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Prof. H. Clay ... ... ... ... ... ... ... ... 252
J. H. Clapham ... ... ... ... ... ... ...
Lawley ... ... ... ... ... ... ... ... ... 123
Smith-Gordon ... ... ... ... ... ... ... ... 614
E. Schwiedland ... ... ... ... ... ... ... 475
Back, W. J., The Attack upon the Organiser Class ... ...
... 138, 292, 655
Barone, Enrico. By Prof. A. Loria ... ... ... ... ... 486
... ... ... ... ... 654
... ... ... 311
Higgs, Henry, 106.
Hollander, Prof. J. H., 473.
Holland Rose, Prof., 263.
Jacobs, E. F., 248.
Lawley, F. E., 123, 254.
Lemberger, J., 437, 621.
Macrosty, H. W., 453, 465, 467.
Morison, Sir Theodore, 266.
Phillips, H., 235
Price, L. L., 449.
Reynard, Helène, 452, 620.
Robertson, D. H., 606, 608.
Schwiedland, Prof. E., 120, 121, 122,
269, 272, 273, 468, 474, 475.
Smith-Gordon, L., 614,
Vivian, Henry, 463.
Wallas, Graham, 90.
Wilson, R., 249.
Wootton, Barbara, 114.
THE ECONOMIC JOU
THE POST-WAR WAGES PROBLEM 1
BEFORE the war the economic changes to which wages had to be adjusted were gradual. Rates of wages, therefore, had a high degree of stability, and the relations between wages in allied or neighbouring occupations were equally stable. Wages, it may fairly be said, constituted a system, since there were well-understood rates for most occupations; the relations between these were stable and generally accepted, and a change in any one rate would prompt demands for a change in other rates. It was this systematic character of wages that made wage changes so simple a problem compared with to-day's task. The abstract and unanswerable general problem, What is a fair wage ? never came up; the problem was always the problem of a particular rate for a particular job. This was argued by reference to the normal relation between the rate for that job and other rates, and to relevant economic changes that might justify a departure from that normal relation. A change in the value of money might make necessary a whole series of changes in rates of money wages, in order to restore the previous relation between different trades, or between wages and profits; but the problem was limited to modifying an established system of rates, so as to keep it in harmony with the economic facts on which wages ultimately rest. This modification itself was done largely by collective bargaining, for the individual employer or wage-earner, not by him; the ordinary employer had to work to conditions of employment which were set for him. Hence the wage system lent some of its own stability to prices, which, even more than wages, have got out of step since the war.
The effect of the war was to dislocate this system and destroy
1 Paper read before Section F of the British Association at Liverpool, September, 1923.
No. 133.-VOL. XXXIV.
its stability, with tře result that we have been forced to face the problem of wages.'as a whole, and to consider absolute levels of wages in place of merely making adjustments. This result has been brought about in three ways: the war substituted sudden and extensive changes for the gradual changes to which we were
accustomed before; it interrupted the process of continuous :-adjustment of wages to changed commercial conditions; and it
introduced modifications, that brought wages into closer correspondence with war-time economic needs, but caused them to diverge from normal commercial needs.
The rise in the cost of living, the profits of munition makers, the early losses and subsequent profits of other manufacturers, dilution, the creation of new industrial districts, the Government control of railways and coal-all involved either the need or the opportunity for extensive changes in wages, which the existing machinery of collective bargaining was too cumbrous to cope with. The orderly modification of wages to suit changes in the supply of different kinds of labour and changes in the demand for different kinds of work necessarily stopped, because the normal commercial basis of employment was lost. Instead, we had an attempt on the part of the Government to limit wage changes to bare cost of living advances, and to rely on other, authoritative, methods to direct labour to the changed purposes to which the war had given rise.
Government control of wages, however, was successful only in lessening the force of the pull that the war enabled favoured classes of workers to exert; it did not neutralise it. Hence there were important modifications in wages, justified by the needs of industry in war-time, but bearing no necessary relation to peace-time commercial conditions. Unskilled labour, male and female, being for the first time insufficient to meet demand, was able to improve its relative position; the Committee on Production's policy of awarding flat-rate advances to meet the increased cost of living was a recognition, probably unconscious, of the improved bargaining position of the labourer. Control lost much of its effectiveness, because it was not imposed at the outbreak of war; by the time it was imposed systematically, considerable divergences had already taken place in the advances secured by different classes of workers. And in some directions control accentuated rather than prevented divergence from peacetime ratios. The encouragement of systems of payment by results, before sufficient experience was available to set piece-rates and bonus-times that would yield without wide variation earnings of the intended amount, led to wide divergences of wages, and created the so-called “ skilled man’s grievance,” which the 12} per cent. bonus of 1917 was intended to remove. The pledge to pay dilutees the same rates as the skilled men whose place they took for the same work involved disturbance in normal relations. The practice of adjusting wages by national awards, coupled with the reservation of the right to bring up the case of exceptionally low-rated districts, led to a levelling up of wages in each occupation. So far as the local differences thus swept away were due to permanent economic differences, the effect of this levelling up was to force wages out of correspondence with normal commercial conditions. And these war-time innovations lasted just long enough to encourage the workers who had gained by them to hope that they would be permanent, but not long enough to extinguish the recollection, and therefore the influence, of the pre-war ratios that they superseded.
In this dislocation of the pre-war relations between the wages of different classes of work-people is to be found the explanation of a large part of the discontent that has led to strikes and lock-outs since the war. If workers before the war had insisted on questioning every rate, on accepting none that could be neither justified by an acceptable ethical argument nor enforced by a lock-out, we should not have enjoyed the (relative) industrial peace that we did. In fact, as we saw, the problem of wage-fixing was limited to adjusting particular rates to particular economic changes, always with reference to a system of rates that was generally accepted. Since the war this necessary basis has been missing. Few workers could not point to someone whose relative position had improved more than their own, so that any improvement they had secured left them unsatisfied. The habit of comparison with allied and neighbouring classes, which before the war acted as a restraining force, preventing a group from exploiting to the full any temporary bargaining advantage it possessed, now operated in the opposite direction, exciting further demands. The influence of the pre-war system of relations was still operative, since it led workers who had not maintained their position in the scale to expect and demand compensating advances; but it did not operate as an effective argument for a reduction where workers had improved their relative position.
Employers were equally without guidance as to what they could concede, since commercial conditions were so hard to judge. They resisted demands for increases in wages on the ground that