The way to industrial peace and the problem of unemployment

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INDU ill

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THE WAY TO INDUSTRIAL PEACE :

I. THE CAUSES OF DISCONTENT . . I

II Can Industry Support Higher

WAGES ?

OUR analysis of the general discontent in the world of labour has shown that below the varying reasons for which men laid down their tools, there was one great spring of action, the claim to a fuller share in the good things of life. Many of the grievances which have now driven men to face starvation rather than bear them any longer are of old standing ; something more was needed to fan the spark of discontent into the flame of insurrection. This new factor, as we have seen, is to be found in the realisation of the fact that the standard of wages was stagnant, if not actually retrogressive, at a time when the wealth of the nation was progressing by leaps and bounds. The question then which most concerns us, viewing the industrial unrest from the point of view of the nation rather than from that of any particular interest involved, is : Can industry, generally speaking, support the higher wages which are demanded by the workers ? If it can, by what means is the worker to obtain them ? If it cannot, what is to be the outcome of his demand ?

Low WAGES AND PARASITIC INDUSTRIES.

That demand may be resisted on the ground that it is unjustified, and that its satisfaction would give the workers more than a fair share in the total product of industry. Or it may be resisted because industry as a whole is not productive enough to allow the payment of higher wages — in other words, because the payment of a higher wage would wreck it. There are industries in every country, which are parasitic upon the life of the nation, since it is only by underpaying the workers that they continue to exist, and it is time for us to ask how they became a part of our industrial life, and whether we can afford to retain them for ever in our midst. Low wages, however, do not always mean that the industry concerned is unproductive, nor that capital or land take an undue share of its output. They may be due merely to custom, including a standard of life among the workers which is habitually low. The facts which have been brought to light in recent investigations of " sweated industries/' for instance, show clearly that the sheer passive resignation of men and women workers, too poor, too ignorant, or too lacking in self-reliance to combine in demanding better conditions is accountable for many a starvation wage. We see this also in the remuneration of agricultural labourers in many counties of England, where wages below 155. a week for adult male labourers, including all allowances in kind, are quite common. It is certain that insistence upon a living wage for workers in such cases is to the national advantage, since it requires merely a break with a bad tradition, which is not founded on economic necessity. But something more will have to be said on this point.

INCREASED WAGES AN ECONOMY.

Where competition is keen, it is often assumed that to raise wages would mean a heavy handicap to the industry concerned. As a matter of fact, however, there is overwhelming evidence that except in a small number of unimportant industries low wages are not economical. ' Labour may be plentiful and cheap/' says Arthur Shadwell, in his work on " Industrial Efficiency," " but it may be bad economy to buy it cheap. For what an employer wants is not labour but the result of labour, and if he buys too cheap he will not get it : just as a man who buys a coat may buy it too cheap. Cheap labour may be dear through want of capacity or of will. The former is generally recognised, but the latter is often overlooked. Wages are the incentive to work, and must be adequate to produce it.' This holds good of every grade of labour, though in the case of the most poorly paid the effect of improvement is, naturally, the most striking. For here an addition to the wage will often result not merely in greater loyalty and a keener application to work, but in mental and physical efficiency that were previously lacking, owing to malnutrition.

Economists have long perceived that low wages do not pay the industrialist. Comparisons of the industrial conditions in different countries show this very clearly. Dr. Schultze-Gaevernitz, for instance, in a comparison of conditions in the cotton industry in England and Germany, says : f In England the operative minds nearly double as much machinery as in Germany. The machines run quicker, the loss compared with the theoretical capacity is less. In the latter respect it is to be borne in

mind that in England, doffing and filling I.P. c i8 WAY TO INDUSTRIAL PEACE

with bobbins takes place in a shorter time, breaking of ends occurs more seldom, and the placing of broken threads requires less time. From these it results that the cost of labour per pound of yarn — especially if the overlooking is included — is in England decidedly less than in Germany. The wages of the English spinner are nearly twice as high as in Germany, and the hours of labour a little over nine hours compared with eleven to eleven and a half in Germany ."

THE EMPLOYERS' EQUIPMENT.

