THE LABOR QUESTION

HE branches of Economic Science connected with the relations of employers and employed are very interesting and very important, and, like the other branches of Economic Science, they hold at the present day a prominent position in the curricula of the Universities. In a country whose institutions are so democratic as the United States they are of even greater importance than elsewhere; for, upon their correct solution depends the reconciliation of opposing classes, which is so essential to the peaceful development of the nation. The continual accessions to our knowledge, combined with inventions and greater mental discipline than has been common in former eras, necessarily produce great changes both in religious belief, in social habits, and in business relations; and these changes in the circumstances surrounding mankind (or, as the phrase now goes, their environment) cause corresponding changes in the minds of men, especially in those of the rising generation who are educated amid the changed environment; and, in this way, one change reacts upon another, so that Progress, as it is called, or rather, Readjustment, becomes neces

sary.

But

Such readjustment is often painful for a time to some classes of the community, but its ultimate result is always beneficial, and when the classes who possess power are on the side of this readjustment, it is inevitable. In this country power is vested in the greater number, and readjustments looking to the improvement of the condition of the greater number are therefore inevitable. they must proceed gradually; and, indeed, they cannot proceed in any other way, because, whatever may be the desire of the few, the majority of mankind are not capable of changing their habits rapidly, and some cannot realize the necessity of making any change at all. The result is that two classes of the community exercise an influence which, in so far as it is successful, is evil-first, the class who would make changes for which the mass of mankind are not prepared, and that without fully understanding the results; and, secondly, the class who, for the purpose of

promoting their personal interests, or perhaps from lack of imagination, would endeavor to keep things in their accustomed groove-a course which, when persisted in, always leads to civil war and revolution.

America has hitherto had a very exceptional career, owing to the fact that immense resources capable of being rendered profitable with but little capital were to be found in the Western States, and afforded an outlet for those who could not obtain an outlet elsewhere; but this fortunate state of things is necessarily temporary, and this country is now approaching the condition of European countries, in which some other means must be found for the relief of unemployment and inadequate remuneration than the outlet afforded by gold mining, hunting, and trapping, followed by the cultivation of virgin soils and similar methods so long in use—in a word, it is no longer possible for those who are crowded out of employment to go to a distance, and there, without much capital and without an employer, use for themselves the resources supplied by nature. It is therefor necessary that distress be relieved in some other way, and the consideration of the means by which it may be relieved constitutes the Labor Question.

In this article I narrow myself to the Economic of the Labor Question, by which is to be understood the means by which this distress can be relieved or prevented without the necessity of bestowing charity and subjecting the unemployed or underpaid portions of the community to the humiliation of receiving it. A high spirited man revolts from the idea of having thrust upon him as a favor that which he considers himself entitled to as a right, and the problem how to secure as a right the privilege of working and a fair remuneration for that work is one which not only philanthropists but statesmen must solve, on peril of civil broils and their attendant losses.

The subject is a very large one, and I desire to survey it as a whole, in the hope that the result may lead to wiser views being taken concerning it than have sometimes been current. My object is to approach it in a philanthropic spirit, so

far conservative as to be free from sensationalism and from the crude ideas known under the comprehensive term of "faddism," yet so far liberal as not to disguise the fact that changes in the economic structure of society are necessary, and to point out what they ought to be. For, though I hold evolution must progress, I do not hold that it can progress so well or so rapidly without as with conscious guidance. I have said this much to show the importance of the subject to all citi

zens.

In what follows I propose to go systematically, but, without detail, over the subject, and I may say, in doing so, that, owing to the necessarily narrow limits of an article, I shall not be able to make express references to published works, but the reader may rest assured that these have been carefully studied, and the results, so far as consistent with correct reasoning, will be used throughout the essay.

