Sweated industry and the minimum wage

Sweating not unknown in the colonies—Instances published by Otago Daily Times—Underpaid workers in 1895—Epidemic of strikes—State arbitration proposed in New Zealand—Conciliation Boards and Court of Arbitration—Details of New Zealand law—Objections raised by critics in England—Difference in position of British and of New Zealand trade unions—New Zealand freed from strikes—The question of the poorest workers—Wellington match makers—Tailoresses under an agreement and tailoresses under an award—The under rate worker—Victoria and Wage Boards—Campaign of the Age—Factory Act of 1896—Details of Wage Board scheme—The first six Boards—Boards in 1905—Several instances of the “determinations” of Wage Boards—Effect on home work—The case of New South Wales—Summing up.

The evils of underpayment, being the invariable result of unlimited competition, inevitably show themselves in any country where trade has come into existence. The oversea colonies of Britain are not overcrowded, are naturally rich, and ought to be free from evils accumulated during an old civilisation. Yet, thirty years ago, instances of underpayment, exactly on all fours with those exhibited in the Queen’s Hall in the summer of 1906, were to be found in New Zealand, in South Australia and in Victoria.

There, as here, newspapers called attention to the facts, and aroused the public conscience. In January 1889, the Otago Daily Times, “a journal distinguished amongst its fellows for caution and restraint of language,” published a series of articles about underpaid labour in Dunedin. “One woman deposed that she might make 3s. 6d. on a good day but it would be by stitching from half past eight in the morning until eleven at night.”^[82]

“Yet she counted her lot at that time almost happy, for she had lately escaped from a factory where, do what she would, she could not earn more than eighteenpence daily by working until all hours of the night.” Another woman reported that she “finished cotton shirts at 1s. 6d. a dozen”^[83] and that she could “get through a dozen and a half in the factory between nine o’clock and six in the evening; then she carried a dozen more home and sat up sewing by lamplight until they were finished.... On one of these evenings she had a stroke of good luck; she was allowed to take away a dozen flannels as well as her dozen shirts. Both bundles were done when she went to bed—at three o’clock in the morning—and by that night’s work she earned a whole shilling.” (p. 30.)

Individual and combined action followed these revelations. A union of tailoresses was formed and an effective factory law passed. Wages, however, continued upon a downward course, and in 1895 “there were in the colony 591 factory girls who were getting no pay for their work, and 175 who were paid half a crown a week or less.” (p. 34.) Such facts as these were enough to show to thoughtful observers that, unless special measures were introduced, the evils of European countries would grow with the growth of the colonies. Another series of events helped to focus attention upon labour problems. This was the epidemic of unusually wide-spread and bitter strikes which ran through the various colonies in the early nineties. Into the details of these it is unnecessary to enter. It is enough to say that, in at least one instance, associated workers demanded what they had no right to demand and that, in at least three instances, associated employers refused even to confer upon the demands of the workers. The mining companies, for example, declared in a public manifesto that “The mining companies claim the right to work the mines as they deem best and cannot refer this right to arbitration.” (p. 95.) Acts of violence were committed; the public was greatly inconvenienced; much money was lost; and people began to look about for some legislation that would obviate similar troubles in the future.

This was the opportunity of Mr Reeves, at that time Minister of Labour in New Zealand. He saw that the path of progress lay along the line of organisation; and that the field of State Arbitration is not between man and man, but between association and association. He recognised that organised society has a right to demand of its different sections that degree of class organisation which renders possible the application of a common law. Hitherto, sectional combination had been used principally as a basis for organised war; in Mr Reeves’s plan, it was to furnish the basis of an organised peace. Following out the stages by which industrial disputes develop into strikes, he substituted for each a more peaceful step. His Bill, respecting the divisions of the colony into districts, allowed the creation in any district of a local Conciliation Board, and established a supreme Court of Arbitration. The Conciliation Boards were to come into existence “if petitioned for,” and were to be “composed of equal numbers of masters and men, with an impartial chairman.” (p. 101.) The right of electing representatives to serve on these Boards was given not to individuals but solely to such bodies of employers or of workers (men or women) as registered themselves under the Act. An association of as few as seven workers may, at the present time, claim registration. When registered, such associations are called Industrial Unions, and become corporations “with power to hold land, to sue and be sued, and to recover dues from their members.” (p. 103.)

