GUARANTEED WAGE PLAN

system by which an employer assures a minimum annual amount of employment or wages or both to employees who have been with the firm for a minimum required period of time. The United States has had more experience than other countries with such plans, which have as their purpose the elimination of the adverse effects of fluctuating employment on living standards. Many plans have been short-lived; they seem to have been most successful in consumer goods industries, which are affected less by fluctuations in the economy. When such plans were introduced in the late 19th century, they were usually undertaken unilaterally by employers. They were extended on an informal basis to a few selected employees to whom they guaranteed a minimum amount of employment. The plans received some support during the 1930s, when governments tried to encourage them indirectly through labour legislation. In the postwar years, guaranteed wage plans reemerged as elements in labour's collective bargaining proposals. Trade unions viewed them as a means of shifting the risk of unemployment from the worker to the firm. During the 1950s, such plans were favoured not only as a protection against seasonal fluctuations in employment but also as a means of moderating the introduction of automated equipment. Later plans provided for the integration of payments by private employers with public unemployment-compensation benefits.