Wages and Rationalization
IATHEN we write this, the decisions on a number of important questions affecting wages are being taken. The Conference of the National Union of Railway- men to consider the findings of the National Board takes place on Thursday ; on the same day the National Joint Industrial Council for the Building Industry meets to discuss the -new draft national agreement ; the Mining , Industry is divided on the question of the spreadover ; in Lancashire the eight-loom dispute seems to be again within sight of causing trouble ; there is talk of reduction in the Potteries, in Agriculture and even in the Civil - Service. It would thus seem that there is, if not what some Labour politicians have described as an ". organised attack" on wages, at least a fairly general feeling among employers, in whose demands for reductions most of these questions originate, that now if ever public opinion will support them in asking for sacrifices from labour.
Their strongest argument, of course, is that industry cannot afford the present wages. You cannot, they say, get more out of an industry than there is in it. If you try to, what there is will disappear, since the industry will be put out of business. Moreover, the cost of living has fallen recently so much (from 60 per cent. above 1914 at the end of February, 1930, to 50 per cent, above at the same time this year) that even if wages are eut by, say, 11 per cent. all round, labour will still be getting more than a year ago. . .
These arguments appear to us, as they stand, to be flawless, and there is much justice in their application to some industries, in which the present depression is the result of a world crisis largely due to monetary causes upon which we shall not enlarge here. There is some justice, too,"in the statement that the sheltered industries, such as transport, have profited at the expense of those which have to compete in international markets, and that wages in them are unduly high in relation to the standard of living in the country at large and in the world. The arguments of those who say that high wages mean more purchasing power, . and are therefore good for industry in the long run, are sound only if applied to the whole of the world's wages. If consistently applied by any one country they would lead only to inflation and bank- ruptcy, and still more if they were applied by any one industry. They- cannot even be considered- by this country while we continue -to compete for world trade ; and it is possible that the- same reason would justify reductions -of the present wages in many industries, even it these -indus- tries were working as efficiently as is possible for them.
- Here, however, we come upon an argument which is very damaging to the .employers' case. If- labour is to be asked to make sacrifices, it should be made quite clear that every other • means of reducing costs has first been tried or is to be tried. Unfortunately, in many of our industries, and notably in some of those in which disputes are now in progress or pending, it is quite clear that they are not working anything like as efficiently as they might. The case of cotton is notorious ; indeed, it has been asserted that even if in Lancashire wages were cut to the level of Japan, the latter, with her superior organisation, could still undersell Lancashire. Nobody, not even their own managements, is satisfied that our railways could not be made more efficient. It can still be said by a member of the mining industry that his industry treats the scientist "rather as a sort of dirty bottle washer." It may • be necessary in these industries to reduce the burden of wages in order to provide a" breathing space " for reform, but labour would very naturally like to see some evidence first that obviously necessary reforms arc likely to be carried out. In asking for wage reductions-without giving any such evidence the employers are immensely strengthen- ing the hands of those whose object is to take the control of industry from them—whether through Socialism or through some form of co-operation or profit-sharing.
In one instance, however, the trade unions have thrown away their case in this respect. By making a stand against the eight-loom system, even with higher wages, the weavers' unions in Burnley have lost a great deal of sympathy in the country, and presented the employers with a first-rate case against them. It is easy to under- .. stand why they have done so. If the new system is to be introduced a great many of their members will lose even the partial employment which they now have, and will lose it almost at once. What they have perhaps not reckoned is that if it, or some other device, is not intro- duced, a great deal of Lancashire will lose its employment permanently, though this may take a little longer to conic about.
Since Mr. Thomas exchanged the office of Lord Privy Seal for his present one we. have heard much less of the admirable policy which he helped to institute of forwarding what is known as rationalization by every means in the power of the Government. That policy seemed to us at the time to be the most hopeful element in the economic situation of this country. We hope that when the Miners' Federation present their appeal to the Government to pass a new Minimum Wage Act, the Government will have the courage to make their reply in the form of a reaffirma- tion of this policy, and that they will follow this up by new efforts to make it effective. The only way to make Great Britain prosperous, and thus able to pay high wages all round, is to put her industries into a paying condition. Minimum Wage Acts will not do it, and neither will reductions of wages, unless . they are accompanied by reforms which will bring Great Britain abreast of modern practice. If we could achieve that, both Acts and reductions might be desired no longer.
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