The functions of a Conciliation Board are as follows: On receiving a request from any party to an industrial dispute, it calls before it the other parties concerned, hears, examines and awards. No strike or lock-out is permitted while the case is under hearing. The Board has full power to take evidence and to compel attendance. At first, the awards of the Conciliation Boards had no legal force but, in 1900, the amended Act made these awards “final and legally binding unless appealed against within a month.” (p. 127.)

The higher tribunal, the Court of Arbitration, consists of “a president with two assessors, one selected by associations of employers the other by federations of trade unions.” (p. 102.) The three members of the Court are appointed for three years and, unless bankruptcy, crime or insanity intervenes, cannot be removed except by a vote of both Houses of Parliament. The Court is not fettered by precedent, settles its own procedure and may take any evidence that it chooses, “whether strictly legal evidence or not.” It may hear cases publicly or privately at its discretion. Its award is given by the majority of the three members, and they may decide whether the award is to have the force of law or “merely to be in the nature of good advice.” If it is to have legal force it must be filed in the Supreme Court and after that any party to it may be prosecuted for a breach of it. The penalty payable by a single employer or trade union is limited to £500; and in case of a union’s possessing insufficient funds to meet the penalty every member is liable up to £10. The award cannot be appealed against nor quashed by any other tribunal, nor can the proceedings be carried into any other court. On the other hand, awards remain in currency only for a fixed period, which need not be longer than three years at the outside, and at the end of which the matter may be reopened.

Though only registered unions of masters and of workers can elect the officials of the Boards and of the Court, yet the jurisdiction of these tribunals extends to all employers and to all workers whether registered under the Act or not. In any district where there is a duly registered body of workers but none of employers the Governor in Council may nominate the conciliators required to make up a Board.

Such were the general features of the Act that after three years of endeavour was passed at the end of 1894 and came into force in 1895. It passed amid steady opposition from employers and with extremely little support from public opinion. In 1900, after five years’ experience of its workings, when a consolidated and amended Act was introduced, only one voice was lifted to attack its general principle. Not from its neighbours, who are intimate with the workings of it, but from this side of the ocean have come the attacks to which it has been exposed. It has been contended, again and again, by English newspapers that the measure is unduly favourable to trade unions, a contention much strengthened in appearance by the fact that in various trades awards have been made requiring employers to give preference to unionists, so long as the union can supply men qualified and ready to fill vacancies. Such awards, however, are by no means invariable; each case is tried on its merits, and the Court is largely guided by the general custom of each trade. It must be borne in mind also that the position of a New Zealand union is very different from that of a British union, and that this difference has been largely brought about by the colonial law, in the interest not of the union but of public peace and convenience. As Mr Reeves justly remarks: “In New Zealand the community, mainly for the purpose of self protection, has deprived trade unionists of the right of striking—of the sacred right of insurrection to which all workmen rightly or wrongly believe that they owe most of what lifts them above serfdom. The Arbitration Act, moreover, deliberately encourages workmen to organise. When, in obedience to the law, they renounce striking and register as industrial unions, it does not seem amiss that they should receive some special consideration. Their exertions and outlay in successfully conducting arbitration cases benefit non-unionists as well as themselves, though the non-unionists have done nothing to help them. Nor need the preference entail any hardship to their employers. Non-unionist labour is usually valued either because it is cheaper or because it is more peaceable. But under the Arbitration law non-unionists must get the same pay as unionists, and unionist strikes are abolished. It is only the non-unionists (in a trade where there is no award in force) who can strike, and who—though rarely and then only in petty groups—do. They are, therefore, to that extent, the more dangerous servants of the two. Nor, be it noted, does an employer who has only non-union men in his factory stand clear of the Act. Nor again can he take himself out of it by discharging his union hands and pleading that he has none in his employ. If an award has been made dealing with the trade in his district, he is bound by it as much as his competitors who employ union labour.”^[84]

In short, New Zealand has taken out of the hands of organised labour its principal weapon and has placed that weapon in the hand of the state. The right of waging industrial war is, now, in New Zealand denied to unions either of workers or of employers. To have enforced this denial without loss to either side and at the same time to have encouraged organisation is a feat that any British minister may reasonably desire to emulate.

It is quite certain that, without the Arbitration Act, New Zealand would not have enjoyed that immunity from labour battles which in fact it has enjoyed. The use of the Act happened to coincide, as its author points out, with a revival of trade; and a revival of trade is, as every experienced trade unionist knows, the period in which strikes may hope to be successful. “Instead, however, of striking on a rising market, as the traditional custom of trade unionism has been, the New Zealand unions were able to arbitrate upon it”—to the saving of much money, much suffering and much ill feeling.