It must also be pointedly said, that it is a mistake to suppose that the Labor Question is one which interests only manual workers and their employers; although, owing to their greater power of combining, manual workers have come more to the front in it. The causes which press so severely on them press with equal strength on the votaries of intellectual callings also. The evils from which both suffer are the unemployment of many, and the underpayment of many more. In all callings the most successful men, who are presumably the most efficient men, are well paid, and to this rule there is probably no exception. But in many callings there is a very large number who are either unable to obtain employment at all on any terms or unable to obtain a sufficient remuneration to maintain them, or at least unable to obtain a sufficient remuneration to permit the rearing of a family. The evils which flow from such a state of things must be obvious. They include every form of immorality and misery, and, besides, render the unemployed burthen either upon their relatives or upon the community, while the partially employed, and the underpaid, fall gradually into either vicious living, or illhealth and weakness, or both, and are, at length, carried off by premature death.

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In answer to this it has been said that those who fall by the wayside are inefficient, and this statement has in it an

element of truth. They are, as a rule (although the rule has exceptions owing to favoritism and personal influence of various kinds), less efficient than those who are successful. But they are not inefficient, and there are millions of men earning good livings in callings not overcrowded, who, nevertheless, if they had belonged to one of the over-crowded callings, would have been unable to earn anything. And this evilextendsequally to the intellectual as to the manual callings. It is true, that in them, the over-crowding is not caused by the introduction of machinery, but rather to the misdirected ambition of young men or of their parents, leading too many to enter into a calling in which the amount of work is necessarily limited; and it is also true that those who follow these callings very frequently possess independent means, and that their unemployment or underpayment does not often produce the same evils as among the manual workers. But the economic causes which operate in the case of the one operate in that of the other also, and, in a scientific point of view, it is impossible to separate them. The remedy of these evils is the legitimate object of the Labor movement; and, in order that it may be successful, it is necessary to ascertain accurately the causes of the evils, for, till that is done, we cannot determine accurately on the remedy.

Now the immediate cause is always over-crowding. This over-crowding produces two necessary results. It leaves many men without employment. Secondly, their anxiety to obtain employment leads them to offer to work for trifling wages, and this brings down the wages of the rest so low that it is difficult to keep alive on the amount. The preference which employers show for those who are already in employment is the only cause why wages in such callings are not always at starvation point, or as near it as is compatible with keeping the men in working condition.

Now it can be proved with all the certainty of a mathematical demonstration that there cannot be such a thing as a general over-crowding of all callings; or, in other words, there cannot be a general over-offer of labor-power. Any possible increase of population must increase the number of consumers as much as that of the producers, and, by consequence,

increase the amount of work as much as it increases the number of workers. The result is that there must necessarily be callings which are undermanned, and which, therefore, afford an opening to the unemployed, if competent to do the particular kind of work which these callings require. Some writers have denied this, but all that they have proved is that there may be a general over-crowding in all those callings in which large numbers of men are employed in the machine industries; or, as it is sometimes expressed, "all the staple industries of the country; and this is true, but there cannot be an over-crowding in all callings of every kind. Nor can there be an over-crowding in all those callings which every average man is capable of learning. Some callings require special natural talents, as, for example, that of an artist; and if it were possible that all save these could be simultaneously over-crowded, most men would be as badly off as if all callings were over-crowded. But it can be demonstrated that, in the callings which ordinary men are competent to follow, a general over-crowding is impossible.

The result therefore is, that if the unemployed could discover what callings are undermanned, and could enter them, unemployment could not exist except in a few rare and special cases, and, with the abolition of unemployment, the competition of the unemployed would be removed, and any approach to starvation wages would become impossible.

