CHAPTER X—THE REGULATION OF WAGE LEVELS
Section 1. Why there must be in industry an ordered scheme of wage relationship between each and every group of wage earners. The limits of collective bargaining as a factor in industrial peace.—Section 2. In the beginning, the scheme must probably be based on an acceptance of existing wage "differentials." The reasons for this are of a practical kind.—Section 3. Any policy which planned to develop a scheme of wage relationships merely by maintaining existing differentials would be bound to fall to pieces in the end. The difficulties that would arise.—Section 4. Two principles proposed as the basis of the desired scheme of wage relationship. Their meaning as applied doctrines.—Section 5. These principles open to criticism both on practical and theoretical grounds. The chief criticisms examined and taken into account.—Section 6. Some notes on the best method of administering these principles. The necessity of avoiding political interference, if possible.
1.—We have now completed that part of this inquiry which was concerned with the formulation of principles suitable for the regulation of the wages of the lowest paid industrial groups. The task remains of working out principles which could be used satisfactorily in the settlement of wages for all other groups of wage earners.
The subject may be introduced by recalling certain matters, set forth in the preceding analysis of wage principles. It was seen that while the wages of each and every group of wage earners were governed, in a great measure, by forces which acted upon them all in common, yet the wages of each group were settled somewhat independently of all the rest. Again, it was seen that one of the leading characteristics of the present distributive situation is the use of the group will and group power to serve group purposes. Wage movements in different industries or occupations begin independently of each other; yet because of the firm determination on the part of most groups of wage earners to maintain their position in the industrial scale, a wage movement in one part of the field of industry tends frequently to give rise to similar movements throughout the field.
This tendency for the actions of one group to give rise to action on the part of other groups arises from the existence of some "power of interchange or close connection" as Mr. Aves has said. Before the use of group power becomes common and the sense of group interest becomes highly developed, that interchange or interconnection tends to exist only between classes or groups of workmen who can easily move into each other's field of employment. But with the extension and encouragement of unionism, with a constantly growing volume of public discussion of wage questions, there has arisen an interconnection between wage movements in groups very far apart in the industrial scale.[136]
As long as wave movements in different industries and occupations are considered independently of each other, and the claims of each group are judged with only incidental reference to the claims of the other groups, the use of group strength will continue to be a conspicuous characteristic of distribution. The constant assertion of group power will cease only if all groups are brought within some acceptable plan of wage settlement, under which group wages are settled by principles recognized as fair. The problem is to establish an ordered scheme of wage relationship between each and every group of wage earners—which scheme of relationship will do justice between them, and which will also effect such a distribution of the product of industry between all the wage earners and the other claimants to a share in the product, as will justify it to the wage earners and to the community in general.
If the objection be raised that the establishment of such a scheme of wage relationship is not practicable, doubt must be admitted. Yet it is probably essential to industrial peace,—under our present industrial system, or under an alternative one. It would seem to be the only substitute for the continued reliance of each group upon group power. There has been a strong tendency, both in the United States and England, to believe that industrial peace could be secured by the development of joint industrial or occupational councils throughout industry—which councils would assure fair and complete consideration of all wage questions which arise. It would be a serious error to underestimate the possible value of such joint councils to the cause of industrial peace. Indeed, throughout this study of the means of industrial peace great reliance will be placed upon them. Yet I do not believe that their creation will suffice to bring industrial peace.
Such joint councils are among the most satisfactory instruments yet devised for the conduct of collective bargaining. But will collective bargaining keep such an interdependent industrial society as our own at work peacefully? Can the philosophy of compromise be developed to that extent? Joint industrial councils can produce understanding between employers and wage earners; they can foster a spirit of coöperation between all groups engaged in a productive industry; they can stand in the way of the creation of such intolerable conditions of labor as have, on occasion in the past, led to a spontaneous revolt in an industry; they can foster reasonableness and compromise. But it is difficult to see how they can work out principles of wage settlement for any industry which will have sufficient authority over the actions of those engaged in it in times of stress.