AMERICAN LABOUR POLICY

Manawatu Herald, Volume XLVIII, Issue 2991, 28 January 1926, Page 3

AMERICAN LABOUR POLICY

WAGES BASED ON PRODUCTION.

The American Federation of Labour at its recent annual convention had an interestig debate over wages and production, which resulted in a declaration that has been called a new labour policy. The language of the entire resolution hardly seems to justify the claim that any new idea or policy has had sudden birth, but an attempt within the Federation to formulate a wage policy based primarily upon production undoubtedly is of real importance. The original resolution upon the subject in the report of the committee on resolutions was no more than a general declaration condemning all wage reductions as producing social and industrial unrest raising instead of lowering production costs.

John P. Frey, head of the International Moulders’" Union, declared the “the time had come when the position of the trades union movement on the question of wages must be more clearly defined.” “We cannot base our wage demands,” he said “upon any individual or group conception of the cost of living. What may be a living wage for one man, may not be for another. Wages should be based upon the value of what we are creating. Methods of production are continually being perfected, including utilisation of water power, ond this should be reflected in the wages we receive.” Frey, therefore, asked that the folowing addition be made to the committee’s report: “Social inequality, industrial instabiity and injustince must increase unless the workers’ real wage—the purchasing power of their wages —is advanced in proportion to man’s increasing powers of production. On the following day the new draft was offered and adopted. It reads as follows: “W'e hold that the best interests of wage-earners as well as the whole social group, are served by increasing production in quality as well as quantity, by high wage standards, which assure sustained purchasing power to the workers and therefore higher national standards for the environment in which they live and the means to enjoy cultured opportunities. Wo declare that wage reductions produce industrial and social unrest and that low wages are not conductive to low production costs. We urge upon wage earners everywhere : “That we oppose all wage reduction, and that we urge upon management the elimination of waste in production in order that selling prices may be lower and wages higher. To this end we recommend co-operation in study of waste in production, whjfth the assay of the Federal American Engineerng Societies covering important industries has shown to be 50 per cent, attributable to management and only 25 per cent, attributable to labour, with 25 per cent, attributable to other sources, principally managements, industries producing commodities for any sigle industry under consideration. Social inequality, industrial instability and injustice must increase unless the workers’ real wagesthe purchasing power of their wages —coupled with a continuing reduction in the number of hours making up the working day, are progressed in proportion to man’s increasing power of production.” The decision on wage policy was unanimous, without so much as a debate. The 400 delegates voted to declare that the American workingman must begin to protect himself against being subordinated to increasing introduction of labour saving machinery and electric power. They acted on the principle that the offset lay in proportionate increase of wages with respect to purchasing power and decrease of working hours. The weight of the pronouncement, in expressed opinions of the delegates, was in the last paragraph. The introduction yesterday of these two principles was what took the convention by surprise and caused it to take the matter under advisement over night.

President William Green hailed the declaration by saying: “This action places American labour in a most advanced position on wage theories. It may be regarded as the enunciation of a new idea. It is a position far in advance of any position we have ever taken before. We are the Lkreshhold of a great new era. We are in the infancy of giant power. A new condition is here, and we must meet it, and this is our way of meeting it.”

A BANKER'S VIEW.

The Bulletin of “The National City Bank of New York” comments as follows: “Whether or not these declarations are to be taken as enunciating u new and advanced policy seems to depend upon whether the dominent idea is that great possibilities for the labouring masses lie in increased production, or that increased productive capacity is a menace to be neutralised or suppressed in some manner. Does the Federation have a vision of the universal gains to be had from an increase of productive power, and is it inspired to co-operate in obtaining them, or is lit on the offensive? Obviously it will make a great difference which way the influence of organised labour is given. The Frey amendment as originally proposed did not raise this question, but in the resolution as adopted it is nearly smothered by expressions which are suggestive of the traditional attitude of labour toward machinery. The idea of connecting up the

working man’s advance with increasing production is all to the good. It is not only true that his real gains njust come through industrial progress, but that industrial progress will utterly fail of results and actually choke down for want of an expanding market unless I here is the widest possible distribution of benefits. All plans for increasing production necessarily contemplate a corresponding increase of consumption, and the only way that consumption can be obtained is through a constant increase in the buying power of the masses. Broadly speaking, everything produced in all the industries must be sold back to the people engaged in the industries, for there is no other way of disposing of the output. Questions may be raised as to the relative distribution between proprietors and employees, but the proprietors are not runnig their works on the theory that they are selling their products to each other. They are striving for the broadest possible market, and that can be had only through the purchasing power of the masses. Therefore there can be no controversy over the proposition that “real wages’’—the purchasing power of wages—must increase in proportion to man’s increasing power to production.” It is the basic principle of the existing order of society It is in line with all experience. It is a declaration in favour of just what has been taking place ever since capital began to be used for increasing production. Mr. Frey’s original statement and amendment are entirely sound and unexceptionable. It is true that wages cannot be based upon a theoretical conception of the standard of living. It is certain that nobody will pay wages very long unless they are covered by the value of the services rendered; not even a socialist state could do that. CONTRAST WITH NEW ZEALAND.

What gives food for thought to us in New Zealand is the contrast of policy enunciated by this great Federation of Labour in America and the generally pronounced Labour policy here, and in Australia. Under our Arbitration Law, and apart from it, we are constantly engaged in settling wage standards “upon a theoretical conception of the standard of living.” The idea of basing wages on the value of output and seeking from increased production advancement in Labour’s benefit is a view wo seldom find expressed by any Labour Union in these Dominions. The New Zealand Alliance of Labour made a pronouncement on wages which was founded solely on the cost of living basis. Unions and their officers have folowed suit. The question of relation between the work given and the wages received is passed over. Still it is only from the production that wages can be paid. Employers and employed might well consider whether greater general benefit will not result from giving more attention to production and relying less on the speculative basis of the cost of living. High production, elimination of waste, good wages and lowered prices are ideals of Labour in America, which could be tried here, we think, with advantage. (Contributed by the New Zealand Welfare League).