THE PARADOXES OF PIECE-WORK.
NO definite information is yet available as to the extent to which the Trade Unions have actually suspended their restrictive regulations. Frequently in the course of the present year we have heard of agreements between Mr. Lloyd George and the Trade Union leaders, but after a few weeks it has leaked out that these agree- ments are ignored by the rank-and-file of the workers. It is thus impossible to be sure of the actual position at the present moment. Before condemning the Trade Unionists, and, indeed, the manual workers generally, for their atti- tude on this question, it is essential to examine their point of view. In practice the manual worker finds that if he and his mates succeed in doing a job in a much shorter time than that previously allowed for it, sooner or later an attempt will be made to cut down the rate of payment for the job. This statement may not be true of all firms, and certainly there are many employers who would only take such a step with great reluctance. But it must never be forgotten that no firm is entirely master of its own pro- ceedings. Every employer must take note of what his competitors are doing, and if one firm by cutting down piece rates of payment is able to produce at a lower cost, other firms will be compelled to follow suit. Realizing this, the manual worker for his own protection decides that he will not work beyond a certain pace. It is true that by so doing ho deprives himself of the advan- tage of an immediate increase in earnings, but he has the compensation of working at an easy stroke and con- tinuing to receive the scale of payment to which be is accustomed, whereas if he exerted himself to his utmost he might find in the course of a few months that the extra exertion only yielded the same weekly earnings as before.
These difficulties have long been recognized both by employers and employed, and an ingenious attempt has been made to meet them by the introduction of the premium bonus system. This is undoubtedly an improve- ment on what may be called the pure piece-work system. The method of the premium bonus is as follows. The foreman estimates that a certain job ought to take a certain time ; if the men entrusted with the job succeed in doing it in less than the agreed time, the gain resulting from that economy is divided between the workmen and the employer. But even this system, though it presents many advantages, is subject to the same disadvantage as the cruder form of piece-work. If the workmen succeed habitually in making a. big economy in the stipulated time, there is a tendency for that time to be reduced, with the result that they are again expected to exert themselves more for the same rate of payment.
This is the workmen's case for the restriction of output, and, as matters stand, it is a good case. Nevertheless, from the point of view of the permanent interest of the wage-earner, as well as of the whole nation, it is obviously in evil that men should deliberately refrain from doing the best work of which they are capable. In saying this it is hardly necessary to add that there is, or ought to be, no desire whatever in any quarter that the workman should exert himself beyond his strength. That is ultimately as uneconomic as. working below his strength, perhaps, indeed, in many cases even more uneconomic.' No work- man ought to be encouraged to work at such a rate or for such a length of time as will injure his capacity. Yet it is probable that this evil now exists to almost as great an extent as the 'evil. Of restriction of output. Neither employer nor employed' have yet been able to hit upon the scientific mean. On the one band, many workmen are encouraged—it may, indeed, almost be said compelled— by low rates of piece-work to shorten their lives by excessive exertion ; while others are tempted—and again it may be said almost compelled—to work far below their effective capacity because they fear that their exertions may be turned against themselves. The result is a double loss of almost incalculable magnitude to the whole nation.
The most promising suggestion that has been made for dealing with the problem is the introduction of co-opera- tion or some form of profit-sharing. In certain cases this has undoubtedly produced admirable results. Mr. Theodore Taylor has testified more than once to the success of the scheme in his own firm as a woollen manufacturer. An even more striking example is furnished by the South Metropolitan Gas Company, which has for many years had in successful operation a scheme of profit-sharing. Other gas companies have since adopted the same scheme. But before jumping to the con- clusion that, because profit-sharing has been successful in these cases, it is therefore the universal solution, one must take cote of the particular circumstances where success has been achieved. In Mr. Theodore Taylor's case it may be legitimately urged that the success is largely due to his own personal enthusiasm for the cause of which he is an apostle. In the case of the South Metropolitan and other gas companies the con ditions are altogether abnormal. Gas companies are not subject to the same conditions of competition with which the ordinary manufacturer must deal. By the nature of the case, a gas company enjoys within its own area a monopoly. By statute its profits are divisible between the shareholders and the gas consumers. If the price of coal goes up, the consumer has to pay more for his gas. If economies are effected in the production of gas,the consumer !bares in the benefit of those economies. Therefore it is in these cases quite easy-to provide that a further partition of profits shall take place between shareholders and wage- earners. Indeed, the only opposition has come from the Trade Union leaders, who feared that the introduction of that system might weaken their power. They were, of course, right from their own point of view, for if the employees of a gas company are in effect given a partner- ship in the business of the company, there ceases to be any raison d' Are for a Trade Union so far as they are concerned. The men's position is assured, and they need no further protection. The principle of profit-sharing, which works so well in the case of gas companies, could safely be extended to railway companies. Indeed, we may go further and urge that in the case of railway companies it is desirable that the analogy of sharing profits with the consumer should also be followed. There ought to be some regular arrangement by which increased railway profits should partly be assigned to increased dividends, and partly to reduction of rates or fares. Simultaneously the employees ought to have a regular bonus depending on the profits of the company. Such a system would secure all the advantages which Socialists claim from railway nationalization, while avoiding the hideous waste and probable political corruption of State management. • It would also probably solve, as it bas done in the case of the South Metropolitan Gas Company, the conflict between Capital and Labour. Doubtless there are many other businesses to which the system of profit-sharing could be satisfactorily applied, but we have to realize that the systetn is not of universal application. Take, for example, an ordinary manufacturing business where the question of profit or loss depends primarily on the success of the management in buying raw material at satisfactory 'prices, and in selling the completed product to advantage, possibly at the other side of the globe: The ordinary operative watching a machine has practically no influence in such a case over the profits of the firm. It is true that those profits will be microscopically greater if he works well, but there is no coin of the realm which will measure the difference made by his efficienCy or inefficiency in the total result. • It would therefore happen that if the earnings of the operative were dependent to an appreciable extent on the profits of the firm, he might find att he end of the year that he was very much poorer than he had hoped to be, although he had been working for the twelve months to the utmost of his ability. Even in this case, however, it is open to question whether employers in their own interest would not be wise to give an exceptional bonus by way of grace wherever they have happened to make an exceptional profit. The workman cannot in such a case claim a bonus by way of right, 'but in all economic questions it is necessary to remember that considerations which go beyond strict equity must be taken into account. Human beings are not economic machines, and unless our scheme of economic organization is constantly supplemented by moral or human considerations it is bound to fail.
Previous page
