Wage rate

“ In some industries, such as the building trades, where contracts are made upon the basis of a legally fixed rate, this rate is frequently the maximum. Yet such instances are in the minority. Employers do not reduce the pay of their most competent workers because they are compelled to pay those less qualified at a minimum rate. ”

“ There are, also, the handicaps and hazards attached to the learning of a new job or trade even though the new job holds out hopes of considerably better wages than the old one. All such facts as these—for but a few examples have been chosen from among many—however, are reconcilable with the theory of a general rate of wages. They are but minor qualifications of a broad general principle. Other facts challenge that theory more seriously. They really do point to the existence of relatively separate groups of wage earners, each with an economic career somewhat independently determined. ”

“ But if a single bargain is to determine the pay of a large number of men, there must be a common standard. In every employment on a large scale the men are necessarily grouped together and their pay is determined by a common rule. This is true even in non-union shops. It is generally assumed that the standard rate of labor organizations means a uniform wage for each member, but this is not the case ”

“ This system means, as I have shown, an addition to the day rate of wages, and therefore the unions might arrange for a lower wage to be paid to semi-skilled workers, and rely on individual efficiency to bring wages approximately up to the union rate. ”

“ That argument is that it will prove impossible to maintain uniform standard wage rates throughout an industry in which the various enterprises are distributed over a wide area; in the several parts of which area the cost of living, the general conditions of labor, and the demand and supply situation for labor differ considerably. ”

“ There is undoubtedly a great deal of truth in this charge; the man who hastens the pace is said to be taking “blood money,” and sometimes a maximum wage is set which the members are forbidden to exceed. On the other hand, it may fairly be said that while the union regulation of wages does tend to produce greater uniformity, the union rate is usually higher than the competitive rate would be, that is, wages are leveled up, not down ”

“ The most important of these possible departures from the ordinary basis of assessment is the enforcement of the same wage rates for men and women when they are employed 271 upon the same work. The living wage in any industry should be a standard wage, subject to all the qualifications and limitations of other standard wage rates.
The success of the living wage policy will depend in a great degree upon the good judgment with which it is adapted to the conditions obtaining in each individual industry or occupation in which it is enforced. ”

“ It is almost impossible to say, except for concrete situations, to what extent irregularity of wage rates is due to differences in individual efficiency and to what extent to other causes. Such factors as differences in bargaining power, differences in the policy or efficiency of the employers, slight differences in the character of the work performed, local differences in the supply and demand situation for the type of labor in question, and the like, certainly account for a great many of the irregularities. ”

“ The employers are not likely to seek such wage rates as will not procure the needed labor supply; and only in rare cases are the wage earners likely to press for increases of wages that would bring about an increased measure of unemployment. ”

“ The actual range of difference between the various wage rates being paid for the same occupation in different enterprises should be given importance in the judgment as to whether standardization should take place at the level of the higher range of wages. ”

“ Since profits generally are large, production tends to be stimulated and the volume of production increases. The turnover of industry is quickened somewhat. Plants are more fully utilized, and unemployment is small. More overtime is worked. The total earnings of the wage earners are likely to advance more than wage rates. The extent of the divergence between the increase in hourly or piece rates and weekly or yearly earnings is likely to vary greatly according to the nature of the causes of the price movement. ”

“ 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. ”

“ With these limitations of the terms, wages not only depend upon the relative amount of capital and population, but cannot, under the rule of competition, be affected by anything else. Wages (meaning, of course, the general rate) cannot rise, but by an increase of the aggregate funds employed in hiring labourers, or a diminution in the number of the competitors for hire; nor fall, except either by a diminution of the funds devoted to paying labour, or by an increase in the number of labourers to be paid. ”

“ Firstly, that "in any attempt to estimate the extent to which men receive wages above the minimum on account of superior efficiency, it is important to bear in mind that the minimum in different scales may stand in very different relation to the modal or predominant wage. The proportion of men receiving more than the union minimum is frequently large because the competitive wage has increased since the minimum was established" (page 116) ”

“ It brings the living wage determination into direct relation with—or makes it relative to—the productive capacity of the industrial system at the time and place in question. For a study of the standard of life of the wage earners and the middle classes of the community is of great assistance in indicating the standard of life to which it may be possible to raise even the worst paid industrial groups, by those adjustments in production and distribution which it is the object of a living wage policy to produce. ”

“ These can only be understood by a study of the economic facts and arrangements which govern distribution, and by weighing many questions of social and economic expediency. To talk about basing wages solely on the effort of the worker is to ignore the obvious fact that much of the most laborious work is the worst paid.
The exponents of scientific management have not discovered a law of wages; they have simply elaborated a method of wage payment. ”

“ WAGES.—COST OF PRODUCTION OF LABOR.
As the cheapening of the means of subsistence, when the circle of wants of the laboring class has not correspondingly increased, leads to a decline of wages, so an enhancement of their price must, when wages are already so low as only to be able to satisfy indispensable wants, produce an increase in the rate of wages. ”

