Domestic service, as has been seen, is accompanied by certain social conditions that prevent many from entering the occupation. The present unclassified state of household employments operates in the same way. But in addition to this lack of organization, other industrial disadvantages are found. These are the lack of all opportunity for promotion within the service, the lack of kindred occupations opening out from it, the irregularity of working hours, and confinement evenings and Sundays, the necessary competition between those of American birth and foreign born and colored employees, and the lack of personal independence. These, in addition to the unorganized condition of the work, are the industrial disadvantages that tell most strongly against the occupation; they are the economic maladies that can be alleviated only by the application of economic remedies.

The attempt has been made to show how the lack of organization in household employments can be partially met by taking out of the house a large part of the work now performed there, and having much of what must necessarily remain done by the piece, hour, day, or season, thus securing better specialization of work and directing it into the current of industrial progress. The second group of industrial difficulties enumerated must in a similar way be met by measures that have proved successful in similar fields.

The vexed questions of wages and hours of labor in the industrial world are still unsettled, but in certain industries some little progress towards a solution of those difficulties has been made through the introduction of the profit-sharing system. In order to answer the question whether profit sharing could be introduced with advantage into domestic service, it is necessary to consider somewhat in detail the question, What is profit sharing, and also the question, What have been its advantages in general economic society?

Profit sharing, as defined by Mr. Carroll D. Wright, is the term that “may be applied to any arrangement whereby labor is rewarded in addition to its wages, or in lieu of wages, by participation in the profits of the business in which it is employed. Benefits of various kinds—as insurance, schools, libraries, and beautiful surroundings, so far as maintained by employers out of their profits and enjoyed by employees as an addition to what their wages would purchase—would have to be regarded, in a strict analysis, as an indirect form of profit sharing.”[311] Mr. Nicholas Payne Gilman defines it as “the method of rewarding labor by assigning it a share in the realized profits of business in addition to wages.”[312] Mr. D. F. Schloss considers it “an arrangement under which an employer agrees with his employees that they shall receive, in partial remuneration of their labor, and in addition to their ordinary wages, a share, fixed beforehand, in the profits of his business.”[313] The International Congress on Profit Sharing, held in Paris, in 1889, declared it to be “a voluntary agreement, by virtue of which an employee receives a share, fixed beforehand, in the profits of an undertaking.”

The history of profit sharing is short, and can easily be recalled. It began in 1842 with the Maison Leclaire in Paris, and has been subsequently introduced into many business houses in France and Switzerland, countries where the economic conditions lend themselves readily to its progress. Its adoption in Germany has been less extensive, while the English industrial system has hitherto seemed hostile to it, although Mr. D. F. Schloss in his recent Report claims that a larger number of experiments in profit sharing have been made in England than in any other country. Probably about one fourth of the business establishments conducted on this principle are found in the United States.

What are the advantages that have resulted from this fifty years of more or less extensive experience with the system? There is first the fact that it results in the development of what Mr. Carroll D. Wright has called “the group of industrial virtues.” This group includes diligence, zeal, caretaking, vigilance, punctuality, fidelity, continuity of effort, willingness to learn, a spirit of co-operation, and a personal interest in all business affairs. In addition to these virtues, other positive advantages have been noted by those who have tried the system. “An appreciable percentage of the occasions of worry, which all large employers experience, have disappeared,” writes Mr. T. W. Bushill, of Coventry, England.[314] M. Billon, of Geneva, states as one result of his experiment, “Superintendence became easy for us, and from that time we could, without fear of offending any one, show ourselves exacting in details to which previously we were obliged to close our eyes.”[315] The Peace Dale Manufacturing Company began profit sharing “not to make money in the positive sense, but to save waste.”[316] This saving of waste is seen in the efforts to economize time and materials and in the additional care with which machinery and all appliances for work are used. Various English firms have been most successful in attaining this end, stating that they find “increasing care to avoid spoilt work and waste both of time and material”; that “waste is guarded against”; that there is care in handling materials, and that “especially waste of raw material is avoided.”[317] Another gain is found in the identification of the interests of employer and employees and the consequent harmony between capital and labor; “the occurrence of a strike in a profit-sharing establishment is believed to have been a rare event,” says Mr. Schloss.[318] The advantage to the employer of this identification of interest is seen in the ability to obtain “a steadier and superior class of workers”; in the fact that “the knowledge that there is such a scheme brings all the best workmen” to the firm employing it; that “workers remain year after year”; and that “it tends to secure and retain the best workers.” Its good effects on the character of the work are seen when “an efficient man is very soon pricked up to greater diligence by his fellow workers”; in securing through it “the maximum of effort”; “in a steady pulling up all around”; when it “makes the men keener after business and sharper in keeping down expenses.”[319]

