Labor differences and their settlement. A plea for arbitration and conciliation

Front matter

LIBRARY OFCONGRESS.

UNITED STATES OF AMERICA.

ECONOMIC TRACTS. No. XX.

Prefatory Note

The Society for Political Education includes in its regular series of tracts papers which it believes to be useful to the people and in harmony with its general line of work, without committing itself to details of argument or of opinion which may represent the individual judgment of the special writer rather than the general judgment of the Committee of the Society.

Copyright, 1886, by Joseph D. Weeks.

Preface

The conclusions presented in the following pages are the results of more than fifteen years' close and careful study of the labor question in two hemispheres. During most of this time I have held such positions as compelled me to be not a looker-on, but an actual participant in some of the most important labor contests that have occurred in this country. I have twice visited Europe especially to investigate the subjects discussed, and have been honored with the friendship and confidence not only of many employers, but of the labor leaders of this country and England. While I do not assume to speak for either employer or employed, it is believed that the views herein advanced, in their general scope, are in accord with those of the most liberal and far-seeing of both.

It is evident to those who have been brought into actual contact with those questions that arise between employer and employed, that the present prevalent hap-hazard method of settling them is not only inefficient but dangerous, and the necessity for some method that shall substitute reason for greed and force is both pressing and importunate. It is believed that under the present constitution of industrial society arbitration presents not only the best, but the only method that gives any promise of success. Whether such changes may not be made in the constitution of industrial society itself as to remove the cause of these differences it is not within the province of this discussion to enquire.

Pittsburgh, Pa., Feb. i, 1886.

CONTENTS fAGK

I

Chapter I. Differences Between Employers And Employed

So long as the present organization of industrial society continues, differences between two of the great classes of which it is made up, employers and employed, will of necessity arise. While it is true that in many of the relations growing out of their association they have a common weal, which in such relations permits of no antagonism, it is equally true that in others their opinions and interests diverge, and differences result. These differences will at times grow into disputes, and may end in industrial strife, that is, in strikes and lockouts. 1 Such contests are

1 Strikes and lockouts I have elsewhere defined as " suspensions of work growing out of differences between employer and employed." A strike is a suspension of work resulting from a dispute originating in some demand of the employed — a lockout, in some demand of the employer. A stoppage of work, for example, resulting from a demand on the part of the employes at a works for an advance in wages would be a strike ; a stoppage resulting from a demand by the employer for a reduction would be a lockout.

It is frequently difficult to determine whether a labor contest should be classified as a strike or a lockout. Practically the distinction is of little importance, except as it bears on the question of the relative tendency of employer and employed to take the initiative in these industrial conflicts. Unless, therefore, it is expressively stated to the contrary, the word strike in this discussion will include both strikes and lockouts.

so fraught with disaster, so full of waste and misery, that, ever since labor became free and wages paid, there has been no small solicitude to discover some speedy and efficient way of harmonizing these differences and preventing them from growing into disputes, or of settling these disputes, if unfortunately they arise, without a massing of forces and the shock and waste of conflict.

The chief causes of these differences are questions as to rates of wages. It is here that the interests of employer and employed begin to diverge, and it is concerning these questions that differences most frequently result in labor contests. In an enquiry into the strikes and lockouts of 1880 made by the writer for the Tenth Census, out of a total of 813 labor contests investigated, 582 or 71.59 per cent, were caused by differences as to rates of wages. 1 Of these 582 contests, 86 per cent, were for advances in wages, and 14 per cent, against reductions. While these exact proportions will not hold in all years nor in all sections and industries, it is true that by far the most prolific sources of labor disputes are differences as to wages. It will also be found upon investigation, that many disputes that are not primarily wages disputes, have a direct bearing on rates of wages, and are important only because of such bearing.

1 The result of this investigation, so far as relates to cause, was as follows :

Per cent. of each Causes. Number. to whole.

Total 813 100.00

Rates of wages ...... 582 7i«59

Payment of wages 35 4.30

Hours of Labor ...... 7 .86

Administration and methods of work . . 107 13.17

Trades-unionism 22 2.70

Miscellaneous . . . . . . . 9 1.11

Not given 51 6.27

Apart from rates of wages the causes of these differences are legion. They may arise concerning the basis of computing wages ; the method, time, or frequency of payment ; apprenticeship ; hours of labor ; administration and methods of work, such as shop rules, laborsaving machinery, piece-work, objectionable workmen, etc. ; trades-unions and their rules, and a thousand and one causes that need not be stated in detail. Nothwithstanding their number, however, it will be found that all causes of difference readily group themselves into three general classes : 1

1 st. — Differences as to future contracts.

