The Settlement of Wage Disputes

by Herbert Feis

Before industrial peace can be obtained, particular groups of wage earners must forbear from pressing to the utmost the bargaining advantages they possess. This forbearance will come only from a knowledge of an interest larger than their own. There will have to be a recognition by all sides of principles which represent aims to which all subscribe, and which do justice to the interests of each.

2.—What then is required, to repeat, is a policy by which wages in various industries and occupations are brought into relation with each other. This policy should be calculated to result in such a distribution of the product of industry as would justify it to the wage earners and community in general. The scheme of wage relationship would have to rest upon expressed principles.

In the beginning any policy which has as its aim the establishment of a scheme of wage relationship must accept and protect the existing wage levels of each group of wage earners. That would mean, of course, accepting the wage relationships existing between them. The reasons for this are practical, rather than theoretical. They are: Firstly, because it will be impossible to win general consent for any policy of wage settlement which does not guarantee to all wage earners at least their existing rates of wages. Secondly, because the existing relationships between the wage levels of the different groups of workers represent, though only vaguely and roughly, customary relationships, and they therefore have, on occasion, meaning to the wage earners. Thirdly, the mere fact that they exist makes them the most convenient basis for the very careful process of comparison and calculation involved in any attempt to establish gradually a scheme of wage relationships based upon principles. It should be kept in mind, however, that the reasons for their acceptance are of a practical nature, and that no theoretical considerations compel an unquestioning acceptance of them, as is sometimes urged.

3.—Since, on practical grounds, it is held that any attempt to create an ordered scheme of wage relationship must begin by accepting existing wage levels, it may be judged by some that the scheme that is sought could be developed merely by maintaining these relationships. That would mean that existing differentials would be maintained as customary differentials. That policy, it is true, would have the advantages of simplicity and continuity. But it would be found impossible to maintain. For the scheme of wage relationship to which it would give rise would lack the authority of principle—without which no scheme of wage relationship will receive voluntary and steady support from the various groups of wage earners. The wage earners will not voluntarily accept a place in the industrial scale, unless it is felt that the scale is the result of the application of rules of acknowledged fairness. The existing scale of wage relationship, however, has not been determined either by considerations of justice or of the general interest. Nor has it, as is sometimes claimed, the authority of being altogether necessary. It is the product of a multitude of forces, some of which may be given different importance in the future than they had in the past.

It is easy to foresee the difficulties with which a policy which planned to create an ordered scheme of wage relationships by maintaining existing differentials would be confronted. Claims will constantly be presented by particular groups for some improvement in their economic position. These claims could not be disregarded merely on the score that they contravened the scheme of established differentials. The issue that would arise is clearly exemplified by statements made in the course of two of the most important industrial conflicts that occurred in England of recent years. "We claim," the Secretary of one of the Shop Committees of the Molders' Union wrote in defense of the demand of his union for differential treatment under an award made for the whole of Engineering Trades—which demand provoked the molders' strike, "we claim that our work is totally different in many ways from the other departments in the engineering industry. It is arduous, dirty, dangerous, hot, unhealthy, and highly skilled, and we claim separate treatment on these grounds. There is no other department in the engineering industry with so high a percentage of sickness or accidents.... You mention the employers' attitude towards the molders' application—a refusal to grant to molders any separate consideration because other classes of workers would also expect it. To me such an attitude is both unfair and untenable. If the molder can prove that his conditions of working are vile, dangerous and unhealthy, it is surely fair to ask for a proper recompense for such work...."[137] And consider this extract from one of the reports of the Coal Industry Commission, signed by six members of the Commission. "It will, however, be said that desirable as may be an improvement in the miners' conditions, the industry will not bear the cost of a reduction in hours, even if the aggregate output is, by an increase in numbers and, therefore, in the wages bill restored to its pre-war level, without involving a considerable advance in the price of coal, with possible adverse effects on our export trade, on manufacturing industry generally, and on the domestic consumer. We have to observe that if the improvement in the miner's standard of life is really required for the greater efficiency of the industry itself, or in the national interest, the fact that it might involve a temporary increase in the price of coal would not be conclusive against it. Moreover, if hours of labor have been reduced in other industries, and if the standard of life has been advanced among other sections of the community, it would be unsuitable to withhold a similar advance from the miners, merely because the others have got in first."[138]

In short, under any scheme of wage relationship based on the preservation of existing differentials, it could not be established in the face of any claim that the relative position of a group was determined either by consideration of justice, or by implacable necessity. Therefore, that scheme would not receive the constant and widespread support requisite to its successful operation.[139]

So far then, in this chapter, two conclusions have been reached. Firstly, that the course of wage settlement in each industry or occupation cannot be a process entirely independent from the course of wage settlement in every other industry and occupation. Secondly, that although the first step in the establishment of any scheme of wage relationship is the acceptance of existing wage levels and differentials, the policy must provide for the reconsideration of these differentials in the light of affirmed principles; with the aim of gradually evolving in industry an ordered scheme of wage relationship, upheld by common consent to the principles on which it rests.

4.—Thus we are put under the necessity of attempting to formulate principles or standards by which all claims made by groups of wage earners for reconsideration of existing wage differentials could be judged. This is not a task to be lightly undertaken. Nor is it to be expected that such clear principles of wage relationship can be elaborated as to escape the necessity of deciding many claims by an appeal to compromise and by taking refuge in a general sense of equity. All that it is hoped to do is to suggest certain lines along which a satisfactory formulation of the required principles of wage relationship may be sought.

It might be possible gradually to construct such an ordered scheme of wage relationship as has been declared essential to industrial peace by applying to successive wage controversies, as they arose, two central doctrines. These doctrines are: Firstly, the doctrine of the unity of the wage income and of the wage earners—by which is meant that the wages of all groups should be regarded as part of one general wage income, to be shared out among all wage earners in as nearly equal proportions, as is practicable, without special favor to any one. And, secondly, what may be called for a lack of a better name, the doctrine of special reward—by which is meant, that the wage differentials between the standard wage levels of different types of labor should be regarded as special rewards, given in order to make it reasonably certain that industry will be provided with at least the existing proportion of the more skilled grades of labor, and to make it reasonably certain also that the more arduous, irregular, dangerous and disagreeable work will command the service of as much labor as at present.

It should be observed, first of all, that neither of these two doctrines upholds the rights of particular groups of wage earners. They aim to bring all wage earning groups to perceive that they are part of a larger whole; they emphasize the fact that the wages of each group are what they are, more because the total wage income is what it is, than because of the special type of work performed by the group. They, however, recognize the necessity of giving extra reward for the training and skill or natural ability required for particular kinds of work, for more than common danger or disagreeableness incurred in the performance of particular kinds of work, and the like—in short, for all those factors which elevate a job above what is called common labor.