incomes policy
C1/C2Formal, Technical, Economic/Political
Definition
Meaning
A government's set of rules or laws aimed at controlling or limiting increases in wages, salaries, and other forms of income to manage inflation.
A broader macroeconomic strategy, often part of a prices and incomes policy, involving guidelines or legal restrictions on pay rises, sometimes including dividend controls and price freezes, implemented during periods of high inflation.
Linguistics
Semantic Notes
The term is usually used in the plural ('incomes policies') when referring to different historical instances or types. It is a compound noun treated as a single concept. It often carries a connotation of being a temporary, interventionist measure rather than a permanent feature of economic management.
Dialectal Variation
British vs American Usage
Differences
The term is understood and used in both varieties, but has stronger historical association with post-war UK economic policy. In the US, similar concepts might be referred to as 'wage and price controls' or 'wage guidelines'.
Connotations
In the UK, it often evokes memories of the 1970s economic crises and confrontations with trade unions. In the US, it may be associated with the Nixon administration's economic measures in the early 1970s.
Frequency
More frequent in UK political and historical discourse. In contemporary American economic discussion, the term is less common than more market-oriented terminology.
Vocabulary
Collocations
Grammar
Valency Patterns
The government [verb: introduced/implemented/enforced] an incomes policy.The [adjective: statutory/voluntary/failed] incomes policy [verb: aimed to/helped to/collapsed].Vocabulary
Synonyms
Strong
Neutral
Weak
Vocabulary
Antonyms
Phrases
Idioms & Phrases
- “[Not applicable for this technical term]”
Usage
Context Usage
Business
Discussed in relation to labour costs, profitability, and strategic planning during periods of government intervention.
Academic
A key term in macroeconomic history, political economy, and industrial relations studies.
Everyday
Rarely used in casual conversation; appears in news reports about economic history or severe inflation crises.
Technical
A specific term in economics and public policy denoting direct government intervention in wage-setting processes.
Examples
By Part of Speech
verb
British English
- The Chancellor is considering re-imposing an incomes policy to curb inflationary expectations.
- They debated whether to incomes-policy the public sector more strictly than the private.
American English
- The administration discussed whether to incomes-policy key industries.
- Historically, few presidents have chosen to incomes-policy the entire economy.
adverb
British English
- [Not standardly derived]
American English
- [Not standardly derived]
adjective
British English
- The incomes-policy era of the 1970s left a lasting legacy on industrial relations.
- They faced an incomes-policy dilemma.
American English
- The wages were subject to incomes-policy restrictions.
- An incomes-policy approach was deemed necessary.
Examples
By CEFR Level
- [Not typically introduced at this level]
- The government has a new policy for wages. It is called an incomes policy.
- An incomes policy can help stop prices from going up too fast.
- During the economic crisis, the government introduced a strict incomes policy to limit pay rises.
- Many economists argue that an incomes policy is only effective as a short-term measure against inflation.
- The statutory incomes policy of the mid-1970s led to significant industrial unrest as trade unions resisted enforced wage limits.
- Critics of interventionist economics contend that any incomes policy distorts labour markets and ultimately proves unsustainable.
Learning
Memory Aids
Mnemonic
Think of the government putting a 'policy' cap on people's 'incomes' to stop them rising too fast.
Conceptual Metaphor
INFLATION IS A DISEASE, AN INCOMES POLICY IS A TREATMENT/PRESCRIPTION. THE ECONOMY IS A MACHINE, AN INCOMES POLICY IS A CONTROL LEVER.
Watch out
Common Pitfalls
Translation Traps (for Russian speakers)
- Avoid direct translation as 'политика доходов', which is broader and can mean general social welfare policy. The correct equivalent is 'политика регулирования доходов' or 'политика контроля над заработной платой'.
- Do not confuse with 'tax policy' (налоговая политика).
Common Mistakes
- Using it as a countable noun without 'an' (e.g., 'Government implemented incomes policy'). Correct: 'implemented an incomes policy'.
- Confusing it with 'income policy', which could imply policy regarding sources of income rather than control of its growth.
- Using plural verb with the singular compound noun: 'The incomes policy are...' is incorrect. It should be 'The incomes policy is...'.
Practice
Quiz
An 'incomes policy' is primarily concerned with:
FAQ
Frequently Asked Questions
No, they are different. A minimum wage policy sets a floor for the lowest legal wage. An incomes policy sets a ceiling or limit on how much wages can increase, usually across the economy, to control inflation.
Yes, incomes policies can be statutory (enforced by law) or voluntary (based on government guidelines and social partnership, where employers and unions agree to adhere to recommended pay limits).
They are controversial because they involve government intervention in free wage bargaining between employers and employees/unions. This can be seen as infringing on market freedoms and can lead to industrial disputes if workers feel their pay is being unfairly held down.
Incomes policies were most prevalent in many Western economies during the 1960s and 1970s, a period characterised by high inflation and powerful trade unions. Their use declined from the 1980s onwards with the rise of monetarist economics which favoured controlling inflation through interest rates rather than direct wage controls.