2d. — Disagreements as to existing contracts.

3d. — Quarrels on some matter of sentiment.

In this classification the word " contracts " is to be regarded as including not only formal agreements, but those customs of the shop or trade, and those methods of work or of administration which, from long usage, have the force of contracts. In the first division would be classified differences as to future rates of wages, and those arising from attempts to change or abrogate existing agreements, customs, or methods, or to introduce new ones. Disagreements under the second class arise either upon matters of fact or construction, having in view existing agreements, customs, or methods, and not necessarily involving the validity of the contracts themselves, nor any change in their terms. Under the third class are included those quarrels that grow out of the offended amour propre either of the individual or the class.

It is in the first of these classes — " Differences as to future contracts " — which, as stated, includes questions as to future rates of wages, that differences most fre-

1 This is practically Sir Rupert Kettle's classification.

quently occur, and in which there is the greatest difficulty in harmonizing conflicting interests and assimilating hostile views. What is " a fair day's wage for a fair day's work " is a most difficult and complex problem, and yet it is constantly recurring with ever-increasing frequency. Concerning its solution there are honest differences of opinion, not only in individual cases, but as to the basis, the principle upon which it shall be decided. Even when a decision has been reached it is not final and permanent, for the conditions existing when it was framed are not themselves permanent. What may be fair and equitable to-day may be unfair and unjust to-morrow, when the conditions differ from those of to-day. So, with the ebb and flow of the tides of business, of prices and demand, so frequent in these days of the increased effectiveness of labor and rapid transportation ; with the changes in methods of production or conditions of work, and the introduction of methods entirely new, so common in this age of invention, comes an ever-recurring necessity for a revision of the contracts or agreements governing the relation of employer and employed, and with it the possibility of differences as to what changes the differing conditions demand.

Disagreements of the second class relate to what is or has been, not to what shall be, and grow out of differences as to what really is the agreement or contract, or what is the custom of the trade — that is, as to matters of fact or of construction. The parties to a contract, if it is a verbal one, may honestly differ as to its terms ; or as to its construction, if it is a written one. It may be ambiguous or doubtful ; craft or cupidity may have violated it in spirit or letter or both, or it may be transgressed inadvertently. Labor may be performed under some conditions more onerous or more beneficial to one party or the other than those the contract calls for, or under conditions not at all contemplated when the contract was made. There may be a doubt, honest or otherwise, as to just what the custom is under given conditions, but whatever form the question takes, it always refers to work performed or contracts that exist, though the decision may govern work to be done, possibly may re-frame the agreement.

Quarrels growing out of what I have termed ''matters of sentiment " are happily less frequent than formerly. They may precipitate strikes, but labor contests now rarely result from these quarrels alone. Their chief cause is to be found in a failure to recognize fully that the relation of employer and employed is no longer that of master and servant. The employer curtly refuses to submit to what he terms interference or dictation, and the employe hotly and indignantly declines to recognize any Assumption of authority on the part of the employer, or to entertain an idea of inferiority on his own. The interference or dictation may be only a plain, honest assertion by the employe of his own rights ; the act regarded as an assumption of authority an inadvertent one ; but with this old idea of the dominant and servient relation lingering, often unconsciously, in the minds and prejudices of both classes, and with a mutual distrust and suspicion, the inheritance of centuries of conflict still remaining, individuals, and more especially masses, are extremely sensitive to any act or word that in appearance even seems to recognize the existence of the old relations.

It will also be found that these " matters of sentiment," this offended self-respect of the parties to these differences, often defer their settlement, and prolong contests when they arise. The question at issue, which at first may be a simple one, unless some mode of settlement be quickly discovered, becomes a complicated one. Ideas of fairness, generosity, justice, good faith, become involved, and the question assumes new phases, and presents questions that are most difficult of solution.

AND THEIR SETTLEMENT.

Chapter II

SOME CONSIDERATIONS PRELIMINARY TO THE INVESTI- GATION OF METHODS FOR SETTLING LABOR DIFFERENCES.

