ABSTRACT
Prior to the post-war period, wage settlements were often devoid of fairness influences, that is, of any adjustment in money wage settlements to protect real and relative wages. I The inferior bargaining position of labor allowed employers to present a "take it or leave it" money wage offer, with wage fluctuations largely reflecting overall economic conditions. With the rising power of labor in the period following the Second World War, settlements that protected real and relative wages became important goals of labor and were recognized as a legitimate part of wage negotiations by employers. The inclusion of the expected rate of inflation in the money wage equation is a recognition of this legitimacy.2 However, it is reasonable to assume that fairness considerations are less enforceable in wage settlements when labor markets are slack.
