John A. Hobson.

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Problems of Poverty

An Inquiry into the Industrial Condition of The Poor


John A. Hobson, M.A.

Author of "The Problem of The Unemployed,"
"International Trade," Etc.

Sixth Edition

First Published April 1891
Second Edition November 1894
Third Edition July 1896
Fourth Edition July 1899
Fifth Edition May 1905
Sixth Edition 1906


The object of this volume is to collect, arrange, and examine some of
the leading facts and forces in modern industrial life which have a
direct bearing upon Poverty, and to set in the light they afford some of
the suggested palliatives and remedies. Although much remains to be done
in order to establish on a scientific basis the study of "the condition
of the people," it is possible that the brief setting forth of carefully
ascertained facts and figures in this little book may be of some service
in furnishing a stimulus to the fuller systematic study of the important
social questions with which it deals.

The treatment is designed to be adapted to the focus of the citizen-
student who brings to his task not merely the intellectual interest of
the collector of knowledge, but the moral interest which belongs to one
who is a part of all he sees, and a sharer in the social responsibility
for the present and the future of industrial society.

For the statements of fact contained in these chapters I am largely
indebted to the valuable studies presented in the first volume of Mr.
Charles Booth's _Labour and Life of the People_, a work which, when
completed, will place the study of problems of poverty upon a solid
scientific basis which has hitherto been wanting. A large portion of
this book is engaged in relating the facts drawn from this and other
sources to the leading industrial forces of the age.

In dealing with suggested remedies for poverty, I have selected certain
representative schemes which claim to possess a present practical
importance, and endeavoured to set forth briefly some of the economic
considerations which bear upon their competency to achieve their aim. In
doing this my object has been not to pronounce judgment, but rather to
direct enquiry. Certain larger proposals of Land Nationalization and
State Socialism, etc., I have left untouched, partly because it was
impossible to deal, however briefly, even with the main issues involved
in these questions, and partly because it seemed better to confine our
enquiry to measures claiming a direct and present applicability.

In setting forth such facts as may give some measurement of the evils of
Poverty, no attempt is made to suppress the statement of extreme cases
which rest on sufficient evidence, for the nature of industrial poverty
and the forces at work are often most clearly discerned and most rightly
measured by instances which mark the severest pressure. So likewise
there is no endeavour to exclude such human emotions as are "just,
measured, and continuous," from the treatment of a subject where true
feeling is constantly required for a proper realization of the facts.

In conclusion, I wish to offer my sincere thanks to Mr. Llewellyn Smith,
Mr. William Clarke, and other friends who have been kind enough to
render me valuable assistance in collecting the material and revising
the proof-sheets of portions of this book.


I. The Measure of Poverty
II. The Effects of Machinery on the Condition of the Working-Classes
III. The Influx of Population into Large Towns
IV. "The Sweating System"
V. The Causes of Sweating
VI. Remedies for Sweating
VII. Over-Supply of Low-Skilled Labour
VIII. The Industrial Condition of Women Workers
IX. Moral Aspects of Poverty
X. "Socialistic Legislation"
XI. The Industrial Outlook of Low-Skilled Labour

List of Authorities

Problems of Poverty

Chapter I.

The Measure of Poverty.

§ 1. The National Income, and the Share of the Wage-earners. - To give a
clear meaning and a measure of poverty is the first requisite. Who are
the poor? The "poor law," on the one hand, assigns a meaning too narrow
for our purpose, confining the application of the name to "the
destitute," who alone are recognized as fit subjects of legal relief.
The common speech of the comfortable classes, on the other hand, not
infrequently includes the whole of the wage-earning class under the
title of "the poor." As it is our purpose to deal with the pressure of
poverty as a painful social disease, it is evident that the latter
meaning is unduly wide. The "poor," whose condition is forcing "the
social problem" upon the reluctant minds of the "educated" classes,
include only the lower strata of the vast wage-earning class.

But since dependence upon wages for the support of life will be found
closely related to the question of poverty, it is convenient to throw
some preliminary light on the measure of poverty, by figures bearing on
the general industrial condition of the wage-earning class. To measure
poverty we must first measure wealth. What is the national income, and
how is it divided? will naturally arise as the first questions. Now
although the data for accurate measurement of the national income are
somewhat slender, there is no very wide discrepancy in the results
reached by the most skilful statisticians. For practical purposes we may
regard the sum of £1,800,000,000 as fairly representing the national
income. But when we put the further question, "How is this income
divided among the various classes of the community?" we have to face
wider discrepancies of judgment. The difficulties which beset a fair
calculation of interest and profits, have introduced unconsciously a
partisan element into the discussion. Certain authorities, evidently
swayed by a desire to make the best of the present condition of the
working-classes, have reached a low estimate of interest and profits,
and a high estimate of wages; while others, actuated by a desire to
emphasize the power of the capitalist classes, have minimized the share
which goes as wages. At the outset of our inquiry, it might seem well to
avoid such debatable ground. But the importance of the subject will not
permit it to be thus shirked. The following calculation presents what
is, in fact, a compromise of various views, and can only claim to be a
rough approximation to the truth.