Other objectors complain that the Arbitration Act does nothing to help the unorganised—always the most helpless—workers. Those who make this complaint have failed to appreciate the value of that important provision according to which a group of as few as seven (originally as few as five) workers in any industry are allowed to register themselves as an industrial union. Even in the poorest and most scattered of English trades it would be an easy matter to collect seven persons who, if they knew themselves protected from dismissal, would be willing to appeal for improved conditions to a Conciliation Board. So far from shutting out the unorganised, the Industrial Arbitration law opens to them a door by which they may share in all the advantages of organisation without waiting for a preliminary improvement in their conditions; and, at the same time that it holds out to them a powerful helping hand, makes them not merely passive recipients of a benefit, but active agents in their own emancipation.

Would that the same door were open to our poorest workers on this side of the ocean; that the worser paid of English factory workers could, by registering some seven of their number, present their case to a court or, with the support of the court behind them, form such an agreement as was made with their employers by the Wellington match-factory employees in November 1902, and brought into court for registration. The schedule of this agreement contains but five clauses and is a model of brevity and directness. Clause I. settles the working hours, on the basis of a 45 hours week. Clause II. fixes (in 52 words) the piece work rates of pay for five different branches of work. Clause III. deals with the question of union and non-union labour, and requires “the company” (there was but the one employing company, apparently, in the district) “when engaging a worker or workers” to “employ a member or members of the union in preference to non-members, provided there are members of the union equally qualified with non-members to perform the particular work required to be done, and ready and willing to undertake it; provided, further, that any person now employed in this industrial district in this trade, and any other person desirous of entering the trade now residing or who may hereafter reside in this industrial district, may become a member of the union upon payment of an entrance fee not exceeding 5s., and of subsequent contributions, whether payable weekly or not, not exceeding 6d. per week, upon the written application of the persons so desiring to join the union, without ballot or other election.” Clause IV. requires the executive of the union to keep an “employment book” containing the names, addresses and employers during the previous six months of members wanting to be employed; the book to be “open to the company and its servants without fee or charge during all working hours on every working day.” Clause V. runs as follows: “When members of the union and non-members are employed together, there shall be no distinction between members and non-members, and both shall work together in harmony and shall receive equal pay for equal work.”^[85]

I have thought it worth while to quote these clauses in some detail because they are typical and illustrate the safeguards both to the employer and to the non-union worker by which a preference clause is generally accompanied. The whole schedule occupies only 46 lines of print—exactly one page of the volume in which it appears.

We see, by this example, that the Arbitration Act does not exclude collective bargaining between workers and employers but allows the registration and enforcement of terms to which the representatives of both parties have agreed. Thus the field of legitimate activity is still left open to organisations both of employers and of workers: the Act merely provides for peaceable and equitable settlement in cases where the parties fail to settle matters for themselves. An instance occurs in the history of the tailoresses in which one district was governed by an agreement, and another by an award. The employers in the latter district complained that the employers in the former were allowed to compete with them on unfair terms; and the court having compared the terms of the agreement with those of the award, found that the agreement was actually in some instances the higher of the two and that, in the instances where it was lower, the wages actually paid were double those set down. This was in 1903. In 1905 the trade was once more in court asking for the establishment of a weekly wage. The court, acceding to what it declares to have been a general wish, did fix a weekly wage, but made the award for a year only, from Jan. 1906 to Jan. 1907. The schedule—rather a long one—fixes the terms of apprenticeship to each class of work, the wages of apprentices (5s. a week, rising at fixed intervals by 2s. 6d. at a time); defines, according to the length of her experience in her special department, a first-class and a second-class “improver,” a “journey woman, and an under rate worker,” and fixes minimum rates for all but the last named. Improvers in coat and vest work are to receive, for second class hands (girls just out of apprenticeship) a minimum of 17s.; first class hands (with another year’s experience) one of £1, 0s. 6d.; journey women are to be paid not less than £1, 5s. 0d.^[86] An under rate wage, for old, infirm or incompetent persons, may be fixed by the worker concerned and the trade union, by the Chairman of the Conciliation Board or by any person appointed by the Board. Such settlements of under rate wages continue for only six months, and opportunity is given to the union and to the applicant of “calling evidence and adducing arguments” before the adjudicator. In the four districts to which this award applies a tailoress, who is a “full hand” and a competent worker, can now be sure that her week’s work will not be paid at a lower rate than 25s. a week. There is no prohibition of home work; but the home worker must be paid at the established piece work rates, and an employer paying less exposes himself to fines up to the sum of £100. Thus, in district after district, and in trade after trade, a system has been established which combines the apparently contradictory virtues of uniformity and elasticity.

