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

by J. A. Hobson

Compulsory registration of workshops, adequate inspection, and reform of machinery of sanitary reform, would be of material value in dealing with some of the evils of the small workshop. But it would by no means put an end to "sweating." So far as it admitted the continuance of the small workshop, it would neither directly nor indirectly abate the evil of low wages. It is even possible that any rapid extension of the Factory Act might, by limiting the amount of employment in small workshops, increase for a time the misery of those low-skilled workers, who might be incapable of undertaking regular work in the larger factory. It is, at any rate, not evident that such legislative reform would assist low-class workers to obtain decent wages and regular employment, though it would improve the other conditions under which they worked.

Again, existing factory legislation by no means covers even theoretically the whole field of "sweating." Public-houses, restaurants, all shops and places of amusement, laundries, and certain other important forms of employment, which escape the present factory legislation, are in their lower branches liable to the evils of "sweating," and should be included under such factory legislation as seeks to remedy these evils.

§ 2. Co-operative Production.--The organization of labour is the second form of remedy. It is urged that wherever effective organization exists in any trade, there is no danger of sweating. We have therefore, it is maintained, only to organize the lower grades of labour, and "sweating" will cease to exist. There are two forms of organization commonly advocated, Co-operation and Trade Unionism.

The suggestion that the poorer grades of workers should by co-operative production seek to relieve themselves from the stress of poverty and the tyranny of the "sweating system," is a counsel of perfection far removed from the possibility of present attainment. No one who has closely studied the growth of productive co-operation in England will regard it as a practicable remedy for poverty. Productive co-operation is successful at present only in rare cases among skilled workmen of exceptional morale and education. It is impossible that it should be practised by low-skilled, low-waged workers, under industrial conditions like those of to-day. It is surprising to find that the Lords' Committee in its final report should have given prominence to schemes of co-operation as a cure for the disease. The following paragraph correctly sums up experience upon the subject--

"Productive societies have been from time to time started in East London, but their career has been neither long nor brilliant. They have often had a semi-philanthropic basis, and have been well-meant but hopeless attempts to supersede "sweating" by co-operation. None now working are of sufficient importance to be mentioned."[[29]]

The place which productive and distributive co-operation is destined to occupy in the history of the industrial freedom and elevation of the masses doubtless will be of the first importance. To look forward to a time when the workers of the community may be grouped in co-operative bodies, either competing with one another, or related by some bond which shall minimize the friction of competition, while not impairing the freedom and integrity of each several group, is not perhaps a wild utopian vision. To students of English industrial history the transition to such a state will not appear more marked than the transition through which industry passed under the Industrial Revolution to the present capitalist system. But the recognition of this possible future does not justify us in suggesting productive co-operation as a present remedy for the poverty of low-skilled city workers. These latter must rise several steps on the industrial and moral ladder before they are brought within the reach of the co-operative remedy. It is with the cost and labour of these early steps that the students of the problem of present poverty must concern themselves.

§ 3. Trade Unionism. Ability of Workers to combine. Trade Unionism is a more hopeful remedy. Large bodies of workers have by this means helped to raise themselves from a condition of industrial weakness to one of industrial strength. Why should not close combination among workers in low-paid and sweating industries be attended with like results? Why should not the men and women working in "sweating" trades combine, and insist upon higher wages, shorter hours, more regular employment, and better sanitary conditions? Well, it may be regarded as an axiom in practical economies, that any concerted action, however weak and desultory, has its value. Union is always strength. An employer who can easily resist any number of individual claims for higher wages by his power to replace each worker by an outsider, can less easily resist the united pressure of a large body of his workmen, because the inconvenience of replacing them all at once by a body of outsiders, is far greater than the added difficulty of replacing each of them at separate intervals of time. This is the basis of the power of concerted action among workers. But the measure of this power depends in the main upon two considerations.

