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JSTRIAL UNREST:
A WAY OUT



BY



B. SEEBOHM ROWNTREE

Author of 'Poverty,' 'The Human Factor in Business,' etc.




INDUSTRIAL UNREST:
A WAY OUT



- .



BY



B. SEEBOHM ROWNTREE

i

Author of 'Poverty,' 'The Human Factor in Business," etc.



LONGMANS, GREEN AND GO.

39 PATERNOSTER ROW, LONDON, E.G.4

NEW YORK, TORONTO
BOMBAY, CALCUTTA AND MADRAS

1922

All rights reserved



/






-..:.. ..v *- -

INDUSTRIAL UNREST: A WAY OUT

THE world is still staggering from the shock
of the war, and every one agrees that the
great need to-day is peace. And yet, al-
though we cry ' Peace, peace,' there is no
peace !

In the field of industry the atmosphere
is as highly charged with electricity as in
that of international relations. Capital and
Labour, each suspicious of the other, stand
by their guns ready for defence, or, if the
occasion serves, for offence, while industry
languishes and the morale of the nation is
weakened by the long-continued idleness
of nearly two millions of her people. The
trade depression caused by the loss of a
large part of our export trade through the
state of Foreign Exchanges is serious enough,
but whenever the clouds of depression show






90259



4 INDUSTRIAL UNREST

a - :siga of- lifting, :some far-reaching strike

* . ' ". ' *'" '

.or Jock-out' tKfows 'us back again, till the task

/;"/* I j .*.

"of itnpeBiDg' ladiiatry^up the incline of pros-
perity seems as hopeless as that of Sisyphus !
Meanwhile, the cause of social progress suffers
through the country's poverty. Surely never
was it more urgently necessary to secure
industrial peace ! Labour unrest is not a
passing evil due to the war. It has always
been present, and it was assuming menacing
proportions before 1914, but its effects, though
serious, were not then ruinous. It took the
form of a constantly recurring series of slight
earthquake shocks, which might damage a
wall in the industrial structure here, or throw
down a building there ; but it was not a
catastrophic earthquake destroying the whole
edifice. Moreover, British industry was in
a strong position, and although much power
might be wasted through lack of proper
co-ordination among its working parts, it
had still enough dynamic to render it
prosperous.



INDUSTRIAL UNKEST 5

But now circumstances have changed.
The storm-clouds which had appeared on
the horizon before 1914 are growing ever
darker and more ominous, and very little
thought is needed to convince us that the
time has come to face the problem of indus-
trial unrest, and see if we cannot in some
way dispel this menace to our national well-
being, at least in its more acute forms.



THREE THEORETICALLY POSSIBLE WAYS
TO SECURE INDUSTRIAL PEACE

Theoretically there are three ways in
which industrial unrest may be allayed.

Making Employers All-Powerful f\]

The first is for the employers to make
their position so strong that the workers dare
not raise their heads. This happened in
the days of slavery and serfdom. Very
occasionally the slaves were goaded to re-
volt against oppression, but their rebellion



6 INDUSTRIAL UNREST

was put down with such savage brutality
that a long interval usually elapsed ere
' peace ' was again disturbed. But slavery
went long since, and the spirit of serfdom
has been growing weaker and weaker among
the workers for a generation, until the war
finally destroyed it.

It is essential to a proper understanding
of the situation to-day that we should realise
that the spirit of serfdom has gone. Much
unrest is due to the failure of certain em-
ployers to grasp this fact. Popular educa-
tion began the process of destroying serfdom.
An uneducated people might be willing,
unquestioningly, to live and act and think
as their parents did ; but education leads men
to ask questions, and the workers have been
asking them furiously for thirty years and
more. They are asking why the employer
should always be the accepted master and
the worker the submissive servant, and why
the position of the worker in industry should
not be that of co-operator. They are ques-



INDUSTKIAL UNREST 7

tioning, often with little capacity for making
due allowances, but none the less insistently,
what we call economic laws; and they are
asking whether they are getting a fair share
of the product of industry, and why there
should be so striking a difference between
the life of the workers and that of : the idle
rich,' of whom, even if they do not come
into personal contact with them, they read
in the newspapers. These and many other
problems are being put forward daily by the
workers. Their education, poor enough, for-
sooth, has nevertheless roused them for ever
out of the apathy which marked the servile
mind.