The scene of a sitting of the Court of Arbitration can easily be called up from newspaper descriptions. The room is plain and not large. At the upper end, between the two arbitrators, sits the judge in wig and gown. Men and masters, easily distinguishable by differences of dress, manner and speech, face each other across a table; in the body of the room reporters and a sprinkling of spectators are gathered to listen. The matter in hand is stated; then the representative of the men’s union or of the associated masters sets forth the plea of his clients, no counsel being employed except by agreement of both parties. The cost and the duration of proceedings are, no doubt, both lessened by this provision; and it is said that the unprofessional advocates on the two parts often show remarkable ability in the conduct of the case.

In Victoria a different method of fixing a minimum wage has been adopted; the method not of the Conciliation Board and Court of Arbitration but of the Wage Board. The mechanism of the Wage Boards is much more easily described and understood than that of the New Zealand Boards and Court; and it is, no doubt, partly, though not wholly, upon this account that advocates of the minimum wage are apt to propose the Victorian rather than the New Zealand model for imitation. Personally, however, considerable study of both plans has convinced me that the New Zealand method is, in practice, the less cumbrous, and that it includes features of great value that are lacking in the Victorian system.

Especially valuable seems to be the singular ease with which its machinery can be brought to bear upon the poorest workers. Were the law of New Zealand also the law of England I would myself engage to collect, within six months, from each of half a dozen underpaid women’s trades the seven workers necessary to form the required unions, and so to bring these half dozen trades within the purview of a Conciliation Board. Such Boards are established upon being asked for by a registered association of workers (or of employers), whereas the Victorian Wage Boards can only be established in any trade by a resolution of both Houses of Parliament; and, on this side of the ocean at least, Parliaments are apt to require much moving before they can be made to act.

In Melbourne, as in New Zealand, the first impulse towards the legal fixing of a minimum wage came from a newspaper. That powerful organ, the Age, for many years continued to print articles on the subject of underpayment and bad conditions of work. A Royal Commission was appointed and made a Report as early as 1884, but no practical reforms were attempted. The Age continued its crusade. In 1893 a Board of Inquiry was appointed and the evidence taken by that body showed the state of the workers in several trades to be deplorable. In 1895 an Anti-Sweating League was formed and, finally, in 1896, a new Factory and Shops Act was passed, of which the most remarkable clauses were those dealing with the establishment of Wage Boards. Provision was made for the appointment of special boards “to fix wages and piece work rates for persons employed either inside or outside factories in making clothing or wearing apparel or furniture, or in bread making or baking, or in the business of a butcher or seller of meat.”^[87]

Permission was also given by the Act for the appointment of similar boards in other trades “provided a resolution has been passed by either House^[88] declaring it is expedient to appoint such a Board.”

These Boards consist of not less than four nor more than ten members, half of whom are elected by employers and half by employees, or, failing election, are appointed by the Governor in Council.

The methods by which the members of Wage Boards are elected is extraordinarily cumbrous and could scarcely be imitated in any large industrial community. The latest regulations for such elections (dated Feb. 19, 1906) are embodied in no less than 28 clauses. In each specified trade two electoral rolls must be prepared by the factory inspectors, the one including names and addresses of all workers, the other those of all employers. In order to facilitate the compilation of this trade census, all employers are required to send to the inspectors lists of the workpeople employed by them. Candidates must be nominated by 10 employers or by 25 employees; and voting papers are printed containing the names of all the candidates.

“The Chief Inspector shall cause every voting paper to be posted at least four days prior to the date of such election to every elector whose name and address is on the roll of electors for the special board.” The elector must strike out the names of all but those candidates for whom he desires to vote and must return the paper by 4 o’clock on the day of election. Imagine such a process as this in one of our own ill paid trades! The workers in such trades are migratory in the highest degree; by the time that the addresses of all qualified electors had been collected, one third of them, at least, would have ceased to be accurate. This fact alone would lead both to omissions and to duplications. The clerical labour and postage would be so heavy as to be a serious national expense; and the magnitude of the enumeration would render its completion a work of time. I doubt whether a Board to deal with any larger British trade could possibly be elected in less than a twelvemonth; and even such expedition as this would demand the employment of an extensive special staff.

