ABSTRACT
In conventional economic theory, wage determination and labor allocation occur simultaneously as part of the operation of the competitive labor market. In the internal labor market these two activities should also be connected, although administrative rules and custom, as well as economic forces, should presumably govern this relationship. For example, wage rates should, at least in principle, influence the movement of labor among the ports of entry in different enterprises, even when most jobs are removed from external competition by internal promotion arrangements. One would also expect the internal allocative process to carry implications for the wage structure within the enterprise. Although wages were not the central focus of the studies from which this volume derives, these expectations were, in fact, borne out by the comments concerning wage determination made by numerous respondents during interviews. Thus, although not under direct investigation, a picture did emerge of the wage determination process in manufacturing.