Other employers, unable to increase the speed of production in this way, will find economies in better technical equipment. " British manufacturers of the articles in the production of which American competition has been felt," says Lord Brassey, " have directed their attention too exclusively to mere economy, to reducing the price of labour and to administrative details : their ingenuity has not been sufficiently exercised in the technical branch of their business, in the improvement of patterns and the quality of their goods. "

It is a general experience that the inventiveness of manufacturers increases pari passu with the price they have had to pay for labour. The employer who can obtain his " hands " at a low wage without the slightest difficulty is often content to run his business on antiquated methods of production and of management, and is eventually outrivalled, and possibly ousted from the market by competitors who have to pay more for labour but who are shrewder and more vigilant. For a time, no doubt, the inefficient manufacturer may be protected against his rivals by import duties upon his products, which reserve the home market for him, just as, for a time, the inefficient worker may be protected by trade union regulations limiting the productivity of labour in a particular industry. But ultimately all such artificial supports and restrictions are bound to break down.

Employers, then, must be compelled to

C 2 abandon the false economy of low wages, and the nation need not distrust movements which strengthen the economic position of the workers when bargaining for the price to be paid for their labour.

THE SAFEGUARDS FOR CAPITAL.

The reader may fear, however, that such a state of things would be fraught with danger, since the demands of the workers might become so exorbitant that the other factors in production would be inadequately rewarded, and would withdraw from the industry. Let me therefore hasten to add that taking any one industry as a whole, trade unions cannot force employers to pay workers more than they are worth. They can only urge their demand up to the point at which the investment of capital in the industry ceases to be attractive. This point may be reached all too soon, where the margin of profit is narrow and competition is keen : it may be remote where profits are high, and even with a much higher cost of production the industry would attract capital. Whether a concern pays a dividend of 20 per cent, or of 18 per cent, will hardly affect the ease with which capital can be obtained. If, however, the demand of the workers were quite out of proportion to the possible economy through better organisation or the employment of fresh machinery, the inevitable result would be to drive capital into other fields. If the process were a general one, affecting many industries in the country, capital would be driven into foreign investments. The result at home would be a lessened demand for labour all round, and widespread unemployment which would, if long continued, break up the unions. Thus, since capital cannot be forced to accept a lower interest than that which, considering differences in risk, it could obtain from foreign investment, there is an effective check to the demands of labour.

Undoubtedly the enforcement of the demand for higher wages will crush out some employers either because they lack organising ability or the capital necessary to purchase up-to-date machinery — possibly, too, some exceptional trades, which depend for their very life on sweated labour, may have to go. This is part of the price which the capitalist class will have to pay for economic progress — a price which, viewed from the national standpoint, will probably be much more than counterbalanced by the improved standard of living among the workers.

How ADVANCED WAGES WILL COME.

The workers, too, will have to pay their price for economic progress, for, undoubtedly, the raising of wages will lead to temporary dislocations in industry — in the course of which some men, chiefly the older and least adaptable, will find themselves stranded. While, as we have seen, there is an automatic check to the demands of the workers — a check which will be reached at different points in the various industries

— there is no reason to anticipate that their demands will as a rule be impossible or unreasonable. The most surprising feature of the situation to-day is the patience of the workers.

And it is not merely for sentimental but for sound economic reasons that we must sympathise with their desire for a larger share in the product of labour. A more equal distribution of wealth, while lessening the burden upon those who now bear the largest share in national expenditure — the hard-working middle classes — would also secure for our national industries the best possible market. For the most favourable commercial treaty could not open such a stable outlet for goods as that of a large mass of well-paid industrial workers at home. As a nation we have yet to realise the fact that a high standard of living among the workers is the surest safeguard against the trade fluctuations and crises that wreck so many a business concern.

Ill

"WHEN the hours and general conditions of labour are such as to cause great wear and tear of body and mind, and to lead to a low standard of living : when there has been a want of that leisure, rest and repose which is one of the necessaries for efficiency : then the labour has been extravagant from the point of view of society at large, just as it would be extravagant on the part of the individual capitalist to keep his horses or slaves overworked and underfed/' Thus Professor Marshall summarises his condemnation of excessive working hours. In spite of great provocation during recent years, the hours of work in many of our staple industries are still so long that adequate " leisure, rest, and repose ' are unknown to millions of workers. In this respect the conditions of the best paid and best organised classes of workers are not, as a rule, markedly superior to those of the lower grades. From the trade union returns received by the Board of Trade, for instance, it appears that for those whom we are apt to regard as the elite of the workers, the " eight hours day " is still a remote ideal. According to the Report of the Board of Trade, on Earnings and Hours of Labour (1906), the average hours of labour in a full week exceed 53 in the following trades : Bricklaying, decoration, painting, excavating, iron, pig iron, and steel making, engineering, and boiler making, railway carriage and wagon building, manufacture of light castings, wire drawing, gold, silver, and electro-plate manufacture, cycle making and repairing, farriery and general smith's work, lock, latch, and key making, clock and watch making and repairing, all the textile trades, dress and millinery (workshop), bespoke tailoring, bespoke and readymade boot and shoe making, furriery, silk, felt and straw hat manufacture, laundry (factory), saw milling, machine joinery, cabinet making, and many other trades and public services. Since the Saturday half-holiday is practically universal in this country, the daily number of hours given to work by these skilled and well-organised workers from Monday to Friday is therefore nine or ten. On the railway, certainly, the long working days of certain classes of employees (on the average 58 hours for sixday workers and 65 hours for others) are subjected to a fierce public criticism, when the investigation of an accident shows for what excessive periods engine-drivers or signalmen are expected to remain active and alert.