First comes the degree of effectiveness in combination. The prime requisites for effective combination are a spirit of comradeship and mutual trust, knowledge and self-restraint in the disposition of united force. Education and free and frequent intercourse can alone establish these elements of effective combination. And here the first difficulty for workers in "sweating" trades appears. Low-skilled work implies a low degree of intelligence and education. The sweating industries, as we have seen, are as a rule those which escape the centralizing influence of the factory System, and where the employés work, either singly or in small groups, unknown to one another, and with few opportunities of forming a close mutual understanding. In some employments this local severance belongs to the essence of the work, as, for example, in the case of cab-drivers, omnibus-drivers, and generally in shop-work, where, in spite of the growth of large stores, small masters still predominate; in other employments the disunion of workers forms a distinct commercial advantage which enables such low-class industries to survive, as in the small workshop and the home-labour, which form the central crux of our sweating problem. The very lack of leisure, and the incessant strain upon the physique which belong to "sweating," contribute to retard education, and to render mutual acquaintanceship and the formation of a distinct trade interest extremely difficult. How to overcome these grave difficulties which stand in the way of effective combination among unskilled workers is a consideration of the first importance. The rapid and momentarily successful action of organized dock labourers must not be taken as conclusive evidence that combination in all other branches of low-class labour can proceed at the same pace. The public and localized character of the competition for casual dock labour rendered effective combination here possible, in spite of the low intellectual and moral calibre of the average labourer. It is the absence of such public and localized competition which is the kernel of the difficulty in most "sweating" trades. It may be safely said that the measure of progress in organization of low class labour will be the comparative size and localization of the industrial unit. Where "sweating" exists in large factories or large shops, effective combination even among workers of low education may be tolerably rapid; among workers engaged by some large firm whose work brings them only into occasional contact, the progress will be not so fast; among workers in small unrelated workshops who have no opportunities of direct intercourse with one another, the progress will be extremely slow. The most urgent need of organization is precisely in those industries where it is most difficult to organize. It is, on the whole, not reasonable to expect that this remedy, unless aided by other forces working against the small workshops, will enable the "hands" in the small sweater's den to materially improve their condition.

§ 4. Trade Union Methods of limiting Competition.--So far we have regarded the value of combination as dependent on the ability of workers to combine. There is another side which cannot be neglected. Two societies of workmen equally strong in the moral qualities of successful union may differ widely in the influence they can exert to secure and improve their position. We saw that the real value of organization to a body of workmen lay in the power it gave them to make it inconvenient for an employer to dispense with their services in favour of outsiders. Now the degree of this inconvenience will obviously depend in great measure upon the number of outsiders qualified by strength and skill to take their place without delay. The whole force of Unionism hangs on "the unemployed." The strongest and most effective Unions are in trades where there are the smallest number of unemployed competitors; the weakest Unions are in trades which are beset by crowds of outsiders able and willing to undertake the work, and if necessary to underbid those who are employed.

Close attention to the composition and working of our Trade Unions discloses the fact that their chief object is to limit the competition for work in their respective trades. Since their methods are sometimes indirect, this is sometimes denied, but the following statement of Trade Union methods makes it clear. The minimum or standard rate of wages plays a prominent part in Unionism. It is arbitrarily fixed by the Union, which in its estimate takes into account, α. prices paid for articles produced; β. a reasonable standard of comfort; γ. and remuneration for time spent in acquiring necessary skill.[[30]] This is an estimate, it must be remembered, of a "fair wage," based upon calculations as to what is just and reasonable, and does not necessarily correspond to the economic wage obtainable in a neighbourhood by the free competition of labour and capital. Now this standard wage, which may or may not be the wage actually paid, plays a very prominent part in Unionism. The point of importance here is its bearing on the admission of new members. The candidate for membership has, as his principal qualification, to show that he is capable of earning the standard rate of wages. It is evident, however, that the effect of any large new accession to the ranks of any trade must, unless there is a corresponding growth of employment, bring down the rate of wages, whether these be fixed by a Trade Union standard or not. Hence it is evident that any Trade Union would be bound to refuse admission to new applicants who, though they might be in other respects competent workmen, could not find work without under-bidding those who were at present occupied. This they would do by reason of their standard wage qualification, for they would be able to show that the new applicants would not be competent to earn standard wages under the circumstances. How far Trade Unions actually have conscious recourse to this method of limiting their numbers, may be doubted; but no one acquainted with the spirit of Trades Unions would believe that if a sudden growth of technical schools enabled large numbers of duly qualified youths to apply for admission into the various Unions so as to compete for the same quantity of work with the body of existing members, the Unions of the latter would freely and cheerfully admit them. To do so would be suicidal, for no standard rate of wages could stand against the pressure of an increased supply of labour upon a fixed demand. But it is not necessary to suppose that any considerable number of actually qualified workmen are refused admission to Trade Unions of skilled workers. For the possession of the requisite skill, implying as it does a certain natural capacity, and an expenditure of time and money not within the power of the poorest classes, forms a practical limit to the number of applicants. Moreover, in many trades, though by no means in all, restrictions are placed by the Unions upon the number of apprentices, with the object of limiting the number of those who should from year to year be qualified to compete for work. In other trades where no rigid rule to this effect exists, there is an understanding which is equally effective. Certain trades, such as the engineers, boiler-makers, and other branches of iron trade, place no restrictions, and in certain other trades the restrictions are not closely applied. But most of the strong Trades Unions protect themselves in another way against the competition of unemployed. By a System of "out of work" pay, they bribe those of their body, who from time to time are thrown out of work, not to underbid those in work, so as to bring down the rate of wages. Several of the most important Unions pay large sums every year to "out of work" members. By these three means, the "minimum wage" qualification for membership, the limitation of the number of apprentices, and the "out of work" fund, the Trade Unions strengthen the power of organized labour in skilled industries by restricting the competition of unemployed outsiders.