National Association of Iron Founders
There is no subject of greater general importance before the world to-day, none more simple in its character, and yet none so handicapped by fanaticism, as that of the relation of employer and employee.
Remove the curtain between the two real parties to the controversy, which is often held by men of selfish purpose on both sides, and you behold two simple factors, the wage-payer and the wage-earner, each dependent upon the other and both serving the same master, the great consuming public, of which they are also equal and very important parts.
The wage-payer, being directly in contact with the purchasing consumer, claims that he must have a result in production equal in every way to the wages paid, while the wage-earner contends that he must have a wage equivalent to his contribution in time, energy and skill, to the article produced.
Every visible article of use, for food, clothing or shelter, of necessity, luxury or culture, represents three component parts, and the production of each such article depends upon the proper combining of these parts, which are: 1st. Raw material. 2d. Capital. 3d. Labor.
Raw material, supplied by nature, is controlled only by the law of supply and demand, except when by legislation the natural law is for a time superseded, and it then becomes a matter of political action, in which the entire community, except the few who are directly interested in profit, join to abolish the corrupt legislation and restore the natural condition. Raw material is, therefore, the basis of cost in determining the price of every product to the public.
Labor, whether skilled or unskilled, engaged in the reduction of the raw material to the finished product, is also dependent upon the law of supply and demand to fix its value or wage; and any effort to change this value brings the wage-earner in direct conflict with the consumer, through his representative, the employer, whose duty it is to know, and who usually does know, what proportion of the entire cost of any article can be distributed in wage so as to retain the value of the article at a price not in excess of the ability of the consumer to purchase, and yet within limits which will prevent a more favored nation or district from furnishing the same article in competition, and thereby cause idleness for the wage-earner and loss to the employer.
Capital represents plant, machinery, transportation, interest, and all the factors known as unproductive, and yet absolutely essential for the combination of material and labor. Capital is usually, though not always, the owner of material and the direct employer of labor, and therefore must stand for the silent partner in the combination. What is so frequently called a war between capital and labor is simply an effort on the part of the wage-earner and wage-payer to determine what part of the product of labor, as distinct from material, is represented in the price to the public, and after deducting the proper charge for plant, etc., how the balance, which is profit, shall be divided between the employer and the employee,—or wage-payer and wage-earner.
The growth of prosperity in this country has always been in ratio to increased production, and until a recent period such increased production has been the direct result of the co-operation of the wage-earner and the wage-payer. In the beginning of our commercial history it was only necessary for one man to exchange the product of his own industry for that of other men to obtain the necessities of life, and then the results of labor were not measured by a unit of value or wage, but by the amount of energy expended in production.
When the rapid growth of the country required greater productiveness, and the enlargement of territory made necessary a change in the distribution of the products of labor, the factory system was introduced, whereby capital, or unproductive labor, was joined with productive labor to accomplish greater results than had heretofore been attained by individual labor.