Wage scale

“ 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 ”

“ 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. ”

“ It might make less frequent the recurrence of wage demands, originating in particular industries because of high profits in these industries, and spreading over a large part of the field of industry. For, as has been emphasized, 262 organized groups of wage earners will not accept passively a change for the worse in their position in the economic scale. Finally, there is a safeguard in the fact that no wage increase need occur in any industry except upon the demand of the wage earners in that industry. ”

“ 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. ”

“ TABLE 25.—UNION SCALE OF WAGES IN CENTS PER HOUR MAY 1, 1915TableList
Union organization is a more powerful factor in determining wages in these trades than technical knowledge and skill. A high degree of skill in a given trade brings little advantage in the matter of wages. By establishing a minimum scale below which no journeyman shall work, the union secures practically a flat rate of pay for most of the men in the trade. When there is much building work and good men are scarce, contractors sometimes pay higher wages to highly skilled workmen in order to secure their services. ”

“ Basic wage pay has been based on the place of employment and not on the work performed. Wage scales for identical work have differed substantially between branches of the economy and industry. In industry, wage scales have been lower in branches manufacturing consumer goods than in branches producing capital goods ”

“ 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. ”

“ 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. ”

“ 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) ”

“ 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. ”

“ Wage variations are interdependent It is indeed evident from observation, as it must be from theory, that whatever be the circumstances which produce the difference of wages in different occupations, and although they frequently vary in relation to each other (producing, as between time and time, and place and place, greater or less relative differences) yet the rate of wages in one occupation is always dependent on the rate in another ”

“ If the productive organization has at its command a plentiful supply of capital; if in the community there are many men possessed of a high order of business ability; if then, 55 labor for the commoner tasks of production is relatively scarce, the work of the ordinary wage earner will be a means of adding considerably to the total of market values produced. Or, as it is sometimes put, each use of labor will be an important use. Labor will be in great demand, and wages will be high. ”

“ 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 the wages of all classes or groups of wage earners are to be increased when the profits return in industry as a whole is above the approved level, the question arises as to the best way to calculate the wage increases, and the 255 most satisfactory basis for distributing them among the different groups of wage earners. ”

“ The first characteristic of the standard wage to be noted is that it is only a minimum wage for the occupation for which it is enforced. Standard wage rates are not of necessity the actual wage rates received, by all or even a majority of the wage earners employed upon the tasks to which they apply. They do sometimes become the actual rates received by most of the wage earners concerned; they become the wage, ordinarily, of those workers who fall around the average in skill and experience. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ If these assumptions were realized in fact, it would be correct to view the problem of wages as the study of one set of relationships that governed a basic level of wages—called the general rate of wages—with purely supplementary studies of the circumstances governing equalizing differences. The problem of wages would be a study of forces which were uniformly influential in relation to the wages of all labor. ”

“ 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. ”

“ These weekly wages are obtained by dividing the annual wage by 52. Often the weekly rate is much higher, but for many weeks the workers are unemployed; the only fair estimate is that which is based upon the annual wage.
Have we any right to be content with conditions like these? Is the average wage of the average worker, as it is here indicated, all that he ought to ask? Should society wish him to be content with such an income? ”

“ It should be observed, first of all, that neither 220 of these two doctrines upholds the rights of particular groups of wage earners. They aim to bring all wage earning groups to perceive that they are part of a larger whole; they emphasize the fact that the wages of each group are what they are, more because the total wage income is what it is, than because of the special type of work performed by the group. ”

“ An increase or decrease in nominal wages may mean much or it may mean very little.
The minimum wage level. There is a limit below which real wages cannot fall. This is the point at which the worker can manage to maintain himself and his family. ”

“ In the other, the wage earner is viewed primarily as a member of an occupational group or class, whose wages should be regulated by the standard of life of his group or class, rather than by strict measurement 142 of his own individual capacity. ”

“ This commission studied the wage schedules of skilled men in the building, engineering and printing trades in twenty-eight of the large cities of the United States and compared these wage schedules with the calculated cost of food and rent in these towns—weighing food three times as heavily as rent. The results are presented by single cities, by geographical groups, and by population groups—i.e., cities grouped in accordance with size of population. Real wages tended to be more equal as between population groups than between geographical groups. ”

“ 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. ”

“ Furthermore, in some industries it is difficult under a system of payment by result to arrange that the actual wages received by the average members of the group for average effort, will be approximately equal. Those are the industries in which there are a great variety of jobs with different rates, which can only be more or less accurately estimated in the "price list" ”

“ Nevertheless, the evidence here adduced is of a nature to warrant the conclusion that a large portion of American workmen are unable to maintain an efficiency standard of living, and to justify such early steps as will result in the presentation of more complete wage statistics. ”

“ 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. ”

“ Theorem T.1: With Tax [y, q] , minimum wage setting M = B + Tax [M] , and balanced growth, then: if B is indexed on the net average wage and x and c on inflation only, then M rises faster than other wages, and unemployment rises.
Note: That M rises faster than other wages is not inconsistent with balanced growth. For M is only the selection of one of the proper wages that is taken to be the minimum wage. ”

“ If the numbers in any group of wage earners are high relative to the uses in which the employment of the members of that group results in a considerable addition to the product of market values, the wages of that group will be low, and vice versa. The need of the productive system for any kind of labor, relative to the supply available to fill that need is an important factor in determining the reward paid for that labor. ”