Problems in American Democracy

by Thames Williamson

Due to the influence of many complicating factors, the status of compulsory arbitration in these two countries is uncertain. Many students of the question maintain that this form of arbitration has materially reduced industrial warfare; on the other hand, other authorities declare that compulsory arbitration in New Zealand and Australia has not markedly improved industrial relations.

194. COMPULSORY ARBITRATION IN THE UNITED STATES.—Although the principle of compulsory arbitration has been familiar to American students of labor problems for more than a quarter of a century, there is as yet very little sentiment in favor of its application to industrial disputes in this country. The explanation of this is not far to seek. Individualism is so strong in the United States that compulsory arbitration is regarded by many Americans as an unwarranted interference in private business. It is still generally true that both labor and capital prefer to settle their disputes in open struggle. Equally important, perhaps, is the feeling that compulsory arbitration laws would nullify the constitutional guarantee that no citizen shall be deprived of life, liberty, or property without due process of law. [Footnote: For an explanation of this point, see Chapter XIX, Section 214.]

However, a definite step toward compulsory arbitration was taken when in 1920 the State of Kansas established a Court of Industrial Relations "for the purpose of preserving the public peace, protecting the public health, preventing industrial strife, disorder, and waste, and securing regular and orderly conduct of the businesses directly affecting the living conditions of the people." The law of 1920 declared illegal the suspension of work in those industries which are designated as essential and necessary to the community life. Industrial disputes arising in such industries are subject to compulsory arbitration by the court. The merits of this court are still being debated. Some authorities declare that the court has already demonstrated its value, but other observers claim that so far this tribunal has not operated to reduce labor troubles in Kansas.

195. STATUS OF THE DEMANDS OF LABOR.—For a number of years the attitude of labor has been clearly aggressive, while the attitude of capital has tended to be one of resistance. In view of this fact, the simplest way of considering the merits of the industrial situation is to examine the demands of labor. The justice of these demands cannot be gone into here, but a few words of general application may be helpful.

The proper determination of wages depends, of course, upon the particular circumstances. No general rule can be laid down, except the very obvious one that wages cannot permanently go so high as to wipe out profits in an industry, nor yet so low as to render it impossible for the workmen to secure a decent living.

The steady improvement of living and working conditions is desirable, and is a challenge to any progressive society.

Shorter work hours are desirable, wherever the cutting down of the working day does not too greatly hamper production. Many economists feel that an eight-hour day will prove a social gain only if introduced gradually. They believe that it should be introduced in proportion as the industrial productivity of the country increases to compensate for the shortening of the working day.

Opposition to the introduction of labor-saving machinery is both useless and short-sighted. The officials of most unions now advise workmen not to oppose the adoption of machinery, but rather to fit themselves to operate the machines.

The question of a closed shop or an open shop is largely a matter of opinion. The problem will probably continue to be disputed for a long time to come. Many students of labor conditions feel that the closed shop is justifiable only when accompanied by the open union. By an open union is meant a union into which all laborers competent to do the work are admitted freely. Where the open union principle is adopted, Professor Taussig points out, the closed shop is no longer a monopolistic device to shut out competition and raise wages for a small group. It becomes, instead, a means of promoting mutual aid and collective bargaining.

Many employers still refuse to recognize the principle of collective bargaining, but from the social point of view collective bargaining is desirable. In many cases it so strengthens the position of the laborers that they are able to compete with the employer more nearly on terms of equality. Under such conditions competition in the labor market is in a healthy state. The difficulty is, of course, that some unions may take advantage of their strengthened position to enforce unduly severe conditions upon the employer.