great importance, especially if we take as the wage-earning unit the family and not the individual. At the present time, in Northumberland, a "hind" (i.e., agricultural labourer) is more valued if he has a large working family and the family earnings are relatively large. IV. Regularity of employment must always be taken into account. One of the most frequent errors is to assume constancy of employment when the reverse is the case, and to convert hourly, daily, or weekly wages into yearly wages by a process of simple multiplication. V. Liabilities for extra work on various occasions are sometimes of importance, especially in cases in which the work done consists in services rendered. Thus, in attempting to estimate real wages, we have to consider all the various discomforts (and occasional comforts) involved in the quantity of labour as well as all the conveniences which the nominal wages will purchase, and all the supplements in kind. § 3. Wages as Payment for Work done. From the objective standpoint, we have to consider wages as payment made for a certain amount of work, e.g., raising so many foot-pounds, or rendering so much service. The quantity of labour (subjective) is now of importance only indirectly as an obstacle to be overcome, or as affecting the efficiency of labour. To the employer the vital economic consideration is not what the labourer feels, but what he does; and, again, not what the labourer gets in real reward, but what his work costs. Efficiency of labour takes the place of quantity of labour as fundamental, and real cost the place of real wages. The causes affecting the efficiency have already been examined: qualities of race (mental and physical), the supply of food and other necessaries, sanitary conditions, intellectual and moral activities of various kinds, and, finally, the elements embraced in division of labour 2 and the organisation of industry. As regards the real cost of labour, we must take into 2 Bk. I., Ch. VII. 1 Bk. I., Ch. V., § 4. account not only the money paid, but everything which involves any sacrifice on the part of the employer; in brief, the various elements noticed in the last section as affecting the real reward must be taken into account conversely as influencing the real cost. The amount of work done may be measured1 in different ways: (1) Simply by time. In this case, however, if the agreement is voluntary, there is always a tacit or expressed condition that so much work is done, measured by some other standard; and if the labour is forced, punishment of some kind is used to secure the same end. (2) In some cases a definite task is set to be done in a specified time, e.g., to mow an acre of corn in a day. (3) Sometimes the work is measured by the piece, the time being appar ently left to the choice of the worker. Here, however, there is, as before, really a condition implied or expressed that a certain minimum is done in a certain time. Corresponding to these modes of measuring work, we have time-wages, task-wages, and piece-wages. It will be seen, on reflection, that the differences depend on an adjustment of emphasis; domestic servants, for example, almost of necessity, receive time-wages, but unless they do a certain amount of work of a certain quality, they will be dismissed. The variety, however, in the services rendered, makes an exact measure of the work impossible. Again, in task-work or piecework, the time occupied is often of great importance, and more than proportionately higher wages will be paid if more work is compressed into a given time, e.g., in all operations dependent on the weather. Piece-work done in overtime, that is to say, beyond the normal hours of work, is generally more highly paid. § 4. Conflict of Interests between Labourer and Employer. It is to the economic interest of the worker to give a minimum quantity of labour for a maximum real reward; of the employer to obtain a maximum of work at a minimum 1 Cf. Schloss, Methods of Industrial Remuneration. See also Economic Journal, December, 1892. real cost to himself. Thus the elements of conflict are always present, and are generally intensified by prejudice and want of appreciation of the real interests involved. To take the simplest case: the worker naturally wishes to work fewer hours a day for higher wages, whilst his employer wishes for more hours' work and less wages; the former is apt to forget that wages, after a certain point, must fall if hours are reduced, whilst the latter does not allow enough for the increased efficiency of short hours and good pay. But the simplest case is not a fair sample of the actual complexities of the wages question. There is not one of the elements which go to make up a "quantity of labour," that may not give rise, at any rate, to an apparent conflict of interests; and this is equally true of the corresponding real wages. When we leave the simple elements of time and money, we may seem to enter the region of vague generalities; but good and evil of various kinds may be very real, although not capable of exact measurement, and