A rational wages system

by Henry Atkinson

Of course, semi-skilled labour would be engaged almost always on repetition work—work, that is, which lends itself excellently to the Reward System. This system means, as I have shown, an addition to the day rate of wages, and therefore the unions might arrange for a lower wage to be paid to semi-skilled workers, and rely on individual efficiency to bring wages approximately up to the union rate.

In such a case it would be necessary for the unions to see that at "standard efficiency" the wages received were at least equal to the day rate for skilled men, and that the tasks were set in such a manner that this efficiency could be reached without excessive strain.

Skilled men would get the ordinary union rate, and if put on reward their individual efficiency would bring the earnings to considerably more than the highest earnings of semi-skilled workers.

This arrangement should be a satisfactory compromise between the employer and the worker, but it can only be brought about by the Reward System, or some similar method, and under trade-union control.

Unless such a compromise is attempted, industry will soon be in a state of economic warfare, and the division of the workers into skilled and semi-skilled camps will be disastrous. If the trade-unions lose control over labour-not only skilled, but semi-skilled labour also—the natural tendency will be for the employers to coerce and intimidate the workers into accepting lower and still lower wages. Our tremendous war indebtedness will provide the excuse, and a "free labour market" will contribute to the success of this reduction.

There is a certain level of necessity to which wages always tend. If wages are high, they tend to be reduced; if they are low, they tend to increase. The tendency to reduction is due to the endeavour of the employer to lower costs, and the acceptance, under pressure, of a lower wage by the worker so long as the wage does not fall below the limit of absolute necessity. The tendency to increase is due to the discontent of the worker when wages are below the necessity level, this leading to strikes, slacking, and inefficiency, which compel the employer to raise wages in order to avoid excessive loss. I am speaking here of skilled labour, where there is always more or less of a demand for workers. In the case of unskilled labour, where the supply is always considerably in excess of the demand, wages are always below the necessity level.

There is a constant "regression towards mediocrity," to use Galton's phrase—in other words, a constant tendency towards the average. It is because this average at present is an average of necessity instead of an average of reasonable comfort that Labour troubles recur so frequently; the slightest variation in the price of necessary articles immediately affects the purchasing power of wages.

It is evident to all unbiased persons that no one can be efficient without a certain minimum income based on comfort; a minimum based on necessity means inefficiency, because no worker can be really efficient when haunted by the constant fear of debt and misery and starvation. And it is also evident that this minimum of comfort cannot be based on the money a man receives as wages, but on what he needs. What constitutes need is open to argument, but there are certain items of necessity which are beyond dispute.

No matter where a person lives, he needs a good roof over his head, food to eat, clothes to wear, fuel, household necessities, and a surplus for emergencies. The cost of living differs in various parts of the United Kingdom, and therefore there should be a scale of wages for each district, based on the purchasing power of wages in that district. This is recognised by the trade-unions, and in consequence union wages are higher in London than in provincial towns.