The Settlement of Wage Disputes

by Herbert Feis

The second type is that which rests upon some difference in the "net advantages" of the same work carried on in different sections of the industry or occupation. For the purpose in hand, three sorts of difference in net advantage may be noted. The first sort would be represented by a claim for a higher rate than that stipulated in the general scale, because the work in question was carried on under conditions involving an unusual degree of disagreeableness or risk. In my opinion, "nominal variations" based on such differences as these can safely be left to voluntary bargaining rather than enforced as a matter of policy. The conduct of almost any occupation involves differences in the conditions under which it is performed. Nobody entrusted with the duty of enforcing a policy of wage settlement would find it easy to define the conditions which warranted an addition to the standard rate. It would run the risk of being involved in a process of refined definition which would probably be futile. Justice Higgins stated this view aptly in a claim for "dirt" money. "My view," he writes, "is that the minimum rate of wages is not to be made to depend upon the degree of dirtiness of the work. A man must accept the conditions of the work to which he has devoted himself; and the court cannot be expected to define degrees of dirt or to express them in terms of money wages. If the employer puts the employee to work which is unnecessarily dirty, the remedy is in prohibition or in regulation—not in increase of wages. My decision in no way prevents the employer and employee from making a voluntary stipulation for dirt money in any particular case."[97]

A second sort of difference in net advantage would be represented by a request on the part of an employer that certain payments in kind should be considered as part of the wage. An example of this would be the provision of meals. Such variations would seem to be permissible when the acceptance of the payment in kind is left optional with the workmen.

A third sort of difference in net advantage, and possibly the most important, is that represented by differences in the regularity of employment in different sections of a trade or industry. This type of difference is exemplified in the work of longshoremen and lumbermen; some men being engaged on one type of work are employed regularly, while men engaged on other jobs are employed irregularly or casually. It is frequently claimed that irregular or casual work should be paid at higher rates than regular work. The justice of this claim seems apparent. Irregularity of work is undoubtedly a great handicap to the workman who seeks to maintain a well ordered life. Extra payment for irregularity of employment is a burden which can fairly be put upon an industry, or section of an industry—even if the irregularity is unavoidable. Yet the consequences of such a policy of "nominal variation" may be undesirable. It has been revealed by experience that there are some workmen who prefer irregular or casual work to regular work. And if higher wage rates are paid for irregular work this preference—an undesirable one, from the point of view of the community—is apt to be strengthened. On the other hand, it is usually true that only a small percentage of workmen prefer casual work to regular work. Most men engage in casual work because they cannot secure regular work.

As was well established in the Court of Enquiry on the work and wages of transport workers (Great Britain) held early in 1920, the only real solution of the difficulty is the reorganization of the occupation so that the irregular and casual work is reduced to a minimum. Until that is accomplished, it is probable that the most advisable policy is to grant "nominal variations" for casual and irregular employment. These variations should not be so great as to influence the run of workmen to prefer casual work. The total earnings from regular work should be higher. Another policy that may be practicable, in many cases, is to define a minimum period of employment for all workmen engaged.[98] Such a policy puts strong pressure upon the industry to cut down irregularity of employment. Against such a policy stand the practical difficulties involved in determining the basis of any scheme of "nominal variations."

The whole question is well surveyed in a decision of the Commonwealth Court of Australia which reads in part as follows: "The casual hand, I propose to define as an employee who is not employed for a fortnight continuously and who is not entitled to a week's notice before his employment is determined. A new light was thrown by the evidence in this case on the growing tendency of some men to depend on the high rates for casual work only, to enable them to work when they thought fit, and idle when they felt inclined.... The yearly return of so many seasonal hands for the wool and grain season, year after year, who look for casual work elsewhere in the meantime in shearing sheds—on the wharfs—in other industries and even in the Government temporary service—and prefer casual work is not an encouraging sign. The higher rates paid for casual work do, and will, encourage many men to rely on that class of labor. I do not think that is good for the community or for the employee. I have been asked not to encourage the tendency to prefer casual labor by granting high rates for casual labor.

"Although the rates for casual labor ought not be so high as to induce men to become casual laborers, a higher rate must in fairness be allowed, where as in this industry, men, however anxious they may be to get permanent work, are not employed for the whole season without a break, and many of them are only employed a short broken part of the season, and some are employed for a day or a few days only."[99]

6.—In the examination of the reasons for and against limitation or variation of the principle of standardization, note must be taken of still one other argument of a somewhat different nature than those already dealt with. That argument is that it will prove impossible to maintain uniform standard wage rates throughout an industry in which the various enterprises are distributed over a wide area; in the several parts of which area the cost of living, the general conditions of labor, and the demand and supply situation for labor differ considerably.

This contention is supported by two different lines of reasoning. The first is that, because of these differences, there will tend to be a flow of labor away from the less favorable points of employment within the area of standardization towards the more favorable. This flow, it is said, will cause a reappearance of the differentials which existed before standardization. The first comment to be made on this line of reasoning is explanatory, rather than contradictory. It is true that there may be some tendency for labor to flow from the less favorable points to the more favorable. But it must be remembered that the standard wage is intended only as a minimum. If differentials over the standard wage did arise in enterprises where the conditions of labor were worse than the average, or in regions where the cost of living was higher than the average, such differentials would not be incompatible with the ends sought, when standardization is enforced. Secondly, it may be commented that the experience of the past does not, in general, support the contention. In many industries the same standard wage scale applies over an area in which there are real differences of the kind set forth above, and no differentials as between the different points within the area have arisen—as, for example, on the railroads. This is to be accounted for, firstly, by the influence of the idea of standardization over trade union activity and policy; secondly, by the fact that relative money wages tend to govern, in a great measure, the calculations and movements of the wage earners; thirdly, by the fact that the application of the principle of standardization is in itself a strong force toward bringing about a leveling in the conditions of employment throughout an industry.

The second line of reasoning with which this contention is supported is that the trade unions themselves will not long support any policy of standardization which does not make explicit allowances for such differences as are in question. It is said that the organization of the workers at the points where the cost of living was relatively high would insist upon a differential over other places for that reason.

Such, for example, was the argument of the employers' counsel before the Court of Inquiry on the wages of transport workers (Great Britain), "... He submitted that one of the foundations of his argument was that in fixing wages they must have regard to the class of work. Having regard to the very great diversity of conditions and of methods in the different ports, and to the class of work done, he submitted that they could not standardize. They must do in the case of the ports as they did in the case of the coal mines."[100]