It would seem difficult to introduce the scheme into a business like that of tea-blending, but a London firm that has practised it thirteen years states that the effect is “to make the clerks willing to exert themselves in an especial manner, when the occasion arises, because they know that if they show themselves unable to cope with the mass of work to be done, then the staff must be increased; and they do not care to see their bonus diminished by an augmentation of the numbers entitled to participation.”[320]

The question naturally arises as to how far these gains reimburse the employer for the financial cost of profit sharing. The chairman of the South Metropolitan Gas Company of London writes, “I state unhesitatingly that the Company is recouped the whole of the amounts—some £40,000—paid as a bonus since the system was started.”[321] The managing director of the New Welsh Slate Quarry Company gives it as his personal belief “that we are recouping every penny of bonus and more;” and similar testimony comes from others.

Yet this is putting the matter on the lowest plane. The system “converts the industrial association of employer and employees into a moral organism, in which all the various talents, services, and desires of the component individuals are fused into a community of purpose and endeavor.”[322] A natural result, moreover, is a general elevation in the standards of morals. Most of all, in an individual way it is of help to the employee; “to assist a person in improving his condition by his own efforts is to make a man of him.”[323]

What can be learned from these successful experiences in profit sharing that will be of value in domestic service? The usual difficulties that beset the employer of domestic labor are lack of interest, desire for change, negligence, waste of time, extravagance in the use of materials, in a word, the absence of the industrial virtues. If these very difficulties—all of which exist elsewhere—are partially or entirely obviated by the employer of other forms of labor through the system of profit sharing, may it not reasonably be expected that they could be met in domestic service by the employment of similar means?

Domestic service, it is true, is not a wealth-producing occupation, but it is wealth-consuming probably beyond any other employment. The profit, therefore, must be negative, that is, economy in the use of time, materials, and appliances for work. It is in precisely these ways that profit sharing has been most successful, and the wage system most unsatisfactory. Under the wage system the employer of domestic labor pays for time rather than for quality of service, and employers therefore constantly complain that employees do not accomplish one half as much as they should, and employees that employers exact twice as much as can be done. Neither party to the contract under the wage system can have a true notion of the working value or the money value of time; thus it is not strange that the one requires more than can be performed, and the other does less than might be reasonably demanded. The same ignorance and carelessness prevails in the use of materials. The employer may provide the best the markets afford, but if the cook has never had brought home to her a realizing sense of the money value of these materials, she is not altogether to blame if she fries doughnuts in butter costing fifty cents a pound, and makes angel food daily when eggs are forty cents a dozen. The employer may also provide the finest of furnishings for the dining-room and china closet, but if the maid-of-all-work does not associate a money value with these furnishings, she uses table napkins for holders, and carelessly drops fine china into an iron sink. From the selfish point of view the chief interest of the employer is to keep the bills down and to get the greatest possible amount of service even at the cost of the greatest expenditure of human strength; among employees, it is to do sufficient work to retain a good place, and to use whatever materials are most convenient.

Mr. Nicholas Payne Gilman has well said, “The deficiency in the daily wage system as a motive power to procure the desirable maximum of effort and performance is extreme.” Precisely the same objections that hold in all other employments to the wage system hold as well in domestic service. In other occupations it has been seen that the almost universal testimony of those who have tried profit sharing is that the system results in economy in the use of materials, care in the handling of machinery and implements of work, and a feeling of partnership, the spur of which as a motive “is only excelled in sharpness by complete proprietorship.” Mr. Gilman sums up the advantages of the system when he says, “Profit sharing advances the prosperity of an establishment by increasing the quantity of the product, by improving the quality, by promoting care of implements and economy of materials, and by diminishing labor difficulties and the cost of superintendence.” In a word, whatever arguments can be advanced in favor of profit sharing in productive industries can be used with equal force in its favor in domestic service.