The members of the Board, when it has at last been formed may elect an outside chairman, and if they fail to do so, the Governor in Council may appoint one. The Boards may fix “either wage rates or piece work rates, or both; must also fix the hours for which the rate of wage is fixed and rate of pay for overtime.” They may also fix the proportions of apprentices and improvers to be employed; and may “determine that manufacturers may be allowed to fix piece work rates based on the minimum wage.... The Chief Inspector may, however, challenge any rate so paid, and the employer may have to justify it before the Board.” The power to grant a licence to any aged or infirm worker to work at less than the established minimum wage rests with the Chief Inspector.

The first Boards were only six in number. Several of these had much difficulty in arriving at a “Determination.” The Men’s and Boys’ Clothing Board, for instance, occupied nine months in drawing up theirs, and finally established both time and piece rates. With the idea of compensating the home worker for incidental expenses and loss of time, the piece work rates were fixed a shade higher than the time rate—with the result that employers ceased to send work out. In other instances where there has been no such difference, the compulsion to pay home workers at something near a living wage has tended in the same direction.

Though the number of Boards was steadily enlarged, the legislation allowing their formation was for some years persistently held as experimental, and not until 1904, after eight years of experience were they made a permanent part of the law of Victoria.

There were at the end of 1905—the latest date for which the Report of the Factory Inspectors is available—38 Boards the determinations of which were in force. The wages and conditions fixed by these Boards vary to a remarkable decree, and it is to be regretted that the smallest advances seem in general to have been granted in the worst paid trades. In some cases the established minimum for a competent adult worker is sadly low. For instance the female chocolate coverer of over 21 has a minimum of only 17s. weekly, while her fellow worker who is under 21 but over 18 may be paid as little as 14s. a week. The minimum for a youth of the same age is also 14s. but the adult male chocolate coverer (a person whom I have never found in England) must be paid not less than 30s.^[89] Worse still is the case of the jam trade in which the minimum for “females of 18 years and upwards” is but 14s.^[90] Such determinations as these point to a desire on the part of the Board rather to prevent a further drop of wages than to effect a rise to what may be esteemed a “living wage.” Still, even to arrest the downward course is a step in the right direction, and the example of the millinery trade, in which there is no Board, shows that the jam maker at 14s. is probably better off than she would be were there no determination at all in her trade. Miss Cuthbertson reports that in 1901 the average wage for milliners was 11s. 4d. per week per individual. “In 1902 the average fell to 11s. 1d.; in 1903 to 10s. 4d.; in 1904 to 9s. 10d.;—and possibly this year will witness a further fall.”^[91] Yet the trade steadily grows, the number of persons employed rising from 758 in 1901 to 1410 in 1904.

Dressmakers, however, who work under a determination, average 12s. 3d.^[92] The determination in this trade did not come into force until September 1904; and in 1903 the average wage of dressmakers in Victoria was 11s. 11d. These averages, of course, include apprentices and learners. The established minimum for a competent dressmaker is now 16s. per week.^[93]

This contrast serves to suggest how valuable has been the influence of the Boards in checking the fall of wages. An average weekly difference of half a crown between the wages of dressmakers and of milliners would scarcely have arisen of itself, especially in a comparatively small industrial community. Some Boards have evidently been timid; and some have shown—to put the matter mildly—no strong desire to approximate the wages of women to those of men engaged in very similar work. The difference between 17s. and 30s. in the case of chocolate coverers may serve as an instance. On the other hand, the Bootmaking Board and the Brushmaking Board have courageously enacted that women employed in certain branches shall have “the same rate as males.” Thus a woman in the bootmaking trade who is engaged in “making, finishing or clicking (but not skiving or trimming) insides or outsides or stuff cutting by hand” must receive a minimum of 40s. a week; while for women in some other branches of the same industry the minimum is fixed at 20s.^[94]

The Brushmaking determination, even bolder, runs thus: “Any females employed in any of the above classes of work to be paid at the same rates as males.” These rates vary from a minimum of 21s. a week to one of 64s.^[95]

Even the lowest of these minima would be an advance of at least 25% on the wages of most home working brushmakers in London. In Victoria the average throughout the whole trade was, in 1905, £1, 9s. 2d.^[96]

