A major objective of the government during the Great Recession has been severely to restrict public sector real wage growth. One potential advantage of performance-related pay schemes is that they naturally offer greater wage responsiveness to fluctuations in the business cycle. Based on evidence from engineering and allied industries during the Great Depression we show that piecework wages exhibited more flexibility than their timework equivalents. We compare and contrast southern/midland engineering districts of Britain with northern districts. The former region was dominated by piece-rated workers and by modern sections of the industry, such as vehicle and aircraft manufacture. Time-rated work predominated in northern districts where older sections – for example, marine and textile engineering – were clustered‥

This article considers the hypothesis that ‘older people in full-time employment normally receive earnings below the level previously enjoyed’, by examining the money and real earnings of older British full-time employees as they age. After a review of the factors that influence earnings, data from the New Earnings Survey of Great Britain are used to estimate average gross weekly money and real earnings of two cohorts of manual and non-manual workers as they age. The two cohorts were born respectively in 1927 and 1937, and male and female employees are considered separately. The estimates are used to develop time series age-earnings profiles of real earnings. These suggest that the average full-time older employee normally benefits over time from rising real earnings as a consequence of increases in national prosperity, although the increases vary by gender, occupational group and cohort. Older female employees benefited more than males from significantly higher percentage increases in their average real earnings, and between 1981–2000 average real earnings in non-manual occupations rose relative to manual workers' earnings.