When the Board decision was finally handed down among growing unrest, it made a radical break from indexation, establishing a system based on firm capacity to pay and
productivity bargaining. The Board resolved the conflict between its social and economic responsibilities by advocating a two-tier system, with a substantial drop in the minimum wage.
Federal Sector
Productivity Bargaining For Competitiveness
In the 1970s the basic wage applied to low income workers only and in the 1980s it was rejected in favour of
productivity bargaining; 1987 saw the Restructuring and Efficiency Principle and 1988 brought the Structural Efficiency Principle.
It used to be called
productivity bargaining. Nowadays, it goes by the name of modernisation.
In the early 1970s, for example, New York State engaged in
productivity bargaining with the Civil Service Employees Association.
McCarthy (1971) pointed out the belief that established negotiating procedures could be changed in a planned and purposeful way, and this developed to some extent with the spread of
productivity bargaining in 1965-1968.
It will be essential that
productivity bargaining facilitates genuine productivity gains and that some of these gains be reflected in higher profits and lower prices (or lower prices increases) as well as in higher wages.