In seeking methods for the prevention or adjustment of labor differences, the results reached are often worthless or of little value, because the search has proceeded upon assumptions that are erroneous, or that are based upon conditions that do not exist. There is also, on the other hand, a failure or refusal to recognize conditions that undoubtedly prevail, and causes which experience proves are potent within the field of industry. No method for harmonizing labor differences that ignores obvious facts, or that refuses to recognize forces which play an important part in determining and adjusting the relations of employer and employed, can be of any practical value. Such methods, when tried, will either break down from lack of adaptability or from inherent incapacity, or if they act for a time, will fail when the strain for which they were not calculated is exerted.

That notable changes have taken place, especially within the last twenty-five years, in the theories, the conditions, and the relations involved in discussions of labor differences and their settlement, cannot be questioned. The theory of the relation of employer and employed has been recast, and their attitude to each other, and of both to the state and to society, greatly altered. Even the individuals of the class maintain quite different relations to each other, and to the industry as a whole in which they are engaged. Legislative restriction of labor has been abandoned entirely or greatly modified, the laws of conspiracy altered, trades-unions legalized, and the body of labor legislation, beginning with the Statute of Laborers, and covering a period of 650 years, which has been " the effort of a dominant body to keep down a lower class which had begun to show inconvenient aspirations," practically removed from the statute-book. The common-law doctrine of non-restraint of trade and the theory of non-interference with the liberty of the subject have been greatly qualified by legislative enactments, such as the factory, truck, and employers'-liability acts; laissez faire has been degraded from an eternal and inflexible law to a simple rule of conduct that may change with circumstances ; competition has been acknowledged to be imperfect ; combinations are multiplying ; the wage-fund theory has been exploded ; and the economic man discharged from his onerous duties, and one with " sympathies, apathies, and antipathies " employed in his stead. In the face of all these changes it needs no argument to show that the methods of thought and action that prevailed, and assumptions based on the conditions of years ago, are of little value now. He will most assuredly lose his way who attempts to direct his search for methods of adjusting labor disputes by the political economy prevalent a generation since.

On the other hand, he will commit as grievous an error who fails to recognize the new conditions and to frankly accept the limitations and methods which they impose. As a result in part of these changes, as well as of the quicker and broader grasp of the age, the sources of discontent and the causes of difference have greatly multiplied, The problem is assuming greater complexity with every year. As has been pointed out, rates of wages are not now the only subjects at issue. Questions which, under the views held or the conditions that obtained a generation ago, could not possibly have arisen to disturb the relations of employer and employed, are now of everyday occurrence. Production is carried on under different conditions, the rewards of labor are calculated on a different basis, and labor itself holds different relations to production and to the other members of industrial society.

In these changes, as was to have been expected from the fact that it was not its interests which had been consulted in determining previous conditions, and in the adoption of old methods, labor has profited the most. With its growing power and intelligence, with its larger liberty and freedom of action and combination, with the removal of the legislative burdens under which it staggered and the imposing for its benefit of other — not on labor itself directly, but on industry, — and with the abandonment of certain economical theories that rested upon it like a horrible nightmare — illusory, but as dire and distressing as though real, — labor has come into possession of a new and larger life. The old methods of dealing with the questions that affect its interests and relations, or methods that are based upon the old conditions and old views, are no longer effective, nor will they be longer tolerated. No more serious error can be committed in seeking and applying methods for the prevention or adjustment of labor differences than a refusal or failure to recognize, with all it involves, the new relations of labor and the drift of thought and action among working people. Such an error is fundamental and vital, and, so long as it remains uncorrected, industrial peace is impossible.

And yet, through the force of old habits of thought and old methods of action, even among those who ordi-

IO LABOR DIFFERENCES

narily desire such peace, there is a neglect or failure to recognize the new conditions, and to frankly accept the limitations and methods which they impose.

The source of this error is chiefly in the idea, inherited from feudal days and justified by much of the legislation and political economy of modern times, that the employe] is the superior, the employe an inferior ; that it is the right of the former to determine, the duty of the latter to acquiesce. This view does not often express itself bluntly in words, but it does more or less unconsciously in acts. The employer assumes the sole right to determine, and refuses to discuss questions that arise in connection with wages or the details of employment, in the decision of which the employe has an interest equally with the employer, or, if such discussions take place, they are "permitted" ; an interview is "granted." In case of a meeting, the employer assumes the right to dictate its method. " No committee will be recognized." The employer also claims the right, in many cases, to determine the relation an employe shall hold to his fellows, and prohibits his membership in a union. In all of these, and in many similar cases, there is an assumed superiority of condition which does not exist in reality, however much it may be asserted by word or act. The true relation of employer and employed is that of independent equals, uniting their efforts to a given end, each with the power, within certain limits, to determine his own rights, but not to prescribe the duties of the other. The employer has no more right to dictate or even decide how labor shall seek its interests than labor has to dictate to the employer. Whatever may be the views of the latter as to trades-unionism, it will be well, in most cases, especially in great centres of industry or in those employments uniting great bodies of men under one

AND THEIR SETTLEMENT. II

management, if, with the best grace possible, he accept the fact of combination and deal with its representatives. Such combinations, with all their faults and follies, are not entirely bad.

