WAGES.

Manawatu Herald, Volume XLII, Issue 2182, 28 September 1920, Page 1

WAGES.

Mr Ayrton, at Thursday's meeting of the W.E.A., commenced a series of lectures on “The Distribution of National Income.” He showed how in production there was an evolution from simplicity to complexity, from slavery, through serfdom and domestic labour to free labour, from small to large scab; production. Exchange follows the same evolution —barter, recognised commodities as payment, metal coinage, the goldsmiths, private banks, and finally the joint stock bank. In the same way in distribution the pedlar is the forerunner of the merchant induce and universal provider.

The national income is distributed by means of four factors —rent, interest, profit, and wages. "Wages may be defined as reward for exertion, or income received in return for labour, or the price of labour. The worker is a seller of labour, and the employer is (ho buyer. In the patriarcbial period the majority of workers wore slaves. A later development was the guild system of the middle ages, under which the master went: through the stages of apprenticeship and journeyman before becoming an employer. Later came the domestic system, where people did their work in their homes. Then followed the workshop system, and finally the modern factory or industrial economy, in which the introduction of machinery creates a distinct, industrial class separated from the land. This system Jed workmen to escape from (he guild regulations and become free labourers, but the change was more profitable lo (he buyers than the sellers of labour, because under the old conditions of slavery and serfdom the purchaser of labour was interested in keeping it lit and efficient. The improvements effected in relation to labour have been effected partly by legislation and partly by organisation. The chief credit is due to a master tailor named Francis i’lace, who secured the abolition of the laws making it a criminal offence for labourers to meet and dismiss wages and conditions of employment. Immense service--were also rendered by the seventh Earl a!' Shaftesbury, Adam Smith, ami .1. S. Mill.

Nominal wages means (he amount of money paid as such; real wages iinnnfc liic extent of their purchasing power. The amount of wages has some relation to the productivity, and is calculated according lo piece work or lime. Wages at lirst; were fixed by indidivnal bargaining. This has now given place to collective bargaining between associations of employers and trades uni-

According In llio wages Fund theory the payment is determined by I he supply of workers on (he one liiind and Hie amount of.' capital seeking iuvesliuenl on (he oilier. A lixed sum is available For wages, and the more seekers (here are For if. (he less eaeh will get. From (his theory arose (he doclrine of MalLhns, dial population (ends fo increase i'asler (ban (he means of support. The leaehers oF these (henries overlooked the Fad dial the eapilal seeking For labour is produced by labour, and increases accordingly, and that: when the labour is performed there is more For distribution than there was before. Hence increase of the number of workers means increased sources of production and maintenance. Another theory was known as the iron law of wages, according to which the amount of wages is determined by the cost of producing and maintaining workmen, and wages accordingly tend to a minimum which is regulated by the subsistence level. Hence wages are higher where the standard of living is higher. For this reason they are higher in America than in England, and higher in England than on the Continent. A problem accordingly arises as to whether an increased standard of living rails forth an increased wage, or whether the latter produces the improved standard of living. The third wage theory is that of productivity. The value of labour varies, and the wages are higher for the more skilled or more efficient workers. Labour is not only a c ommodity to he bought, hut is also an instrument in the production of wealth. Land is valued according to its productivity. So is labour. But if wages are to be paid according to what the labour produces there is a danger of its leading to a, speeding up process. The theory cannot be applied, all round. For instance, to a clergyman or doctor. Production has been wonderfully . increased during the last 200 years, hut it is questionable whether wages have advanced in the same proportion. Wages are produced by labour, capital by the union of labour and land. Wealth or capital is consumable (food, clothing, etc.), or tm-

consumable and fixed (machinery). You can separate land or capital from the person, hu( not labour. It is pal'l of the individual. Labour is personal and human, capital is a tiling. The worker cannot withhold his labour, except certain groups of persons such as miners, a.ud then only for the time being. Workers as a whole cannot, but the cap-’ lain of industry can withhold his product and wait for a suitable market. Economic pressure compels the worker to sell his labour — he cannot put it into cold storage until a suitable occasion when he can unload it on the market. He cannot easily organise a scarcity, though attempts have been made to do so, as by restricting the entrance to a trade or calling by requiring a high or cosily degree of skill or efficiency. But the fact remains that labourers are many and buyers are few. The supply as a rule is greater than the demand. The lecturer concluded with a plea for the recognition of the common humanity running through the different strata of society, and the subordination of the means of production and distribution to the individual. At subsequent lectures the other fa,ctors in distribution —rent, interest and prdit —will be discussed.