Uniform National Wages
One of the demands of workers in many industries which, before the war, paid in different districts rates of wages varying according to local economic circumstances, is for uniform national wage rates. This is a result of the war. There was, during the war, no time to consider the wage-circumstances of individual works—the pressing need was munitions at any price—hence Government Departments responsible for production were compelled to treat wages in industries under their control, especially those in which there had been no pre-war defined district practice, on a more or less uniform national basis. Thus, substantially the same standard, as distinct from minimum, rate of wages for the same grade of workers came in time to operate generally throughout the country, in all works in a particular munitions industry. In some of the more highly organized industries the addition of the same war advance preserved district differentials of the same pre-war nominal amount, but the pre-war ratios of the district wages to one another were greatly reduced. So workmen in a particular district, where, for economic reasons, wages had been lower than in other districts, found themselves on much the same wage-level as workmen in the highest pre-war rated district. A difference of 5s. between 35s. and 30s. per week is very different from 5s. between 80s. and 75s. Naturally, the worker will not willingly surrender that position; hence the claim to-day in many industries for standard national rates. It is an impracticable demand under ordinary commercial conditions, save in exceptional cases where you have one employer running all works in an industry, as the Government did munitions during the war, or different employers each possessing balanced undertakings which comprise establishments both above and below average efficiency. The demand for standardization is illustrated in the railwayman’s wage settlement; numerous classes of men (excluding drivers and firemen) previously in railway service have been reduced to a small number of grades, and the individual in those grades receives, generally speaking, one of three descending national rates of pay according as his work is in the London area, one of the provincial towns, or in a rural part of the country. Sailors’ and stokers’ wages are also standardized, the same rates of pay for the same class of man being paid in vessels in the same trade category. It is obvious, however, that neither railways nor shipping nor docks are analogous to industries consisting of an enormous number of widely different concerns. On the other hand, it is quite practicable to have uniform national conditions of employment, overtime, night-work, Sunday-work, etc., and in many industries there is such national uniformity.
Wage-Relationships among the Workers
The war destroyed the delicate pre-war wage-relationship between the different classes of skilled, semi-skilled, and unskilled labour—in some cases the new relationship is a complete inversion of the old. This was partly the result of Government Departments concerned in production—the Admiralty, War Office, Ministry of Munitions—advancing wages of men under their control independently and without reference to one another, in some cases actually enticing men to their employment; partly of strong sectional Trade Union pressure, and partly of the celebrated 12½ per cent, bonus to time-workers, and 7½ per cent. bonus to piece-workers. Since the war, the want of balance has been aggravated by the action of employers and Trade Unions in industries supplying a national necessity, e.g. building, whereby wages were so raised that unskilled men were paid more than skilled men in a trade like engineering. There is no more active cause of industrial discontent. As an illustration of how it operates, at the Dockers’ Inquiry, the Transport Workers’ Federation protested against any comparison between dockers’ wages and those of other workers—they termed it a “capitalistic device” to deprive dockers of their rightful advance. The Transport Workers were members of the Triple Alliance; the railwaymen were also members. A few weeks later the railwaymen were claiming before their Central Wages Board an increase in wage because the dockers had obtained a minimum wage of 16s. per day. It is therefore vital to get back to, and as far as possible preserve, the pre-war wage relationships.
Wages and the Community
Public opinion is beginning to insist, as it ought to do, on recognition of the interests of the consuming community, which in the past have been wholly ignored. If an increase in wages in an industry is, and can be, secured by an increase in price, as when the output is a necessity, the workers in that industry benefit at the expense of the workers in other industries, and of the consumers generally. In other words, the public pays, as in the case of housing. If an all-round increase in wages in all industries is financed by a general increase in prices, then all prices are higher, and the commodity purchasing power of the increased wages is no greater than that of the wages before increase, and again the public suffers from the general rise in prices. Already a beginning has been made in recognizing the interests of the community in placing public representatives upon the Railway National Wages Board.
Are Higher Wages Practicable?
It is essential to realize the practical difficulties in the way of the workers getting the higher wages which all would like to see them receive. There was a Census of Production in 1907 which included all the manufacturing industries and mining, and covered half the wage-earners in the United Kingdom. It ascertained the “net output” for each industry for the year by estimating the selling value of the gross product, and subtracting therefrom expenditure on raw materials, including the product of other industries which were further worked up, and fuel and some other items. The net output thus obtained is obviously for each industry the only fund from which first, wages, salaries, interest on capital, rent, royalties and profits are, or can be, paid, and secondly, taxes, rates, depreciation, advertisement and sales expenses. Professor Bowley, in his The Division of the Product of Industry, Oxford: Clarendon Press, 1919, takes the total net output of £712,000,000 for the industries covered by the Census of 1907, and works out how much of it should be allocated against the first set of items. I set out below in tabular form his results (pp. 37 and 52):
| £. | Per cent. | |
|---|---|---|
| Wages | 344,000,000 | 58 |
| Salaries under £160 | 24,000,000 | 4 |
| Salaries over £160 | 36,000,000 | 6 |
| Interest on Capital at 4 per cent. and rent | 48,000,000 | 8 |
| Royalties | 7,000,000 | 1 |
| PROFITS | 133,000,000 | 23 |
| £592,000,000 | 100 |
Professor Bowley (p. 52) pertinently observes: “How far this 23 per cent., or £133,000,000 together with a relatively small sum (probably well under £10,000,000) for the salaries of managers of companies, is an excessive or unnecessary remuneration for the organization of industry employing 6,000,000 wage-earners and £1,200,000,000 capital, and producing £340,000,000 wages is a question that may properly be debated: it is this sum that formed the only possible source of increased earnings in this group with industries conducted as before the war and production at its then level” (the italics are mine). Supposing the absurd: that in 1907 the whole of this £133,000,000 had been taken from employers, and handed over to the wage-earners, the total average earnings of men fully employed in the industries in question, as Professor Bowley shows (p. 39), would have been only 41s. 6d. per week. Supposing half of the £133,000,000 had been handed over, the total average earnings of men fully employed (including tradesmen) would have been 35s. 2d. per week. But even to have handed over half, would, by reason of the great disparity between the profit-earning power per man employed of different firms in the same industry, have resulted in closing down many of the less profitable concerns. These figures show conclusively that in industry, as a whole, though there may be exceptions in certain particular industries, the ability to pay higher permanent wages depends upon greater and more efficient production.