But if education over a period of years
has been slowly teaching men to think, and
if thought has gradually changed their out-
look, the war has swiftly banished the last
traces of their servility. Just think what
happened ! Men who all their lives had
worked at one job, perhaps in the same
shop, following the trade that their fathers



8 INDUSTRIAL UNKEST

followed, living always in one town, often in
one street, and largely accepting conditions
as they found them as a matter of course,
were suddenly seized by some great power
and deposited in France, Flanders, Palestine,
Mesopotamia, Greece, where they mingled
with men from all nations men from all
over the British Empire and from America.
And what happened, think you ? Was there
not, during the long waiting hours, close
questioning among these men as to working
conditions ? Were not these criticallv con-

V

trasted ? And has not this comparison of
English wages and conditions with those
of the Dominions and the U.S.A. had a
profound effect on the British workers who
fought overseas ? They learnt, too, the
meaning of good rations and ample clothing.
And then there was the challenge : Your
King and Country need you ! '' They realised
that they were needed in the trenches, and
needed in the workshops at home. They
realised that they were essential to the sav-



INDUSTEIAL UNKEST 9

ing of the Empire ; and this conviction sank
into their minds and produced a profound
effect. Oh ! it was a time of intense
education. Very thorough and very rapid,
and the men will never again be as they were
when they left their accustomed grooves
in 1914.

A Balance of Power

The second theoretical way in which to
secure industrial peace is by establishing a
balance of power among federations of/
employers and workers, each party
endeavouring to render itself so strong that
the other dare not start an offensive. This,
broadly speaking, is the method whose
potentialities we are exploring to-day but
it is a perilous experiment, as Europe and
the world found to their cost in August, 1914.
Such a course is no real preventive of war ;
it can but postpone its outbreak, but
when that outbreak does occur its results
are much more serious. We have already



10 INDUSTRIAL UNREST

had evidence of this fact in the paralysing
strikes and lock-outs which characterise
modern industrial warfare.

The Removal of tlie Causes of Unrest

There remains but one method of securing
peace, and that is patiently and with open

minds to explore the causes of unrest and to

j -

seek to remove them. That, after all. is the

1

only road to a lasting peace ; and really it

/

is the only common-sense and scientific way
of dealing with the situation. Unrest is an
industrial disease, and can only be remedied
as a bodily disease is remedied first by

i careful diagnosis of the causes producing it,
and secondly by taking the steps necessary

*to remove them.

I believe the first step is to rid our minds
of the idea that, just because industrial unrest
has lasted for a long time, it is inevitable
while industry continues. Doubtless our
British ancestors spoke in a similar way of
cholera and the plague in the seventeenth



INDUSTRIAL UNKEST 11

century ! So far from imagining that
industrial unrest is inevitable, I think that
its presence constitutes a serious reflection
on the ability of the employers to do their
job efficiently. It is easy, of course, to
blame the other party. It is easy for
employers to blame the idleness and per-
versity and short-sightedness of the workers,
and for the workers to grow angry over the
selfish avarice of the employers, but all
this does not help to eliminate unrest !
That can only be done by constructive
thinking, and the initiative must be taken
by employers.

Now obviously if we desire to secure
something so valuable as real industrial
peace, we must be prepared to pay
for it.

Let us consider what this will involve.
Leaving out of account the unreasoning
labour agitator, who only gains hearers from
among discontented people, I think the
thoughtful worker would say that any



12 INDUSTRIAL UNREST

satisfactory scheme of industry must pro-
vide the following minimum conditions :

The worker should have :

(1) Earnings sufficient to maintain a

reasonable standard of comfort.

(2) Reasonable hours of work.

(3) Reasonable economic security during

the whole working life and in old
age.

(4) A reasonable share with the employer

in determining the conditions of
work.

(5) An interest in the prosperity of the

industry in which he is engaged.