The great object, therefore, must be, to discover a means whereby the questions may be solved;-first, what callings there are which from time to time are undermanned, and, secondly, how can the unemployed be instructed in them. It is a mistake, although a very common one among those who have never had any experience in the matter, to suppose that an unemployed man can obtain employment in another calling than that to which he properly belongs. In order to obtain employment in any calling a man must first learn the particular kind of work which it requires. It is true that unskilled labor forms to some extent an exception to this rule. But as it is possible that there may be overcrowding in some callings, so it is possible that there may be overcrowding in all forms of unskilled labor, and this is

actually the fact. The number of persons who, having been thrown out of employment in skilled labor, have been compelled to resort to unskilled labor, is so great, that the various forms of unskilled labor have become over-crowded callings. It is also true that those who employ skilled labor, and who find the supply of the class of labor they require insufficient to meet their demand, may, if they think fit, employ one who is not skilled and teach him the business; but this is rarely done at all, and, when done, is done for the rising generation only; and any payment for instruction would be beyond the reach of the unemployed classes. And this preference for the rising generation extends also to many unskilled callings.

What then is the remedy? I think the only possible remedy is the intervention of the State. The intervention of the State is a bugbear to many. And there is no doubt that the State as at present constituted is liable to the imputation of partiality-from political motives. Nevertheless, the State already does many things. It collects statistics, and there is no reason why it should not add to other statistics the inquiry what callings are overcrowded and what are undermanned. The State is already a large employer of labor, and undertakes to give instruction to those about to enter the military and naval services; and there is no reason why the State should not be able, without any possibility of favoritism, to provide instruction for all who, being without employment, or earning less than a specified wage, should desire to enter one of those callings which had been found to be undermanned. The State might insist that due diligence be shown, and after a time, in the event of the man being found incapable of learning the calling which he had selected, he might be drafted to another. Subject to this restriction, the opportunity should be open to all; and, if open to all, there would be no possibility of jobbery.

While the men were learning these callings it would be necessary that they should be maintained at the State's expense. This seems at first sight as if public burthens were to be increased. The truth is the other way. Unemployed men are now maintained by charity. Some of them are maintained in jails, and some in almshouses, some by the charitable and

some by their relatives. But all are maintained by some one else, and the public is deprived of the services which they might render in return. If the State were to provide them with the means of learning new callings, and to maintain them while doing so, the result would be, that the burthen of their maintenance would be shifted from a section of the public to the whole public, and that instead of being a permanent burthen, they would be a temporary one. There would not be even a temporary loss except the cost of instruction, and there would be a great ultimate gain. Nay, the public actually do, in some instances, discharge this office for convicts in prison, and it is certainly hard that men should be required to qualify by crime for advantages so reasonable and necessary.

It must be admitted, however, that, though the public as a whole would be a gainer by this arrangement, a section of the public would be a loser. Those who employ labor would, when the competition of the unemployed had been taken away, be obliged to pay higher rates than are now current in over-crowded callings. And here is the difficulty, for it is quite possible that self-interest may lead this section of the community to oppose such reforms. But this is just the point where timely concessions are to be reasonably asked for. And it must be remembered that, in proportion as the unemployed are employed, so will the demand for wares of all those kinds which they can afford to use increase. Some economists are of opinion that the greater part of the wares produced are consumed by the working-classes. If this be so, any course which would preserve them from unemployment might be expected to repay to the employers by increase in sales more than it would take away by increase in wages.

But there is also such a thing as a temporary depression in business, by which men are thrown out of employment and are afterwards taken on again. These temporary spasms of unemployment are quite different from those which are caused by the introduction of machinery and similar causes, by which men are thrown out of employment permanently. A temporary depression may be caused by unsuccessful speculation on the part of some large banking or other firm,

whose bankruptcy may lead to that of other firms, and in this way disable many employers from carrying on business. In such cases it must frequently happen that the goodwill of the enterprises cannot be sold, and then it must stop, and the employees be discharged. Such catastrophes form one of the causes of unemployment, which cannot be guarded against and afford an exception to the rule that employment can be rendered constant. They show that it is essential (if charitable relief is to be avoided) that some other means besides constancy of employment should be discovered whereby wages may be rendered adequate.

