Cambridge.Google Scholar
Nevin, E.T. (1955), The Mechanism of Cheap Money, Cardiff.Google Scholar
Nickell, S.J. and Andrews, M. (1983), ‘Unions and Unemployment in Britain 1951-79’ in The Causes of Unemployment edited by Greenhalgh, C. A., Layard, P. R. G. and Oswald, A. J., Oxford.Google Scholar
Pigou, A.C. (1929), Industrial Fluctuations 2nd ed. London.Google Scholar
Pigou, A.C. (1931), Evidence to the Macmillan Committee.Google Scholar
Sayers, R.S. (1976), The Bank of England 1891-1944, Volumes 1 and 2 and Appendices, Cambridge.Google Scholar
Sheppard, D.K. (1971), The Growth and Role of U.K. Financial Institutions 1880-1962, London.Google Scholar