RECENT CHANGES.

Considerable improvement has already taken place. During the ten years, 1903 to 1912, there has been an almost uniform tendency to reduce the hours of labour in the classes of workers reporting changes in this respect to the Board of Trade. For all trades, excluding agricultural labourers, seamen, and railway servants, the number of men affected by decreases during this period was 1,059,926, while that affected by increases was only 29,981. For different groups of industries, the changes were as follows : —

Number of Workpeople affected by Decreases and Increases of the Hours of Work.

Decrease. Increase.

and Shipbuilding . 48,449 13,204

Textile Trades . . 24,590

Clothing Trades . 53,743 221

Miscellaneous Trades . 92,906 187

Employees of Public Authorities . . 46,788 1,527

None of these changes, as far as I know, have been due to legislative action.

I The reduction of hours of work, even more obviously than the increase of wages, benefits not only the employee but the employer, and that is why it has so frequently been accomplished without friction. Additional opportunities of rest and of mental and physical recreation almost immediately result in greater efficiency. Numerous instances might be given in which the payment of a higher wage per hour for shorter working days has increased the productivity of the men. Mr. Shadwell, in his careful comparison of working conditions in the United States and in England, has come to the conclusion that, taken all round, the American workmen with shorter hours than their British colleagues work very much harder. He also points out that the Italian navvies, who are sometimes said to work as hard as British ones and for longer hours at a stretch, do not, as a matter of fact, get through more work.

EFFECT OF SHORTER HOURS.

Physiologists have pointed out that, generally speaking, short hours and hard work exhaust the body less than long hours and less energetic application, though the total output of work may be the same. This is the case, especially, where work takes place in the heated or contaminated atmosphere which is inevitable in so many of our staple industries.

But physiological effects apart, can we doubt that the additional leisure and recreation will affect the worker's interest in his occupation, his mode of life, and the whole of his mental horizon, making him both a better worker and a better citizen ? In a close study of industrial conditions in Belgium, I was struck with the fact that where the conditions of work were most oppressive, the hours longest, and the opportunities for wholesome recreation least frequent, there was also the greatest apathy on the part of the workers. There intemperance was most prevalent, and there the whole standard of comfort was lowest. A similar study in other countries would undoubtedly reveal similar conditions.

It would be futile, however, to infer from 1 such facts that the reduction of the working 1 day to, say, eight hours in every industry, and under all circumstances, must necessarily be beneficial to employers and employed alike. In some occupations, as Mr. Shadwell points out in his summary of his own observations in different countries, the productivity of labour per hour could not be substantially increased by any addition to the physical or nervous reserve of the workers, and the loss of output through a reduction of hours would have to be made up by other economies where these are possible. " Probably no one will seriously deny/' he says, " that hours of work may be too long or too short. They may be too long because human nature has limits, as the saying goes : rest and recreation are physiological needs : the brain cells, which are the motive power of all action, become exhausted, and faculties fail after a time, with the result that bad work is produced. They may be too short, because the power present is not fully utilised, with the result that insufficient work is produced : in the end it would be bad work too, for powers disused atrophy, and the less people do the less they can do."

THE MODE OF REDUCTION.