The application of the principle to the household is simple. It is possible to allow a fixed sum, as $50, $100, or $500 per month for living expenses, which shall include the purchase of all food for the table, fuel, lights, ice, breakages, and the replacement of worn-out kitchen utensils, and to allow a pro rata amount for guests during the month. If by care in the use of food materials, fuel, and kitchen and dining-room furniture, the expenses amount to $45, $90, or $450 per month, the $5, $10, or $50 saved can be divided according to a ratio previously agreed upon between the employer and the one or more employees. The cook is in the position to save the most, and therefore ought to receive the greatest percentage of the amount saved; but it is a part of the work of the waitress to be careful of glass and china, of the laundress not to waste fuel, soap, and starch, and of all, including parlor maid, seamstress, and nursery maid, not to waste gas, fuel, or food at the table, and therefore each employee is entitled to a share in the profits. Thus each keeps watch over the others to prevent undue waste, and the employees are given a personal interest in the establishment now so often lacking. In addition to this, it is possible to allow a gardener and a coachman who have taken special care in the improvement of lawns, gardens, and stables a small percentage on the annual appreciation of property. “Comprehension is wonderfully quickened by the payment of a bonus or two in cash, and there is no more efficient instructor than self-interest.”

Moreover, it is possible to allow a fixed sum for service, as $18 per month, out of which the employee may choose to have a small sum spent in hiring by the day some one to wash windows and clean verandas, or she may choose to economize her time and strength and do this work herself. In either case the financial outcome to the employer is the same, while either arrangement makes the employee a partner in the domestic company and gives her an active interest in its welfare.

It is possible to apply the principle in still other ways. If the general servant likes to cook but dislikes other parts of housework, she may contribute to the Woman’s Exchange and with part of the money received hire with her employer an assistant to come in a certain number of hours each day to care for the rooms, the silver and brass, and wait on the table. It is possible also to give the cook a certain amount of time for making articles to be sold at the Woman’s Exchange, the employer furnishing capital and implements of work and receiving a certain share in the profits. In employment bureaus it would be possible to give a certain percentage of the profits of the bureau to all employees who have kept their names on the books of the bureau and remained at least one year in the place found by them through its agency.

The ways indeed are numberless in which the principle of profit sharing can be applied; and if the ingenuity and fertility of resource possessed by so many employers were once turned in this direction, the good resulting would be incalculable.

Great as would be the gain for domestic service if this principle could be adopted in private families, the advantage would be if possible even greater could it be introduced into hotels, boarding houses, and restaurants, and also the dining-car, parlor-car, and sleeping-car service. In all hotels, restaurants, and public institutions the waste is enormous—perhaps proportionately greater than in private families, largely because as a rule the superintendents of such establishments are also employees on wages. Ignorance is often the chief cause of waste, and the best corrective of this ignorance is the experience gained through profit sharing.

But the greatest advantage of profit sharing in restaurants and hotels, dining-cars and sleeping-cars, is that through it the feeing system could be abolished. In all such business enterprises where the feeing system is established there is in effect a combination of the general public and the employees of the establishments against the proprietors of them. Such is the case because the feeing system prevents the proprietors from receiving a fair amount of patronage unless each employee is feed for performing the service he ought freely to give and for which he will presumably be paid by his employer. The money profit in all these establishments depends largely on the good service rendered by the employees, and thus it would be possible to divide a positive profit as well as a negative saving. The feeing system, if it prevails in any branch of personal service, drags down with it in the social and industrial scale every other branch of the service. The substitution of profit sharing in hotels and restaurants and in the dining-car and sleeping-car service for the system of fees so increasingly prevalent would do more than any other one thing to remove the social stigma from domestic service and make of all such employees self-respecting men and women.

It may be urged against the proposition to introduce profit sharing into domestic service that few employees are of such stability of character as to warrant making the experiment. But the great desideratum is to introduce into the service some principle that will develop the best qualities of those already in it, that will sift out the worthless and compel them to undertake unskilled labor, that will draw from other occupations, where they are less needed, able persons whose natural tastes and abilities would attract them to this. M. Levasseur is quoted as saying that of one hundred firms that begin business, ten per cent succeed, fifty per cent “vegetate,” and forty per cent go into bankruptcy. The statement characterizes with possibly sufficient accuracy the result in the case of the establishment of a corresponding number of households. Could an industrial partnership be formed between employer and employee, with the agreement to divide, not positive profits, but negative savings, something might be done to save the forty per cent who now give up housekeeping and go into the bankruptcy of hotels and boarding houses, and also to lessen the fifty per cent who “vegetate” through the employment in the household of obsolete industrial methods.

