ABSTRACT

The impact of modern technology on skills and control is intimately connected with its impact on labour turnover and wages. In the textile industry, it certainly kept wages from rising in any significant way, even though substantial modernisation of equipment occurred and even though considerable gains in labour productivity were achieved. Easy substitution of labour exercises a downward pressure on wages. Advanced technologies create circumstances where the increased reliability and commitment obtained by offering conditions of labour above the supply price is worth more to the employer than the cost of doing so. The higher wage, which one could call the reliability wage, has as its essential feature that it is endogenous to the firm and technology related and that it cannot be explained by exogenous factors such as imperfections in the labour market.