ABSTRACT
This chapter presents an analysis of problems connected with inflation and anti-inflation policies which face pay negotiators and policy-makers by focusing on one aspect of pay policies, namely that of pay increases and pay negotiations. Percentage increases pose equity as well as conversion problems by awarding higher amounts to high income earners than to low income earners. The individual's perception of the adequacy or inadequacy of the pay increase was found to be closely associated with the amount of the pay increase but not with his income level. The free collective bargaining battle for more money became linked to union protests against these demands; the 'going rate' was demanded without concessions. All our surveys have highlighted that there can be serious communication problems between politicians, economists and the ordinary citizen. Inflation and anti-inflation measures and the way they are handled can seriously damage the quality of industrial relations and the industrial relations climate and can thereby worsen the economic situation.