It may also be said that profit sharing appeals to a selfish motive and therefore is objectionable. But much of the waste and extravagance in the household comes from ignorance; profit sharing is one way of teaching the value of raw materials. The comfortable theory is often entertained that to be born poor is to be born with a knowledge of all household affairs. As a matter of fact, there is doubtless far more waste and extravagance in the households of the poor than in those of the rich. But extravagance is in reality a relative term; “tenderloin steak for breakfast and rump roast for dinner,” which may be simple fare in the household of the employer, becomes an impossible luxury to the employee in such a family when she goes to a home of her own. Profit sharing would be of value in the household not because it would appeal to a selfish motive, but because it would teach the value of materials used and incidentally do something to prevent this prevalent waste and extravagance.

Neither of these objections to profit sharing holds in the face of all that can be said in its favor. The general arguments for it are many. It is usually assumed that the interests of the employer and those of the employee are antagonistic. The introduction of profit sharing could easily prove that this assumption in domestic service is wrong, as it has already made similar proof in other occupations. If the employers of other forms of labor find themselves relieved of much of the worry and friction that have previously resulted from the mutual relation of employer and employee, it would seem reasonable to expect a like result in the household. If it has been found elsewhere that the extra services called out, and the manner in which they are called out, constitute an invaluable educational discipline, and promote zeal, efficiency, and economy, a similar result might be looked for here. If other employees have learned through it to be careful of their methods of work, punctual in the performance of their duties, and economical in the use of materials; if it has become “a moral educator, and substituted harmony and mutual good-will for distrust and contention in the relations of employer and employee,” then, indeed, may it not be considered, not as a panacea, but as one measure among many that may be of help in lessening some of the serious difficulties that now attend domestic service?

At the present time a public discussion of domestic service meets with little else but jest and ridicule, while in private life the social stigma is cast on all engaged in it, as is the case in no other occupation. To attempt to dignify labor by saying, “we must dignify labor,” savors of the old problem of trying to raise one’s self by the boot-straps. No concrete method by which this is to be done is ever suggested, and until some plan is adopted by which the personal dignity and independence of the employee is recognized, and his industrial and financial independence is secured, domestic service will continue to be under the industrial and social ban. When this improved condition is brought about, there will be established what Professor Jevons considers the best of all trade-unions—that between the employer and employee.

It must be frankly said that the plan of adopting profit sharing in the household is a theoretical one; and to say it is “mere theory” is often considered an unanswerable argument with which to meet every new proposition. But theory lies at the basis of all successful action; difficulties have come in household service often because it has been conducted without theory—in a short-sighted, haphazard, hand-to-mouth fashion. It is known, however, that the experiment has been tried successfully in a private family, and this perhaps saves the proposition from the charge of being only theory. It has been tried by Mrs. X, a university graduate, after one and a half years’ experience in housekeeping. The experiment was made in a college town where the cost of provisions was rather above than below the average. The family comprised four adults, including the Irish maid rather above the average in intelligence and ambition. The plan provided for an allowance of $40 a month for living expenses, including groceries, meats, fish, poultry, butter, milk, cream, ice, candles, kerosene oil, and incidental expenses. The last included breakage and the replacement of worn-out kitchen utensils. The best materials of all kinds were purchased, and practically nothing was ever thrown away. The food was simple but abundant. The co-operation between employer and maid consisted on the part of the employer in planning the menu, especially the making up of left-over materials, the pricing of all articles in the market, and keeping the accounts accurately; the maid gave all orders and carried them out. The profit sharing consisted in dividing equally between employer and maid whatever had been saved at the end of the month out of the $40 allowed for running expenses. The results of four months’ experiment were as follows:

The plan for carrying on the dining association using the Memorial Hall of Harvard University is essentially one of co-operation, and contains some points that could be tried with advantage elsewhere. The steward receives a fixed salary and in addition a small sum each week for every person who boarded that week at the hall; but this “head money” is proportionately diminished as the average weekly price of board exceeds the amount agreed upon.

At Placid Club, a social club established in the Adirondacks, all fees are prohibited, and the rule is strictly enforced; but the past season (1896) a dividend of ten per cent on the wages received was declared out of the profits of the club, and this was given to all house employees who had remained throughout the season and whose services had been satisfactory to the manager. The financial success of the club depended largely on the efficiency, good-will, and ready co-operation of its employees, and the dividend declared was in recognition of this fact.

Beginnings in a small way have been made elsewhere.[326] They are indeed but beginnings, but they seem to indicate one direction in which progress is possible.