The Settlement of Wage Disputes

mulation of sound policy.-Section 2. The present economic position of the wage earners.-Section 3. Their relations to the other groups in industry. The acceptance of the practice

rise.-Section 5. The economic position of the directors of industry. Industrial control an attribute of ownership. Two important suppositions used in t

related problems. However, any policy of wage settlement that might be adopted would be also an important influence in other industrial issues outside of those it settles directly. It would affect in numberless ways the relations between the groups concerned in production. It follows that no policy of wage settlement will work successfully unless it accomplishes two ends. First, i

impossible to review these matters adequately in this book. The most that can be attempted is a brief survey of those aspects of these questions with which the problem of wage settlement must definitely concern itself. Such a survey will occu

o own invested capital; and thirdly, of those who direct industrial activity. Questions of industrial relationship between these groups can then be presented at the point at which th

whose incomes would be governed directly by any scheme of wage settlement. When using the term in the course of theoretical discussion, as in the ordinary analysis of distributio

ur industrial leaders and of the more skilled groups of wage earners. There was no great difference either of educational or of industrial opportunity between the mass of men. The few great financial centers of the East may have been the home of an established and separate economic class, but this class was not one of the most important industrial forces. The standard of life as well as the economic prospects of all wage earners who had been thoroughly absorbed into the community encouraged a feeling of equality and independence. The tradition of our period of industrial expansion was that most men should seek to operate their own farm or business (and be their own master). This tradition could flourish as long as a great variety of industrial opportun

ined individuals, who in youth are manual workers frequently succeed in discovering openings to the higher industrial positions. The need for business ability is still too great to be supplied by any one level of society; all are drawn upon. The thought that each man can attain

f a wide sphere of industry. Indeed, the undertaking of new business enterprises has itself become to no small extent the function of organizations rather than of individuals. Further the personal co?peration between employer and the best men among his wage earners which was in the past the ordinary method of business education is not often practised now. Ind

t of a specialized form of education for industrial leadership which the wage earner does not receive. Indeed, with the ever increasing complexity of the problems of business enterprise, prolonged education, itself, has become of more importance in determining individual chances of success. All these developments have greatly lessened the chances of the ordinary wage earner for any position of owne

has furnished the United States with the bulk of its supply of unskilled and semi-skilled labor, is a commonplace of American industrial history. The effects of this change have been largely governed by other industrial events, chief among which may be put the increased concen

, that they are beginning efficiently to take the place of Irish and others who have hitherto acted as foremen: while large numbers of them are to be found in relatively light, but monotonous work in large cities. They may lack the resolute will which put many British, German and Scandinavian immigrants on terms of equality with native Americans. But they are quick withal, versatile; and as a rule, easily molded; they take readily to the use of machinery; and they have no tradition that could prevent them from doing their best in using semi-automatic machines, which are simple of handling, while doing complex work. Thu

e led to an increased emphasis upon "general ability" and a lessened emphasis upon "special ability." To quote Marshall again, "Manual skill that is so specialized that it is quite incapable of being transferred from one occupation to another is becoming steadily a less and less important factor in production. Putting aside for the present the faculties of artistic perception and artistic creation, we may say that what makes one occupation higher than another, what makes the workers of one town or country more effic

eadiness upon monotonous and nerve straining work both upon machine and hand tasks. It seems likely that they will continue to displace men in many of the simpler mechanical jobs. Many individual women wage earners have risen to tasks of responsibility and direction. This number

f outlook and of animating spirit among the various groups or classes. There is no very settled opinion among them as to th

de. The obligation of the wage earners to the enterprise which employed them has been considered at an end with the performance of the work they were employed to do. Similarly, the obligation of the enterprise to the wage earners has been considered fulfilled by the payment of wages earned. The wage ea

contract and of enterprise certain other rights. These may be collectively described as the right to organize and to use their organized strength collectively in all ways which may be reconciled with the public interest. Some of the greatest industrial conflicts of recent years have been consequences of the efforts of the wage earners to es

organization" of the relationship between employer and employees in large industries, but contributed little to the matters in dispute. Their view was expressed as follows: "To-day we have a complex interweaving of vital interests. But we have as yet failed to adjust our human relations to the facts of an economic interdependence. The process toward adjustment, though slow, nevertheless goes on. Right relations between employer and employee, in large industries, can be promoted only by deliberate organization of that

dminister any policy of wage settlement some means of representation for the wage earners will be indispensable. And it is likely that satisfactory representation can only be obtained by the organization of the wage earners. Furthermore, this organization will have to be on a wider scale than shop organization, although shop organiz

isarmed. If the trade unions show none of these qualities, the common sense of the community will resist them in the name of traditional equality and democracy. Popular movements such as trade unionism must make mistakes constantly, but because of the spirit behind them, they have great powers of recovery. The trade union movement, as a whole in the United States, has not yet shown a thorough comprehension of