Are these claims such as employers can
rightly entertain ? Before we seek to answer
that question may I suggest that it is essential
to approach its consideration with perfectly
open minds ? It may be difficult for us
to do this, because throughout our lives
the economic relations of employer and
worker have followed certain clearly denned



INDUSTRIAL UNREST 13

traditions, and these have become so fixed
that they almost seem to be an intrinsic
and unalterable part of industry. Moreover,
they are closely associated with the wonder-
ful industrial developments of the last seventy
or eighty years. It is obvious that we
cannot abandon or even modify them in a
careless, irresponsible fashion, and it has
often been argued that any interference
with them might handicap industrial progress
or even render it impossible.

Yet to-day that argument fails to
convince the impartial observer who sees
to what an extent progress is already checked
and paralysed by the perpetual struggle
between Capital and Labour. It is in-
cumbent upon us as employers, by one
means or another, to get industry into sound
working trim ; and if we find that nineteenth-
century methods will not fit twentieth-
century needs, we can but say : ' After
all, we are not living in the nineteenth
century ! :



14 INDUSTEIAL UNKEST

Returning now to the claims formulated
above, let us examine them seriatim.

WAGES

I think we shall agree that no scheme
of industry can be regarded as satis-
factory which does not provide minimum
wages for workers of normal ability which,
in the case of a man, will enable him to
marry, to live in a decent house, and to
bring up a family of average size in a state
of physical efficiency, whilst leaving a margin
for contingencies and recreation. Women
should be able to live in accordance with a
similar standard of comfort, providing for
themselves alone. 1

I do not attempt to indicate what money

1 I refer here to minimum wages, which should be fixed
in accordance with human needs. Wages above the minimum
may be left to be fixed by the higgling of the market. In
laying down the principle which should guide us in fixing
minimum wages for women, I bear in mind the fact
that normally the women worker has not to provide for
others. (See The Responsibility of Women Workers for
Dependents, by B. S. Rowntree and F. D. Stuart. Oxford
University Press, 1921.) I do not here discuss the question
of equal pay for equal work.



INDUSTRIAL UNEEST 15

wage would be necessary to provide such a
standard of life, but there is no doubt that
it would be higher than is paid in a great
number of cases to unskilled labour, and if
the wages of unskilled labour are advanced
there will be consequential advances in the
higher grades of labour. In many in-
dustries, therefore, it may be assumed that
the standard would necessitate an advance
in wage rates over those normally paid.

It may appear Utopian to propose such
a course at a time when employers generally
are engaged, often quite inevitably, in trying
to get wages down in order that they may
produce goods at prices which will command
a market. I do not for one moment suggest
that it would be possible at once to secure
minimum wages in accordance with the
standard I have outlined. What I am asking
is that employers should themselves seek
to raise wages as soon as they can, at any
rate to the standard indicated, and should
regard any lower one as unsatisfactory. It



16 INDUSTRIAL UNREST

would have an immense effect on the relations
of employers and workers if the latter felt
that employers were striving to raise wages
independently of any pressure which Labour
might exercise.

I Increased wages may conceivably come
/from three sources. We may reduce profits,
, or increase prices, or increase the output
^, y ^ i of wealth per worker, whether by inducing
the workers to exert greater energy or by so
improving industrial processes and organisa-
tion as to cause each unit of labour to produce
more.

As regards the reduction of profits, there
may be whole industries so favourably cir-
cumstanced that they could afford to raise
their scale of wages very substantially and
yet earn profits which will ensure adequate
supplies of capital. But if such industries
exist they are certainly exceptions.

I think we may lay down the principle
that Capital must receive such remuneration
as will attract it in whatever measure is




INDUSTRIAL UNREST 17

necessary for the full development of the
industry ; and the first claim over any surplus
beyond this should be that of the workers
who are living below the minimum standard.
Speaking for industry generally, I do not
think we can look for any important source
of increased wages out of profits.

Raising prices is, of course, no remedy,
for we are dealing with real wages, and if
the cost of living goes up, the money income
necessary to maintain a given standard of
life will rise in proportion.

We must fall back, then, on increasing
the output per worker. I think undoubtedly
something can be done by adopting methods
which will induce the workers to put forth
greater efforts. However, facts seem to
indicate that when every step has been
taken in this direction it would still be im-
possible in some industries to pay the wages
required, and in such cases the main source
of revenue must come from the improvement
of industrial processes and administration.