It is possible that this assumed superiority grows out of a false idea as to the source of wages. Even among those who accept the theory that the wages question is a problem in distribution, and that wages are paid out of product, there is an impression that the employer pays wages, and that therefore he has a certain superior right to determine what these shall be and to settle the conditions that affect the rates of wages. It seems scarcely necessary to remark that in no true sense are wages paid by the employer. Under the organization of industry, the product, the result of the joint effort of employer and employed, goes into the keeping of the former and he advances to labor what has been determined upon as its proportion, recouping himself for this advance from the pledge in his possession — that is, the laborer's proportion of the product. The object of the employer is profits, and it is the business of the employe to see that they are not excessive. When any change is proposed in wages or methods of work it is the employe's right to know the reasons for the same, and to refuse to accept those advanced as conclusive as to the necessity for the change if they do not, after inquiry, so appear to him. The assumption of many political economists that the interests of these two classes are identical, that the employer is best able to judge what is expedient, and that therefore the employe should trust his interests to him, assured that if he takes excessive profits they will, under the action of economical forces, be restored speedily and surely in increased wages, is both absurd and dangerous. The tendency of these economical forces under present conditions is the perpetuation and deepening of industrial injustice. The interests of employer and employed are not identical in the sense intended. It is the interest of the former to give as little, of the latter to get as much as he can ; and to concede to the employer any but an equal right with the employe in deciding the conditions of employment would undoubtedly result in the industrial degradation of the workingman. The argument is similar to that advanced to justify slavery or rule by an oligarchy. The only way in which the rights of either class can be secured and maintained is by placing them in their own keeping. Labor is as competent to care for its interests as the employer is to care for his, and more so than the latter is to care for them.

In seeking, then, a method for the prevention or adjustment of labor differences, care should be taken on the one hand not to assume conditions that have passed away, and thus to adapt the method to a state of affairs that no longer exists. Equal diligence, on the other hand, should be given to ascertaining what are the conditions of the present, in view of which the method is to be applied These conditions and the method should be sought without any preconceived ideas as to what are economical truths. As in practical legislation " the first step is to throw aside all supposed absolute rights or inflexible principles," so in formulating an expression of the way in which it is conceived that these difficulties can best be met, no preconceived idea of what is economically sound should stand in the way of the adoption of what either experience or reason shows may be effective. The thing sought is a practical rule, a mode of action, not the discovery of scientific truth. The end will often be found only as the result of the balancing of probabilities of good and evil.

It is also important, whatever may be adopted, that the parties to the differences, if they do not always, as it is impossible they can, accept the result reached as correct, shall at least have such confidence in the method by which it is attained as to accept it.

It should also be constantly kept in mind that it is chiefly " differences " and " disagreements," not " strikes and lockouts " that are to be avoided and settled. Too much stress cannot be laid upon the fact, so often ignored or forgotten, that strikes are not the beginnings of industrial strife. Their source is in the differences and the controversies to which such differences lead. It is also of the highest moment to realize that industrial peace, with all of its blessings, is to be best secured, not by settling strikes and lockouts when they arise, but by preventing their occurrence.

Chapter III

METHODS FOR SETTLING LABOR DIFFERENCES. THE

THEORY OF COMPETITION.

A consideration of the methods suggested for the prevention or settlement of labor differences shows the prevalence of two widely dissimilar theories as to the proper mode of procedure. One assumes the existence and efficacy of what are termed economical laws or forces, whose action is inevitable, and to which, without any interference, must be left the settlement of these vexed questions. The other theory, while it recognizes the existence, and, within certain limits, the authority, of economical laws, denies that they are fixed and unalterable, and asserts both the right and obligation of interference under certain conditions.