In determining the effect of shorter hours upon the efficiency of the workers, much will depend on the mode of reduction. There are some who contend that it would be best to leave the hours of working days much as they are and give the workers greater leisure at the week-ends, say a whole holiday on Saturdays and a half holiday on Mondays. Others would prefer to see a reduction or absolute abolition of working hours before breakfast, while others expect most benefit from a shortening of hours in the evening. These are questions which only those engaged in different industries, as employers and employed, can decide. There can be no doubt, however, that only by adding to the leisure hours in such a way that they can be profitably employed will the change really benefit the individual and the nation. To many workers, for instance, an additional hour's rest during the dinner-time, while agreeable in itself, would not give such an opportunity for real recreation as an hour added to those spent at home in the morning or evening. In our large towns, especially where many workers live too far from the premises to go home for their midday meal, an additional hour in the middle of the day might lead to unprofitable expenditure of time and money rather than to physical or moral development. On the other hand, I know well what an additional hour a day represents in health and pleasure to many a man who cultivates a garden or an allotment. Such pursuits apart, that hour may stand for a richer home life, for reading, or attending classes, and make the worker happier and better as an individual and more valuable as a citizen.

" I am not surprised/' a clergyman recently said, " that the attendance of men at divine worship is so small. With ten hours of work every week-day, a passion for ennobling thought on the seventh day can hardly be expected. What wonder if the men are too tired to take an interest in their own souls/ Thus, from the moral, no less than from the economic point of view, the question of hours of labour is one of vital importance. The man who is too tired to exert himself at all on the days of rest is also too tired to interest himself in questions affecting his physical welfare and that of his family and fellow-citizens. He is apt to become a mere drudge, content to drift on the stream of life, unable after some years thus spent to arouse himself to decisive action to overcome any temptation that may assail him, to apply his

LP. D thought to art or literature, or even to follow intelligently the political happenings of the day.

A SAVING IN HOUSE RENT.

Take merely one important effect of the reduction of the hours of labour upon the life of the nation. For this alone, if for no other, it would be worth our while to further, in every possible manner, the movement for a reasonable shortening of the working days. I refer to the possibility which it opens out for housing a much larger proportion of the population in rural and semi-rural neighbourhoods — by giving them time to travel further to and from their work. It is a matter of supreme importance, not merely from the point of view of health, that the crowding of the population into the large cities and industrial centres should be arrested. One of the greatest obstacles to the economic progress of the working-classes to-day is the large proportion of their income which is absorbed in rent ; and it is unduly large because so many of them are horded within easy reach of their place of work. Their crowding on a limited area, in addition to all the physical and moral degradation which it involves, forces up land values and rents. No blame necessarily attaches to the landowners who appropriate these increments. If the whole of the land were nationalised, the higher value which it derived from its proximity to industrial premises would still remain a fact. The only means of equalising the value of land in town and country, lies in the decentralisation of our industrial population. Not only will the saving in house rent improve the position of the worker, but he will live in a more wholesome environment, away from the demoralising and depressing atmosphere of the overcrowded town area : he will have a garden to cultivate, and a better chance to bring up his children to healthy and strong manhood and womanhood. The housing

D 2 accommodation in the centre of towns, too, would become more adequate, and rents would fall for those workers, casual or regular, who owing to the nature of their occupations are obliged to reside close at hand. But the two reforms must go together : decentralisation and reduction of the working day.

IV The Problem Of Casual Labour

IF the condition of labour is really to be improved and the prevailing discontent banished, it is absolutely essential to solve the problem of casual labour. No statistics are available as to its magnitude. We do not even know whether the number of persons intermittently employed, though capable of regular work, has recently increased or decreased, though a general survey of industrial conditions seems to indicate an increase during the last twenty or thirty years.

DIVERSE DIFFICULTIES.

In theory we must distinguish between those who wish for regular work but are unable to find it, and those who do not wish for regular work of any kind — the " work-shy." Yet, in practice, these classes merge into one another, and often only a close analysis of a man's character and career can determine to which he belongs. Each class again includes a variety of types which have little in common beyond the fact of their inability to work regularly throughout the year. Thus we have men engaged in the building trades, whose work must be largely conditioned by the weather ; we have men who depend exclusively on one form of employment, such as dock labourers, and others who will accept many kinds of employment, though chiefly depending upon one. Then there are men who habitually interchange different casual or seasonable employments, the ' f summer ' porter who in winter is taken on at the gasworks, the navvy tramping from one public work to another, the man who turns his hand to almost anything, and in addition, perhaps, keeps a small shop with the help of other members of his family, the hawker who will leave his hand-cart at home if he can get something better to do, and many other types. No single panacea will help all these people out of their diverse difficulties.