Some Boards have been less successful than others. The mingled ignorance, astuteness and bland mendacity of the Chinese furniture makers appear to have baffled the Furniture Board, as far as the Chinese department of the trade is concerned; and as the figures quoted show, the minimum fixed in some women’s trades is far too low. But, looking at the Report of the Chief Inspector—a most interesting document—it seems impossible to doubt that the Boards have, in trade after trade, both arrested the fall of wages and (not always but often) effected a rise. No doubt the determinations are sometimes evaded; so, in our own country, are the Factory Acts sometimes evaded, yet the general influence for good of the Factory Acts is no longer a matter of doubt. That neither the Industrial Arbitration Act nor the Wage Boards have by their action checked the trade of the colonies in which they exist seems to be established beyond question. The Wage Boards, without any other prohibitory effort, seem by the mere process of forbidding underpayment to have imposed a check upon the most unsatisfactory sorts of home work. As M. Aftalion has pointed out, home work, in large part, subsists solely on account of its evils. Work given out only because it might be sweated naturally ceases to be given out when sweating is stopped. On the other hand, home work of a better kind, the home work that is harmful neither to the worker nor to the community, is not checked merely by a provision that it shall be properly paid. While it is very desirable that no person shall work at home for very poor pay or under very bad conditions, it is emphatically not desirable that no person whatever shall be allowed to work at home for money. Miss Thear, one of the Victorian inspectors, reports a considerable decrease in home work in the shirt trade, the tasks formerly performed by outdoor hands “and in some cases by elderly women who are now recipients of the old age pension” are now being performed in the factories by herring-boning, button-hole and button sewing machines. “In addition to getting the old age pension and going to work inside of factories, other means of employment seem to have opened up for others who were formerly out workers. Some have boarded-out children to care for, and some are registered under the Infant Life Protection Act.”^[97]

Miss Cuthbertson, on the same page, says: “The tendency in all trades is to get the work done in factories, where the supervision is closer, and where, with improved machinery, work can be turned out much more cheaply.” The minimum wage law has, in fact, hastened the course of that development upon which most trades, and the clothing trades, perhaps, especially, had already entered.

Legislation of a similar character to that of the sister colonies has been established in New South Wales, and the kindness of friends in Sydney has supplied me with much matter published and unpublished; but, after careful consideration, I have decided not to attempt any account of the minimum wage law of New South Wales. The reasons for this abstention are twofold. In the first place the Act is but five years old, and its history, therefore, is far less instructive than that of the legislation in New Zealand and in Victoria. In the second place the accounts received point some one way and some another, so that it is difficult to draw from them any plain conclusion. I am well aware that by passing over the case of New South Wales I expose myself to the accusation of adducing only the favourable examples and of disregarding those that have not succeeded. To this it may fairly be replied that although the New South Wales law has not apparently fully succeeded, neither has it entirely failed. It is still in a stage of probation, and therefore of far less value to the student than such laws as have progressed beyond that stage. Moreover, even if it were true—as most emphatically it is not—that the Colonial experiments had all completely failed, it would by no means follow that to devise a successful minimum wage law was a task beyond the wit of man.

In fact, however, both forms of minimum wage law—the Arbitration Court and the Wage Boards—have demonstrably helped to raise wages and to diminish underpayment within their jurisdiction. The Industrial Arbitration Act, in particular, is a very remarkable piece of constructive legislation, the full scope of which will probably be more and more perceptible with the development of the land to which it belongs. Its balance, its wide applicability, the simplicity and promptitude of its working deserve to be better comprehended. The Wage Board, by comparison, lacks originality, flexibility and ease.

Both examples have great value for British students; yet it does not follow that either, in precisely its Colonial form, is altogether suited to the industrial needs of Britain. A prejudice against compulsory arbitration—a prejudice which I venture to think rests in some degree upon imperfect comprehension of the New Zealand law—is strong among British trade unionists, and the work of dispelling this would be long and arduous. On the other hand, the comparative slowness and cumbrousness of the Wage Board system and the absence of any means by which the workers can claim the help of the Board are features only too much in accord with English inertness and officialdom. It seems much to be desired that, if Wage Boards should come to be created in this country, the appointment of them should be effected in the same manner as the appointment of the New Zealand Conciliation Boards: i.e., on the request of seven or more associated workers; and it is quite imperative that some simpler and less costly method of choosing the representatives of labour and of capital, respectively, should be devised. To establish in this country a system which proved to be almost unworkable or of which the machinery moved so slowly as to be always in arrear of actual conditions would tend to promote rather than to abate the evil of sweating.

High wages and high prices not necessarily connected—Effect of increased wages in different groups of trades—Trades in which there is a margin for increase—Varying wages in the same trade—Scottish Wholesale Co-operative Society’s shirt factory—Trades in which higher wages would lead to improved methods—Displacement of workers—Cheapened production—Increased demand and increased employment—Trades in which higher wages would lead to higher prices—Foreign legislation against sweating—Effect of higher wages upon home market—Valuelessness to the country of very ill paid trades—The two lines along which trade may develop—The line of cheap labour—Consequences to the British worker—The line of good work—Summing up.