18 INDUSTEIAL UNEEST

Here the possibilities are almost unlimited,
and I submit that it is a fundamental duty
of all employers, by rendering their industry
more efficient, to increase the output per worker
to the point that will allow the payment of
such minimum wages as I have proposed.

Coming now to a practical step, I suggest
that it would not be unreasonable to make
it a statutory duty for all employers within
a given time to raise wages in their industry
to that point. We are moving in this direction
through the means of Trade Boards, which
are fixing minimum wages, but not upon
any clearly defined principle. I think it
would be quite fair to say to an industry :
We will give you five or seven years in which
to improve your industrial methods and thus
pay the minimum wages required. But if
you cannot succeed in doing this within the
given period, your industry will be regarded
as parasitic, and the community will not
suffer if it dies out/ This may sound im-
practicable, but I do not believe it to be so.



INDUSTRIAL UNREST 19

Industrial history has shown, over and over
again, that constant and wisely regulated
pressure upon an industry to pay higher
wages has led to improved methods, which
have enabled the employers to increase
wages without seriously interfering with the
prosperity of the industry, often without
interfering with it at all. It is when a demand
for a substantial wage increase is suddenly
forced on the employers that the damage
is done. The only possible exception to the
course I suggest is agriculture. That could
never be regarded as a parasitic industry.
Doubtless more scientific farming might con-
siderably increase the output of wealth per
worker, so that the farmers could pay at
least such minimum wages as are referred
to above ; but if, after all steps had been
taken in this direction, it were still found
impossible to pay adequate wages, then it
might be necessary to adopt special financial
measures to enable this to be done. That
workers engaged in the most important



20 INDUSTRIAL UNREST

of all industries should be the worst paid
is a condition of things in which no nation
should acquiesce.



REASONABLE HOURS OF WORK

This aspect of the question need only
detain us for a moment. The worker may,
I think, claim that his hours of work shall
allow him reasonable leisure for recreation
and self-expression outside the factory, and
further that they shall not be so long as to
prejudice his health. On the other hand,
if they are too short, it will be impossible
to raise the wealth production per worker
to the point necessary to enable adequate
wages to be paid.

It would be unwise to lay down any hard-
and-fast line, but I think that at present
forty-eight hours has proved to be a satis-
factory general standard, and that any
deviation from it, either up or down, should
be justified by special circumstances.



INDUSTRIAL UNREST 21

REASONABLE ECONOMIC SECURITY DURING
THE WHOLE WORKING LlFE AND IN
OLD AGE

The economic insecurity which charac-
terises our existing industrial system is prob-
ably more potent than any other factor
in causing labour unrest, and this aspect
of industry most urgently claims earnest
and constructive thinking on the part of em-
ployers. We will consider first the question
of unemployment.

UNEMPLOYMENT

The fact that in modern industry it is
the almost universal custom to dispense with
workers, with no concern as to their im-
mediate future, the moment the demand
for their service ceases, gives force to the
contention that labour is treated by em-
ployers merely as a chattel. That state of
things, rightly or wrongly, is regarded by
the workers as an injustice. I am sure



22 INDUSTRIAL UNREST

that we shall never have industrial peace
until we find some way of removing the
menace of unemployment. I do not propose
here to discuss the whole question of how
best to deal with unemployment, or to con-
sider any means whereby it may be possible
to regularise the demand for labour. That
would lead me too far from the main
subject. Clearly, however, it is the duty
of the community to take every possible
step to steady the labour market, and
to provide work for the unemployed in
times of trade depression on satisfactory
lines. But when the utmost has been done
in this direction there will still remain a
margin of men and women for whom work
cannot be found. What is to happen to
them ? I suggest that if, in order to func-
tion efficiently, industry retains a reserve
of workers to meet its varying demands, it
should make adequate provision for the
maintenance of that reserve when it cannot
be absorbed. If employers, as a class, fail



