The Regulatory Process and Labor Earnings

The Regulatory Process and Labor Earnings focuses on one form of government intervention in the marketplace—state regulation of public utilities. This book provides the most comprehensive study of labor costs in a regulated industry and includes a summary of a major econometric study. This text addresses a number of related issues, such as the effect of regulatory process to the structure of collective bargaining and labor earnings in regulated industries, legal rights of state utility commissions to deny proposed rate increases that are based on excessive upturns in labor cost, and incentive schemes that can be used to encourage public utilities to hold down labor and non-labor cost increases. This publication is a good reference for students and individuals involved in the regulatory process.

Preface

Acknowledgments

List of Figures and Tables

1 Introduction

1.1 The New York Telephone Company Case

1.2 The Regulatory Process and Labor Earnings: Issues

1.3 Outline of the Study

1.4 The Effect of Regulation on Labor Earnings: Theory and Empirical Evidence

1.5 The Regulatory Process and Labor Earnings: Current Practices

1.6 The Regulatory Process and Collective Bargaining in the Telecommunications Industry

2 The New York Telephone Company Case: A Case Study of Wages in a Regulated Industry

2.1 Introduction

2.2 Detailed Occupational Earnings Comparisons as of 1975 and 1976

2.3 Detailed Annual and Hourly Earnings Comparisons That Control for Personal Characteristics

2.4 Analyses of Earnings Growth of New York Telephone Company Employees and other Employees in New York City and State, 1969-1976

2.5 Nonwage Compensation and Labor Turnover

2.6 Summary and Implication for Future Studies

3 Conceptual Issues and Criticisms of the Study

3.1 Introduction

3.2 The Rights of Workers and the Legality of Commission Intervention

3.3 Issues in the Determination of the Appropriate Standard

3.4 Conceptual Issues: Wage and Salary Survey Comparisons

3.5 Conceptual Issues: Census Comparisons

3.6 Concluding Remarks

4 Labor Costs in Regulated Industries: Policy Options

4.1 Introduction

4.2 The Effect of My Study

4.3 Should There Be Commission Reviews?

4.4 Incentives for Utilities to Limit Cost Increases

4.5 An Agenda for Policy

Appendix A Models of Regulation

A.1 "Operating Ratio" Regulation (Section 1.4)

A.2 "Rate-of-Return" Regulation (Section 1.4)

A.3 Limitations on Wage Pass-Throughs and Overcapitalization under Rate-of-Return Regulation (Section 4.3)

Appendix B Sample Sizes "Necessary" to Obtain Statistically Significant Estimates of Telephone Industry Earnings Differentials

Appendix C Estimates of the Relationship between the Interest Rates Paid By Utilities and Their Profit Rates and Coverage Ratios

Bibliography

Index