The foregoing chapters will have been written in vain if they have not succeeded in showing that there is no necessary connection between high wages and high selling prices; but that, on the contrary, high wages, in the great majority of cases, actually conduce to cheap production. Were this invariably the case, it is obvious that a general rise of wages, far from encouraging foreign competition, would rather form a barrier against it. And this, in fact, would be—as it is in some instances already—the case in many trades.

It may be well briefly to consider the various groups of cases that would arise in consequence of a general rise in the remuneration of labour. There exists, in the first place, a considerable group of trades in which, for similar work in respect of goods sold at the same price, different employers pay very different rates of wage. A very remarkable instance is furnished, in one of the worst paid trades, by the shirt factory of the Scottish Wholesale Co-operative Society. In that establishment, turning out goods for working class customers, women have for years received about double the wages of the average home working shirt maker, they not providing, as does she, the sewing cotton used. In October 1906 the average wage paid to workers in this factory was 18s. 3d. per week, and their week was one of 44 hours.^[98] Yet the factory pays and has done so for many years.^[99]

It is therefore clear that even in the ready made shirt trade it is possible to pay reasonably good wages, to compete with the “sweater,” and yet to make a profit. Thus the enforcement of a minimum weekly wage very near the level of Mr Maxwell’s 18s. 3d. would neither kill the trade nor stimulate the importation of foreign shirts. It would merely impose upon other employers that standard of management and methods which Mr Maxwell has chosen voluntarily to adopt. Those employers who lacked intelligence or flexibility to carry on a factory on these terms would, it is true, be driven out of business; but their customers would not cease to buy nor to be supplied at the old price. The only change would be that none of us would, any longer, be buying shirts at which some woman had sewn, as Hood said,

There are other groups of trades in which the history of the cotton trade would be repeated, that is to say, the employer who found himself compelled to pay higher wages would at once introduce better machinery—either in the narrow sense of actual appliances or in the wider sense of improved organisation and management. Such an employer would also, as the cotton masters have done, demand better work from his employees, and would get it. At first there might be a diminution in the number of hands employed; but if, as almost always happens, the improved methods led to a considerable reduction in the cost of production and consequently to a lowered selling price, demand would immediately increase, and more workers would again be wanted. There is no reason in the nature of things why a rise of wages and a powerful labour organisation should not do for the silk trade and the woollen trade of Britain what they have already done for the cotton trade.

In the first group of these trades, then, no workers would be displaced, and the conditions of the market would remain unaltered; in the second, there would, at first, probably be a displacement and afterwards, probably, a renewed, or even an increased demand for workers.

We come next to a group of trades which may exist, but of the existence of which I personally am somewhat sceptical. These are the trades in which there is neither margin of profit nor room for improvements that might make up for the additional outlay upon heightened wages. In these trades—if such there be—it is undeniable that if British wages rose while foreign wages remained stationary the foreigner would be extremely likely to capture the market.

But there are various matters that must be set down upon the other side of the account. To begin with, our foreign competitors are themselves uneasy about the existence of sweating within their borders. It is almost certain that German legislation directed against this evil will precede legislation in this country; while in America, as may indeed be judged by the quotations from recent American books that appear in these pages, there are many persons much concerned with the problem of underpaid labour. If our foreign competitors should keep step with ourselves in the prohibition of extreme underpayment, the balance of international trade would be in no way disturbed. Nay, if only Germany should do so, the disturbance to the English market would not be serious.