l which trade unionism faces in the United States to-day; it is the example trade unionism must set before it can expect willing acceptance as a fundamental industrial institution. Unless the union movement proves itself

ittle product or both. Modern industry has been shaped, perhaps predominantly, by the effort to support large numbers at a high standard of economic existence. Production has become greatly subdivided among specialized groups. In industry to-day, the wage earners of various kinds perform their tasks with the assistance of such equipment, mac

individuals and the capital which industry has used has been provided by private owners. We have depended upon the personal motives of individuals to persuade them to refrain fr

ad to success and power-that is by ambition and rivalry; much by the idea that pecuniary success is itself an achievement, a mark of ability and leadership. The ordinary hopes of the multitude of men, such as the desire for a secure existence for themselves and their family, and the wish to figure among their friends as an equal, have been the steadiest motives of all. Saving is not one of the most deeply implanted habits. It is a habit that is closely bound up with the qualities of personal

ld be marked by even a wider distribution of comfort than men saw around them. Thus it has been urged that by devotion to industry and by consuming less than was produced, the time would come when the world would be so well equipped that none of its workers would have to be in want of the economic essentials of a satisfactory life. In Mr. Keynes words, "Society was working not for the small pleasures of to-day, but for the future security and improvement of the

lus of the belief that individual effort was throwing open vast new resources to the world

ere tensions between those who receive the greatest share of the income from accumulated wealth and the other groups engaged in production. It is pertinent to inquire int

nally rapid expansion, during which the opportunities for accumulation were both unusual and irregularly distributed. But the explanation seems to lie deeper, for the same condition is to be found in all advanced industrial nations. The opinion may be ventured that it is char

ears to be a group interest. And, indeed, if the lag of diffusion behind concentration passes a certain point it is in reality a group interest-in the sense of being opposed to the general interest. Secondly, great inequality of wealth leads to the growth of institutions incompatible with the purposes of a democracy. These are a cause of economic antagonism, which has its reflection in industrial relations. Thirdly, it has evil psychological effects. In a country bred upon the general ideas of de

task is presented of directing and safeguarding the course of capital accumulation. It is evident that no policy of wage settlement can, of itself, do a great deal in this regard. Something it can do. That, it is ventured, shoul

rifice involved in much accumulation, and the need o

cts of inequality of we

e no less important factors in effective production than capital itself. And that the possession and use of t

y be said, cannot be weighed mechanically,

n the control over the conditions of production. Only then will the effect of industrial methods on the welfare of the wage earner receive constant attention, and the desire of the wa

mely, the present economic position of those who perform the work of direction in indu

the capital invested in particular enterprises may not carry with it any rights of control or direction-as for example, the capital invested in railway bonds, or the temporary borrowings from the banks contracted by most industrial concerns-does not affect this truth. It is entirely conceivable that enterprises might be carried on wholly with the use of such capital as gave no title to control over the conduct of

indirectly, the operation of industrial enterprises, which is called profits. It is hardly necessary to remark that the same individual may be in receipt of both forms of income. The second form of income "profits" is a mixed form of income which may be analyzed in different instances, into very different quantities of the elements which make it up. This mixed form of income, which goes to the owners of industry by virtue of thei

ge policy that is developed in the course of this book is based on the assumption that the large majority, if not all, of the industries which would be included in it, were it adopted, will remain privately owned and operated. At the same time, it is by no means outside of current possibilities that certain of our greatest industries may change o

icable under a régime of private enterprise. On the other hand, if public ownership should be extended only to a very few though important industries such as the railroads and coal mines, it is almost certain that the principles underlying the settlement of wages in the publicly owned industries would

e control over the conditions of production. Alongside of this general aim may now be put one other, which cannot in any way be embodied in the terms of wage policy, but which should be given a leading place in the calculations of those who execute the wage policy and therefore possess educative influence. That purpose is to try,

TNO

nt Increase in the Size of the Representative Business Establishment

to 318,000: if we go back to 1850, when workshops, etc., were reckoned in, we find the average output of an establishment to have been less than 4,000 dollars." And again "Industrial establishments having a less output than 100,000 dollars accounted for 20.7 per cent. of t

American Statistical A

. See for analysis of occupations of immigran

ciples of Economics" (

re still rare, however. If common laborers are admitted in the near future to unions of other workers in the same industry, they will be admitted not from self interest, but from more altruistic motives, from a gr

h individuals. It is likely that the Court, in its efforts to get disputes settled before they reach it, will find it necessary to encourage organization. A relat

to an analysis of a complex series of interactions including a study of the action of the banking systems, and the methods of industrial finance. To attempt to state the various forms of capital would involve the same process-for capital is to som

misleading, for present purposes, to say that the capital which is at the command of industry in the U. S. a

," pages 18-20. See also A. Marshall, "Industry and Tr

he Change in the Distribution of the National Income, 1880-19

tration of Wealth in the United States mean what they are commonly assumed to mean?