“ The standard of life and comfort affects the wages of labor, and there is constant effort to make the wage correspond to this standard. It is an unending and often bitter struggle, nowhere better summed up than by Thorold Rogers in his "Six Centuries of Work and Wages,"—a work upon which economists, however different their conclusions, rely alike for facts and figures.
We must then admit in degree the tendency of wages to a minimum, especially those of unskilled labor, and accept it as one more motive for persistent effort to alter existing conditions and prevent any such culmination. ”

“ Real wages are a very different thing from the Cost of Labour, and are generally highest at the times and places where, from the easy terms on which the land yields all the produce as yet required from it, the value and price of food being low, the cost of labour to the employer, notwithstanding its ample remuneration, is comparatively cheap, and the rate of profit consequently high. ”

“ The broad fact that the United States census of 1870 estimated the average annual income of our wage-workers at a little over $400 per capita, and that the census of 1880 estimates it at a little over $300 per capita, is the quite sufficient evidence that there is a labor question coming upon us in this country. The average wages of 1870 indicated, after due allowance for the inclusion of women and children, a mass of miserably paid labor—that is, of impoverished and degraded labor. ”

“ The lag of wages behind prices varies in degree in different industries and occupations, for neither prices nor wages go up uniformly. The general direction of wage change is marked, but there is nevertheless considerable variation in the amount 93 of wage change. ”

“ If there are a thousand workmen employed, getting $2 each per day, that would be a wage fund of $2,000 a day. If, when prices fall and business becomes dull, the employer should want to reduce the pay of each workman to $1.50 a day, and if the workmen, by striking, should prevent that decrease, and if, then, 25 per cent. of their number should be discharged, the loss to the working class, as a body, and to the community at large, would be the same as though the wages were reduced to $1.50 a day. ”

“ The case of the living wage policy rests upon the opinion that the introduction of living wage standards will give rise to a series of adjustments in production and distribution. And that the net sum of the results of these adjustments, perhaps only after a temporary period of dislocation in some instances, will be to increase the wages of the lowest grades of wage earners—without doing 192 equivalent harm in any other direction. ”

“ The Administrator also considered the factors for determining whether classification should be made for wage differentials within the industry. After examining numerous studies of living costs made by the Bureau of Labor Statistics of the Department of Labor he concluded that the costs of living in the north exceeds that in the south by about 4.6% on the average, and that the differences in costs between cities in each region greatly exceed the difference between the two regions as a whole. ”

“ This is true of the salaries of clerks, teachers, and public officials, and of many professional fees. It is also true, to a considerable degree, of wages.
In recent years salaried men and wage earners have been losing; for, while salaries and wages have risen, they have not kept pace with the rise in prices. Some wages have remained unchanged for months or years after the cost of living has risen, and then they have only been forced up by strikes. According to the figures of the United States Bureau of Labor Statistics, real wages, i.e. ”

“ It should apply to all groups of workers whose average annual earnings fall below the sum settled upon by the constituted agency as the minimum necessary for the fulfillment of the living wage idea. The statistical definition of the term "average" as just used should also be left to the constituted agency. ”

“ If this basis were to be used in adjusting the wages of all other groups of workers it is evident that during periods of changing prices there would be a different set of wage differentials for every position of the price level. And, furthermore, during periods of rising prices, the lowest paid classes of workers—those who could do least to meet the rise in the cost of living by changing their consumption habits—would receive the smallest wage increases. ”

“ In fact, if any large number of workers earn less than this amount, we will find it impossible to maintain the levels of purchasing power needed to sustain the stable prosperity which we desire. Raising the minimum to 75 cents an hour will provide the wage earner with an annual income of $1,500 if he is fully employed.
The proposed higher minimum wage levels are feasible without involving serious price adjustments or serious geographic dislocations.
Today about 20 percent of our manufacturing wage earners--or about 2 million-earn less than 65 cents an hour. ”

“ 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. ”

“ As regards the rate of wages in particular occupations there is no doubt but that at least for a time such methods may cause a considerable rise of wages, only limited at first by the imperfection of the control exercised by the union over the number competing in the labour market and by the extent to which the rise in the cost of production so caused is checked by the competition of goods imported from abroad, or of alternative commodities, or by the loss of foreign markets, or the diminution of home demand. ”

“ The direction taken by modern industrial life towards the harmonious conciliation of both classes, by means of the wage-list, the wage-tariff, and the sliding scale with a fixed minimum wage for entire branches of [Pg 104] industry, and so forth, promises an important advance towards the establishment of a more normal wage-system. ”

“ It is not merely the wage scale that must be kept up but the amount of wages that a worker receives over the course of a year. This is only another way of saying that what we need, fundamentally, is a broader distribution of the profits of industry. ”

“ The relative scale of the cost of living at the different points to which a standard wage might be applied does not usually remain fixed over a considerable period. Small changes and shifts in the relative scale occur constantly, and even large 160 changes may take place within a short time. Experience has shown that wage differences which rest upon a fluctuating basis are apt to give rise to misunderstanding, and to be provocative of unrest. At best, only the relatively permanent and great differences in the cost of living between different points could be taken into consideration. ”