INDUSTRIAL UNREST 23

to acknowledge this responsibility they are,
it seems to me, giving away one of the main
defences of the existing system under which
the capitalist asks the workers to unite
with him in undertaking an industrial enter-
prise. What he says to them is practically
this : ' If you will provide labour, I will
provide the necessary capital. The first claim
upon the product of our joint enterprise
shall be the payment to you week by week
of agreed wages. After that, the other
charges of the industry must be met, and
then, if there is anything over, I will take
it as a recompense for the service I render
in providing the capital. Since I take the
risks of industry, I am justified in taking
the profits/

There is a great deal to be said for an
arrangement of this kind, but at present one
of the principal risks attached to industry
is liability to find oneself unable to earn a
livelihood through involuntary unemploy-
ment due to trade depression. If the capitalist



24 INDUSTRIAL UNREST

leaves the worker to face that risk unaided,
he abandons the ground on which he justified
himself in taking all the profits. But is it
Utopian and unpractical to suggest that the
burden of maintaining the reserve of workers
necessary for the functioning of industry
should devolve mainly upon industry as one
of its normal charges ? I think not. So far
as the very inadequate available statistics
enable us to form an estimate, I think it may
be said that probably, on the average, over a
period of years, about 95 per cent, of the
workers are employed and 5 per cent, are un-
employed. The proportions vary, of course,
according to the state of trade, but the above
estimate is not far wrong. 1 Therefore, even
if the reserve of workers attached to an industry
were to receive their full wages when unem-
ployed, the burden on the industry would only
involve an addition of about 5 per cent, to the

1 We cannot take as a basis for a scheme of Unemploy-
ment Insurance the unique conditions obtaining in 1921
and 1922. These are due to the war, and must be met by
emergency methods,



INDUSTRIAL UNREST 25

wages bill. But human nature being what
it is, it would be unwise to pay unemployed
workers on just the same scale as if they were
employed. I think, however, that if the
capitalistic system of industry is to justify
itself, it must pay the necessary reserve of
workers a sum sufficient to enable them to
live without serious privation and hardship
in periods of inevitable unemployment. In
a word, industry should remove from the
workers the practical menace involved in
their liability to unemployment. The scale \
of payment under the National Unemploy-
ment Insurance Act is totally inadequate
to achieve this end. I suggest that a suitable
scale of payments would be to give every
unemployed person who is able and willing
to work half his or her average earnings when
employed, and in addition to give a married
man 10 per cent, on account of his wife and
5 per cent, for each dependent child under
sixteen, with a maximum of 75 per cent, of
his average earnings.



26 INDUSTRIAL UNREST

Such an unemployment insurance scheme
might be administered by the State, or by
industries, or by individual factories or groups
of factories. I do not here discuss in detail
which of these three methods would be likely
to give the best result.

The first has the advantage of securing
the end universally and in the shortest time.
The second (insurance by industries) has
the advantage of placing the responsibility
for its own reserve of workers on each
industry, and thus giving it a strong
inducement so to organise itself as to reduce
the amount of unemployment. 1 The last
method, which obviously would only be
made use of in default of the others, has
been adopted, with certain modifications,
by my own firm, which employs 7000
workers. What I want to plead for is the
acceptance of the view that it is not
unreasonable of the workers to demand

1 Insurance on the scale indicated above is provided for
throughout the whole of the match industry of Great Britain.



INDUSTRIAL UNREST 27

that, just as a well-administered firm sets
aside capital reserves in periods of prosperity,
so that it may equalise dividends over good
and bad years, so an industry or a firm should
establish a wages equalisation fund, which
will enable it to pay part wages to its reserve
of workers during the periods in which their
services are not needed.

I must now briefly meet various criticisms
which are sure to be urged against the course
I advocate. The first is that such a policy
will lead to gross abuse. It may be said
that if the worker is maintained with-
out serious privation when unemployed,
he will become demoralised. I admit at
once that this is a danger. Still, through
our system of Employment Exchanges and
with the assistance of Trade Unions it has
been found possible to introduce fairly
effective checks to prevent abuse of the
Unemployment Insurance Fund. I do not
claim that such checks have been entirely
successful, even when the benefits provided,


1

Online LibraryB. Seebohm (Benjamin Seebohm) RowntreeIndustrial unrest: a way out → online text (page 1 of 2)