In the application of these theories the advocates of the first insist that all labor differences and disputes not only shall be, but in the nature of things ultimately must be, left to settle themselves by free competition between the individuals interested, without any attempt on the part of the state or of other individuals to control the result. The advocates of the second theory insist upon the right of interference, not only for the purpose of directing or limiting the action of what the first class term economical laws, but even for their contravention or abrogation. This interference is usually exercised by some organized body, as the state, trades-unions, employers' associations, or by committees or boards composed of both employers and employed, formed for the specific purpose of dealing with these questions. The advocates of this theory do not assert that all methods or all instances of interference are wise or effective, nor do they feel bound to adopt and approve all measures that refuse to recognize the principle of laissez faire in dealing with differences between employer and employed. They only assert the right of interference, leaving each expedient to be judged by itself.

Under these two theories four methods have been suggested for the prevention and settlement of labor differences :

1 st. Laissez faire or Competition.

2d. Legislative Enactments.

3d. Strikes and Lockouts.

4th. Arbitration and Conciliation.

The first of these methods recognizes the validity of the first of the theories above stated. The last three are all based upon the second theory, but the modes of interference with the so-called economical laws differ, being respectively, by statutory law, by force, and by reason. The first method will be considered in this chapter, leaving the discussion of the others to a subsequent one.

By far the most prevalent of these theories is the first, that of laissez faire, or of unrestricted competition. There is rarely a discussion of labor differences, whether it be theoretical or practical, in which there is not urged this theory of the sufficiency of competition. It is asserted that not only will competition determine accurately and inevitably what is a " fair day's wage " for a " fair day's work," but that it will redress all economical grievances and level all inequalities. Even when it is acknowledged that there is not perfect competition, its advocates will disguise it, often unconsciously, under other names, as the law of supply and demand, and insist upon the absurdity, as well as the criminality, economically, of any interference with these so-called immutable laws.

This theory, as is well known, assumes that both employer and employe understand what is their highest interest in an economical sense, and will surely seek it. The employer will inevitably strive to get his work done at the lowest possible price, and the employe will as surely endeavor to secure the highest possible wages, and as the result of this contest waged by each to get all he can, there will result perfect justice to all. If from any cause there shall be temporary injustice — that is, if wages are too high or too low, or some "of the conditions of work too oppressive or too lenient, then under perfect mobility, which is also assumed, labor will seek that place or that employment where this wrong does not obtain, the existing evils will be corrected, and the conditions again become those of exact justice.

The sufficient objection to this theory is that under the constitution and methods of the industrial society of to-day, which is the one in whose interest we are seeking a way out of these difficulties, there is not and cannot be that mobility of labor, that perfect facility of movement from one point to another, or from one employment to another, which is the essential condition and only justification of this theory. It is not denied that there is a degree of mobility, but it is by no means as great nor as prompt and unimpeded as is claimed. The obstacles in its way are not exceptional and temporary, but many and serious. They grow out of all the relations, social, political, and religious, which the members of industrial society hold to each other and to the society in which they live, and they exist in varying degrees and varying phases in all industries and all nations.

A moment's consideration of the facts evident in our

AND THEIR SETTLEMENT. \J

own country, where the mobility of labor is perhaps greater than in any other, will show the wellnigh insurmountable obstacles to this assumed facility of movement, and consequently the utter inadequacy of any method for harmonizing the relations of employer and employed based upon this theory. Chief among these at the present moment is the opposition to what is termed " foreign labor." This is most marked and general against the Chinese. It is as bitter, however, in many sections, notably in some of the mining regions of Pennsylvania, against Italians, Hungarians, Pole's, and other nationalities. This opposition has found national expression in the passage by Congress of the " Anti-Chinese Bill " and the " Contract-Labor Bill." Of a similar origin and character is the opposition to what is known in different industries as " black-sheeping," "ratting," or "scabbing," or the acceptance of employment by working-men at rates of wages or upon terms not acceptable to their fellows. This opposition is also directed against those workmen who accept, even upon terms and wages that are satisfactory, the situations of other workmen who have been "victimized" or refused employment because of their advocacy of the employe's side, or of their refusal to adopt the views of the employer in time of difficulty and differences. The violence that has attended the employment of foreigners, as well as that frequently following an effort of labor to transfer itself, either upon its own volition or under agreements with employers, from one section or one industry to another; in a word, the attempts of labor to migrate, to seek the best market, are often so costly, so dangerous to person and property as to seriously obstruct mobility where the conditions referred to exist.