it is certain that the real economic progress (or degradation) of the working classes can only be estimated when the various conditions of life and work are taken into account. Between the lowest forms of slavery and the highest types of free labour there are numberless gradations. We read of slaves, in ancient times, who were treated by their masters with the utmost respect and even friendship, just as, in modern times, we have instances of nominal freedom with real slavery. It is precisely in the determination of the conditions of work, both general and special, that custom is often of supreme importance. Even when time, money, and quantity of work are fixed by free contract, there are always a number of tacit conditions imposed by custom, as well as others compulsory by law, which, as already explained, may economically be considered as a species of custom. In the conflict of interests between labourer and em ployer, custom, in the broad sense here understood, has sometimes favoured one and sometimes the other. On the whole, however, in tracing the history of progressive societies, competition and freedom of enterprise seem to have continuously diminished the sphere of custom and authority in the determination of work and wages. One of the most important and interesting of economic inquiries is whether, by this process, the condition of the working classes has been ameliorated; for, if the answer is in the negative, the presumption may be established in favour of a restriction of individual freedom. The difficulty of the question is increased when we observe that custom, in some of its forms, has in reality increased industrial freedom, whilst appearing to fetter it, and that sometimes custom is, as Professor Marshall points out,1 a disguised form of slowly moving competition. § 5. Harmony of Interests of Labourer and Employer. In many cases the economic interests of labourer and employer are only apparently in conflict, the difficulty is for the stronger side to recognise the real harmony. Rogers 2 has observed that every act of the legislature that seems to interfere with the doctrine of laisser-faire, and has stood the test of experience, has been endorsed, because it has added to the general efficiency of labour. The principle involved may be carried further; there can be little doubt that many institutions, laws, and customs, apparently only designed to diminish the intensity of labour, have increased also the work done for the employer. Similarly, a rise in money wages has often resulted in a diminution of the cost of labour,3 and that cheap labour is dear labour has long ceased to be a para 1 Principles, First Edition, p. 14. 2 Six Centuries, p. 528. 3 The old ideas of Petty, Child, and other writers in the seventeenth and eighteenth centuries was that low wages and high prices of food forced labourers to work at higher pressure, whilst high wages made them lazy. Cf. Brentano, Arbeitslohn und Arbeitszeit, Second Edition, p. 2, and Appendix. LIBRA OF TO UNIV dox.1 Especially when we regard the question from the national standpoint, and over a considerable period, does this real harmony become more apparent. At the same time it must be admitted that the pre-established harmonies of writers like Bastiat are only tenable with the supplement of an optimistic natural theology. The conflict of interests in some points is as real as the harmony in others. It is true that a general increase in the national productive power tends so far to benefit all classes, and if there is more to distribute, all kinds of income may possibly experience a rise simultaneously. It was a favourite doctrine with Adam Smith 2 that it is not the actual greatness of national wealth, but its continual increase, which occasions a rise in the wages of labour, and his argument assumes that the incomes of employers being increased, there is more to spend on labour. He also maintained, however, that the most decisive mark of the prosperity of any country is the increase of the number of the inhabitants. The theory of wages, implied rather than expressed in the first position, is at any rate incomplete, and in spite of the second, may be easily turned or twisted into the wages-fund theory, from which Mill made such unfortunate and unsound deductions. But Adam Smith was always as much a historian as a theorist, and he gives important examples of the process that he goes on to explain. But it is clear that though the general increase in wealth may increase all incomes, it may do so very unequally, and, in spite of an average rise, in some cases may be accompanied by a diminution. Thus there is always room for conflict; profits, rents, and wages may rise together, but a rise in one may also be due to a fall in one or both of the others. More broadly, the general economic condition of all classes may be improved 1 See The Economy of High Wages, by J. Schoenhof, for an excellent collection of modern instances. 2 Bk. I., Ch. VIII. 3 E.g., the growth of the American Colonies is contrasted with the stationary state of China. |