A rational wages system

by Henry Atkinson

Let us try to see straight on this point.

First as to the relations between them. The employer wants to get as much profit as he can, and, as wages are usually a large and a plastic item in his expenditure, he always tries to cut down that item either by lowering wages or by getting more work produced for the same wages. "Low labour cost" is the continual cry of the employer.

Next, the average worker wants as much wages as he can get for as little work as possible. He thinks that the less work he does the more there is for somebody else, and it suits his nature to go easy. "High wages and short hours" is the cry of the worker.

Is there anything to choose between them? Only the fact that, as the employer's profits are so high and the worker's wages are so low, there ought to be a better distribution of the wealth produced. Morally there is nothing to choose between them, because each is trying to rob the other. They cannot help it. Neither is to blame altogether; it is the fault of the present industrial conditions. Under these conditions the employer cannot give to the worker a fair share of the wealth produced.

To have a factory it is necessary to have capital. That capital has been obtained from the surplus wealth produced by the worker. The worker cannot work without the capital necessary to provide the tools to work with and the material on which to work. Interest must be paid on capital in order that the employer may live, and in order to accumulate more capital, because there are more workers coming into being every year, and they will want work and there must be capital to provide the means necessary for that work.

And so the vicious circle goes on. It is not the fault of the employer; it is not the fault of the worker. It is, I repeat, the fault of the system.

Take any worker from his work and place him in charge of a factory with a large capital, and ask him to run the business in competition with other businesses; he would soon find how keen a man must be in order to keep the business going successfully. Suppose the profits fell off, what would our worker-employer do? Cut down wages, of course!

There is no getting away from it, and we must look the conditions squarely in the face and blame neither employer nor worker overmuch.

Now, here is where the Reward System scores. The employer gets "low labour costs"; the worker gets "high wages and shorter hours," with good conditions and greater comfort added.

I am quite convinced that there will be less antagonism between them under the Reward System than under any other. It keeps both up to the mark, and it means a mutual dependence on each other and a mutual interest in high and efficient production. An employer who pays wages under the Reward System soon finds that he has adjusted his whole establishment and sales policy on this basis. If he goes back to day work or piece work, the labour costs go up instantly. So he must stick to the system: it pays him to stick to it. Yet he dare not make things too harsh for the worker; if he tries to do so, down comes efficiency. And the essential items that make for efficiency are reasonable hours, pleasant conditions of labour, and a reward in proportion to that efficiency.