Problems of Poverty: An Inquiry into the Industrial Condition of the Poor

by J. A. Hobson

In arriving at this conclusion, we are far from maintaining that the public even in its private capacity as a body of consumers could do nothing. A certain portion of responsibility rests on the public, as we saw it rested on employers and on middlemen. But the malady is rightly traceable in its full force neither to the action of individuals nor of industrial classes, but to the relation which subsists between these individuals and classes; that is, to the nature and character of the industrial system in its present working. This may seem a vague statement, but it is correct; the desire to be prematurely definite has led to a narrow conception of the "sweating" malady, which more than anything else has impeded efforts at reform.

Chapter V.

The Causes of Sweating.

§ 1.The excessive Supply of Low-skilled Labour.--Turning to the industrial system for an explanation of the evils of "Sweating," we shall find three chief factors in the problem; three dominant aspects from which the question may be regarded. They are sometimes spoken of as the causes of sweating, but they are better described as conditions, and even as such are not separate, but closely related at various points.

The first condition of "sweating" is an abundant and excessive supply of low-skilled and inefficient labour. It needs no parade of economic reasoning to show that where there are more persons willing to do a particular kind of work than are required, the wages for that work, if free competition is permitted, cannot be more than what is just sufficient to induce the required number to accept the work. In other words, where there exists any quantity of unemployed competitors for low-skilled work, wages, hours of labour, and other conditions of employment are so regulated, as to present an attraction which just outweighs the alternatives open to the unemployed, viz. odd jobs, stealing, starving, and the poor-house. In countries where access to unused land is free, the productiveness of labour applied to such land marks the minimum of wages possible; in countries where no such access is possible, the minimum wages of unskilled labour, whenever the supply exceeds the demand, is determined by the attractiveness of the alternatives named above.

A margin of unemployed labour means a bare subsistence wage for low-skilled labour, and it means this wage earned under industrial conditions, such as we find under the "sweating system." In order to keep the wage of low-skilled labour down to this minimum, which can only rise with an improvement in the alternatives, it is not required that there should at any time exist a large number of unemployed. A very small number, in effective competition with those employed, will be quite as effectual in keeping down the rate of wages. The same applies to all grades of skilled labour, with this important difference, that the minimum wage can never fall below what is required to induce less skilled workers to acquire and apply the extra skill which will enable them to furnish the requisite supply of highly-skilled workers. Trade Unions have instinctively directed all their efforts to preventing the competition of unemployed workers in their respective trades from pulling down to its minimum the rate of wages. The strongest of those have succeeded in establishing a standard wage less than which no one shall accept; unemployed men, who in free competition would accept less than this standard wage, are supported by the funds of the Union, that they may not underbid. Unions of comparatively unskilled workers, who are never free from the competition of unemployed, and who cannot undertake permanently to buy off all competitors ready to underbid, endeavour to limit the numbers of their members, and to prevent outsiders from effectively competing with them in the labour market, in order that by restricting the supply of labour, they may prevent a fall of wages. The importance of these movements for us consists in their firm but tacit recognition of the fact, that an excessive supply of unskilled labour lies at the root of the industrial disease of "sweating."

§ 2. The Contributing Causes of excessive Supply.--The last two chapters have dealt with the principal large industrial movements which bear on this supply of excessive low-skilled labour; but to make the question clear, it will be well to enumerate the various contributing causes.

α. The influx of rural population into the towns constantly swells the supply of raw unskilled labour. The better quality of this agricultural labour, as we saw, does not continue to form part of this glut, but rises into more skilled and higher paid strata of labour. The worse quality forms a permanent addition to the mass of inefficient labour competing for bare subsistence wages.

β. The steady flow of cheap unskilled foreign labour into our large cities, especially into London, swollen by occasional floods of compulsory exiles, adds an element whose competition as a part of the mass of unskilled labour is injurious out of proportion to its numerical amount.

γ. Since this foreign immigration weakens the industrial condition of our low-skilled native labour by increasing the supply, it will be evident that any cause which decreases the demand for such labour will operate in the same way. The free importation from abroad of goods which compete in our markets with the goods which "sweated" labour is applied to make, has the same effect upon the workers in "sweating" trades as the introduction of cheap foreign labour. The one diminishes the demand, the other increases the supply of unskilled or low-skilled labour. The import of quantities of German-made cheap clothing into East London shops, to compete with native manufacture of the same goods, will have precisely the same force in maintaining "sweating," as will the introduction of German workers, who shall make these same clothes in East London itself. In each case, the purchasing public reaps the advantage of cheap labour in low prices, while the workers suffer in low wages. The contention that English goods made at home must be exported to pay for the cheap German goods, furnishes no answer from the point of view of the low-skilled worker, unless these exports embody the kind of labour of which he is capable.