Moreover, the payment of high wages to working people has, in itself, a beneficial effect upon the home market. Some people write and speak as though money when it once passed into the hands of a wage earner passed out of existence. But in fact it almost always returns very quickly into active circulation and thus quickens the national turnover. As a general rule a workman, when his wages rise, spends his extra money upon additional comfort for himself and his family; buys more and better food, more and better clothes, more and better furniture; often he moves to a better dwelling and almost always he extends his recreations. The chances are that he will spend something in belonging to a club or a friendly society. He will not, however, as his enemies are fond of asserting, generally drink more; it is to the man who lives with his family in one room, not to the man who has a comfortable parlour, that the public-house looks so attractive. We may say without much doubt that these will be his modes of expenditure because we have among us plenty of well paid artisans, and observation teaches that these are in fact the ways in which they spend their money. Now, many of these channels of expenditure are practically not open to foreign competition. Bread for English eating must be baked in English bakehouses: milk is not yet imported: the retail shopkeeper, the bricklayer, the omnibus driver and the railway servant must follow their avocations on the hither side of the sea. The better paid worker thus, without any premeditation or patriotic design, tends, by the mere process of buying what he wants, to set his fellow countrymen working. It is quite possible that the increase of demand thus created would more than counterbalance the loss of any trade the retention of which depends upon the continuance of underpayment. Nor is this all. It is a question whether any trade in such a condition is either worth keeping or capable of being kept. An experienced employer who is at the head of a large and successful enterprise writes to me: “Broadly speaking, I am convinced that an occupation which does not admit of a decent living wage is an occupation we are better without and one which in due time will die. I mean that the requirements of the Factories and Workshops Act must kill it. A trade which can only live by means of inadequate wages and cheap squalid unhealthy buildings is doomed.” Such a trade while it still endures is not really a source of national profit. The workers whose lives it drains, not being supported by the price paid for their labour, must come eventually to be partly or wholly supported by other people. They are, in fact, a national burden, whether the charge is nominally borne by the State or by private citizens. Poverty, dirt and disease are very costly to the country in which they prevail; and they are inevitable results of underpayment.

We may seek the development of our trade along either of two lines—we may aim either at underselling our competitors or at surpassing them. If we elect to take the line of cheapness, and also determine to seek that cheapness by paying very low wages, we must confine ourselves to goods that demand neither very high skill nor very elaborate machinery. But these are precisely the sort of goods that can best be produced by nations upon a lower level than ourselves, by peasants and by dwellers in genial climates where comparatively little food and clothing and practically no heating are required. With workers such as these we can never compete on equal terms, and we should be wiser not to try. We can never bring down an Englishman to the standards of the Chinaman or of the Hindoo. But we can, in making the attempt, create among ourselves a class of helots, degraded labour slaves, living on a level that shocks our national conscience. To do this is to keep open a sore in our midst and to run a constant risk of those revolts and disturbances which are the greatest possible danger and interruption to the regular course of trade—a greater danger perhaps than that of being undersold by foreigners. For the long-suffering of the English poor, though amazing, is not probably quite unlimited. No national life can be stable while large numbers of the people live in great misery. The best safeguard of national peace is a general distribution of comfort and independence. And the safest paths towards this state of security are good education and good payment for the workers. Low wages lead by a path of intolerable suffering to an inevitable downfall. On the ascending path too there may be dangers—but they are the less dangers, and they will be faced by citizens fitter to meet them.

After all, even Great Britain cannot expect to hold all the trade of the world. What she may expect, what she can have if she will, is the commercial leadership of the world. She may show in other departments, as she has shown in cotton and in iron, that her race can produce the best workers living, and the best organisers of work; and she can continue the great lesson which others have learned from her history, but which she herself does not always remember, the lesson that, other things being equal, that nation becomes wealthiest which pays its workers best. Health, skill, intelligence: these are the true bulwarks of national prosperity; and the price of these is liberal payment for labour. Nor does the prosperity which rests upon these things injure those neighbouring nations amid which it develops. Rivalry upon the up-grade educates and improves all alike; rivalry upon the down-grade injures and degrades all, but not all alike. In that competition the nation suffers most whose standards are highest.

To sum up in a few words: in many trades, wages could be raised out of profits without change of selling price; in some a rise of wages would lead to improvements of method, to cheapening of production and probably to a fall of selling price; in some, though probably not in many, a rise of wages would necessitate a rise of prices; and of these there may be some (it is not proved that there are) the retention of which absolutely depends upon the payment of excessively low wages.^[100]

In regard to the first two groups, which together cover the greater part of the industrial field, improved payment at home would certainly give no advantage to the foreign competitor and might in some cases rather be disadvantageous to him.

In the other group, a rise of wages would probably, wherever the nature of the industry admitted of importation, lead to an increase of importation as against home production.

But in cases where the continuance of a trade actually depends upon aggravated underpayment the trade is shown, by that very fact, to be already in a declining state, and unable to support its own cost; and no trade that is in a declining state and that offers no possibility of bettered conditions can be regarded as a valuable national asset. On the other hand, of every additional shilling paid in wages, at least sixpence is spent in employing British labour, so that if, owing to a general rise of wages, we were to lose entirely the third and lesser group of industries, we should still enjoy a greater volume of trade than before wages were raised.

Thus, when we look it squarely in the face, we perceive that the bogie of foreign competition is a bogie indeed; and that British workers well paid would have less ground than British workers ill paid to fear that their trade would be taken from them.