But as a class the unskilled casual workers in our towns, especially where they congregate in large numbers, tend to lower the general standard of life. Not only will the casual, whether or no he is anxious for regular work, often lower the price of labour, but he will generally be content with conditions of housing and environment far below those which can be accepted as the minimum by the community as a whole. Irregularity of income, too, makes for an irregularity of expenditure, in which positive extravagance alternates with starvation. It is an economic condition which encourages disease, and which well-nigh excludes the possibility of a healthy family life and a high level of morality. Casual labour of course is not confined to the slum, but it is in the slum that its evil effects are felt most strongly, and that we are forced to realise the national problem it presents. We shall here consider, not the skilled workman whose work is intermittent, and whose wage is affected by that fact, but the rank and file casual.

Two CAUSES.

Casual labour may be due to two causes, an over-supply of labour varying in extent, or an established tradition in certain industries. In the first case it forms part of the general problem of unemployment, and must be considered along with other evils arising from fluctuations in the labour market. Where it is due merely to custom, it may be simultaneous with brisk trade activity, and remediable simply by a change of organisation. Usually both causes are effective in one and the same industrial area. In York, for instance, a city of 82,000 population, in the summer of 1910, at a time of industrial activity, I found that the actual number of casual workers was probably about a thousand, not counting those engaged in the building trades and those who through physical disability or an abnormal antipathy to work might be counted as " unemployable/' Many of them were respectable working men, who for one reason or other could not be sure of regular work. It is, of course, impossible to estimate the extent to which they might, with proper organisation, be absorbed in regular occupations. That many of them at the time were more or less inefficient there could be little doubt, but very often, as the study of their past careers showed, the irregularity of their employment was directly responsible for their deterioration in physical strength, in ability, and in character. Since the problem of the unfit will be considered in a later chapter, I will not here discuss the process of deterioration. I will rather endeavour to show that the continual descent of men from the status of regular workers, through the stage of casual employment, into the final abyss of unfitness, can be arrested by a better organisation of the labour market as a whole, and of certain industries in particular.

The notion that it pays an employer to have a margin of unemployed men continually hanging around is, to begin with, one which has come to us from an older school of economists, who stood too far aloof from the concrete life of the people with its human relationships and human careers. Only in theory can it benefit an employer to limit his regular staff to the very minimum, to take on additional " hands " just when they are required, not a day sooner, and to dismiss them as promptly when the stress is over. In practice it pays to take trouble and to incur some slight expense in so organising an industry as to increase to its utmost limits the proportion of regular workers, and correspondingly to decrease the proportion of casuals ; for the work of the former is almost always better than that of the latter. Only under particular conditions, such as prevail, for instance, in the building industry, or in public works, is the output of regular and of casual workers nearly equal ; and even here shrewd employers try to keep the largest number of selected permanent men that their business will justify.

DECASUALISING DOCK LABOUR.

Some large employers are beginning fully to recognise the superior efficiency of regular work, and are systematically endeavouring to co-ordinate the demand for workers within their own business, shifting men from one department to another as they are needed, instead of engaging large numbers irregularly throughout the year. From my own experience as a manufacturer, I can testify to the great advantage of this method from the employer's point of view. For the added trouble and thought which it involves he will be more than rewarded by the increased efficiency and loyalty of the workers. Where many employers in the same closely allied industries have a fluctuating demand for workers, unless their demands for extra labour coincide, the organisation of exchange is comparatively easy. Thus at the London Docks, and more recently at those in Liverpool, an interesting system is being evolved for decasualising dock labour. The magnitude of such a task is illustrated by the case of Liverpool. Here Mr. R. Williams on one occasion ascertained that although the shipping trade as a whole did not at the busiest time require more than 15,000 dock labourers, the actual number of men intermittently employed as such in the course of the year was 27,000. It is obvious that the existence of so large a reserve, while not apparently costing the shipowners a penny, must react very unfavourably upon their business by its severe drain upon the prosperity of the city. What is being done at the London and Liverpool docks to decasualise the workers is possible also to a varying degree in other towns and in other industries.

But when individual employers and groups of employers have done their best, there remains a margin of casual workers which can be regularised only through and by the National System of Labour Exchanges. Whether it will be necessary, as some suggest, to make the engagement of casual workers through a labour exchange compulsory upon employers will be seen when these institutions have been at work for a few years. But already an effort is being made to decasualise labour, to give the available jobs as far as possible to a comparatively small number of good workers rather than to distribute them evenly over all applicants for casual work. Such a policy alone can solve the problem of casual labour with all its attendant evils. It would chiefly, of course, affect unskilled labourers, though much can also be done to decasualise the employment of skilled workers by enlarging the sphere of their search for work, and helping them to dovetail work for different employers so completely that practically all their time is occupied.