Another cause of temporary depressions is over-production or under-consumption, which terms, though they properly have different significations, have been generally used interchangeably. Their causes and effects are, however, the same; and we may use the old word "over-production" to denote both. About the causes of over-production much has been written, and different theories have been suggested; but the only one which commends itself to my judgment is that of David A. Wells, in his work on "Recent Economic Changes," p. 80. He, however, starts with supposing the case of an unexplained depression. That, once assumed, population, and with it the power of consumption, goes on increasing, notwithstanding the diminution of production which has resulted from the depression. Consequently demand exceeds supply-consequently prices rise-consequently manufacturers increase their output-factories are started, and each employer does his utmost to secure to himself as large a share of the increasing demand as possible; knowing, indeed, that the result must be over-production, and that some must consequently fail; but hoping, in his inevitable ignorance of the resources of his rivals, that they will fail before he does, and that he will be the man fortunate enough to get his stock ultimately sold at a satisfactory price.

This risky method of production would not be followed under a system of handlabor; but, in machine industries, the expenses of keeping mills and other industries idle are sometimes greater than the expenses of keeping them running, because fixed charges, such as rent,

interest, etc., have to be met whether the mill is idle or not, in addition to which, it would seem that machinery deteriorates more rapidly when idle than when in use, and these considerations almost force each manufacturer to hold on, even when running at a loss, until his capital and credit are absolutely exhausted. This system produces vast over-production and a great fall in prices, as well as the bankruptcy of many manufacturers and the dismissal of their work-people, with the result that the supply falls once more below demand, depression again sets in, and the same course is run over again.

The flaw in this theory is that it fails to account for the original depression from which the first over-production is supposed to start. But we are left to infer that at first production continued its even course, while population and even demand, was increasing, and this increase caused at first a small under-production which was followed by an attempt to overtake the demand, creating a small over-production, resulting in a few bankruptcies, and followed by a greater under-production, the alternates between under-production and over-production increasing in intensity as time goes on, until at length they reach the height with which we are familiar in modern times.

But, from whatever cause arising, it does not appear that, in prosperous times, wages should be sufficiently high to admit of wage-earners saving sums sufficient to tide them over the difficulty, and this brings us to the wages question one of the most vexed in Economics, but one which the student will not find so difficult if he can prevent his intellectual powers from being warped by any sympathy which he may entertain for one or the other of the parties whose interests, though identical up to a certain point, are yet divergent when that point has been passed — namely the employers and employed.

As we have seen that it is not possible, generally speaking, for workers to change from one calling to another; so, the whole body of those engaged in any one calling, or even in any one department of a calling, must be taken as a group by themselves. And even the workers in any given country may to some extent be considered as forming a distinct group from those in another country, for it requires a con

siderable difference in wages to bring the workers in any one country to another. Now, taking one of these groups, there is a maximum beyond which wages in that group cannot rise, and a minimum below which they cannot permanently fall. There is no minimum below which they cannot fall temporarily, and wages have often fallen to starvation point, but wages cannot very long continue below the point which is necessary to supply the worker with those necessaries which are essential to keep him in working condition; and this, on a broad view of the question, may be considered the minimum. The maximum, when the object of paying the wages is to secure gain, not personal pleasure for the employer, is the amount remaining after other charges incident to the carrying on a business have been deducted from the sum which the employer calculates upon receiving as the price of the product-reckoning, however, among those charges, some profit to the employer himself-such an amount of profit as may, under the circumstances of the case, be sufficient to prevent him from abandoning the enterprise.

The amount of profit requisite for that purpose varies with the circumstances of the case. If the employer is his own manager and is not acquainted with any form of business but the one, he will submit to a heavy deduction from his expected profit rather than abandon the enterprise; while, if he has a hired manager, and is in a position to turn his money to other account, he will require a rate of profit as high as he can obtain in any other way. The question whether he has locked up his money in buildings and plant which cannot be readily disposed of without a sacrifice is also a most material factor in determining how far he will allow his profits to be cut down. And the question whether a large profit is expected in later years is also important; and frequently leads an employer to dispense with all profit, and even submit to an absolute loss, for a time.