Taking the four ordinary divisions: Rent, as payment for the use of
land, for agriculture, housing, mines, etc.; Interest for the use of
business capital; Profit as wages of management and superintendence; and
Wages, the weekly earnings of the working-classes, we find that the
national income can be thus fairly apportioned -

Rent £200,000,000.
Interest £450,000,000.
Profits £450,000,000.
Wages £650,000,000.[1]
Total £1750,000,000.

Professor Leone Levi reckoned the number of working-class families as
5,600,000, and their total income £470,000,000 in the year 1884.[2] If
we now divide the larger money, minus £650,000,000, among a number of
families proportionate to the increase of the population, viz.
6,900,000, we shall find that the average yearly income of a working-
class family comes to about £94, or a weekly earnings of about 36s. This
figure is of necessity a speculative one, and is probably in excess of
the actual average income of a working family.

This, then, we may regard as the first halting-place in our inquiry. But
in looking at the average money income of a wage-earning family, there
are several further considerations which vitally affect the measurement
of the pressure of poverty.

First, there is the fact, that out of an estimated population of some
42,000,000, only 12,000,000, or about three out of every ten persons in
the richest country of Europe, belong to a class which is able to live
in decent comfort, free from the pressing cares of a close economy. The
other seven are of necessity confined to a standard of life little, if
at all, above the line of bare necessaries.

Secondly, the careful figures collected by these statisticians show that
the national income equally divided throughout the community would yield
an average income, per family, of about £182 per annum. A comparison of
this sum with the average working-class income of £94, brings home the
extent of inequality in the distribution of the national income. While
it indicates that any approximation towards equality of incomes would
not bring affluence, at anyrate on the present scale of national
productivity, it serves also to refute the frequent assertions that
poverty is unavoidable because Great Britain is not rich enough to
furnish a comfortable livelihood for everyone.

§ 2. Gradations of Working-class Incomes. - But though it is true that an
income of 36s. a week for an ordinary family leaves but a small margin
for "superfluities," it will be evident that if every family possessed
this sum, we should have little of the worst evils of poverty. If we
would understand the extent of the disease, we must seek it in the
inequality of incomes among the labouring classes themselves. No family
need be reduced to suffering on 36s. a week. But unfortunately the
differences of income among the working-classes are proportionately
nearly as great as among the well-to-do classes. It is not merely the
difference between the wages of skilled and unskilled labour; the 50s.
per week of the high-class engineer, or typographer, and the 1s. 2d. per
diem of the sandwich-man, or the difference between the wages of men and
women workers. There is a more important cause of difference than these.
When the average income of a working family is named, it must not be
supposed that this represents the wage of the father of the family
alone. Each family contains about 2¼ workers on an average. This is a
fact, the significance of which is obvious. In some families, the father
and mother, and one or two of the children, will be contributors to the
weekly income; in other cases, the burden of maintaining a large family
may be thrown entirely on the shoulders of a single worker, perhaps the
widowed mother. If we reckon that the average wage of a working man is
about 24s., that of a working woman 15s., we realize the strain which
the loss of the male bread-winner throws on the survivor.

In looking at the gradations of income among the working-classes, it
must be borne in mind that as you go lower down in the standard of
living, each drop in money income represents a far more than
proportionate increase of the pressure of poverty. Halve the income of a
rich man, you oblige him to retrench; he must give up his yacht, his
carriage, or other luxuries; but such retrenchment, though it may wound
his pride, will not cause him great personal discomfort. But halve the
income of a well-paid mechanic, and you reduce him and his family at
once to the verge of starvation. A drop from 25s. to 12s. 6d. a week
involves a vastly greater sacrifice than a drop from £500 to £250 a
year. A working-class family, however comfortably it may live with a
full contingent of regular workers, is almost always liable, by
sickness, death, or loss of employment, to be reduced in a few weeks to
a position of penury.

§ 3. Measurement of East London Poverty. - This brief account of the
inequality of incomes has brought us by successive steps down to the
real object of our inquiry, the amount and the intensity of poverty. For
it is not inequality of income, but actual suffering, which moves the
heart of humanity. What do we know of the numbers and the life of those
who lie below the average, and form the lower orders of the working-

Some years ago the civilized world was startled by the _Bitter Cry of
Outcast London_, and much trouble has been taken of late to gauge the
poverty of London. A host of active missionaries are now at work,
engaged in religious, moral, and sanitary teaching, in charitable
relief, or in industrial organization. But perhaps the most valuable
work has been that which has had no such directly practical object in
view, but has engaged itself in the collection of trustworthy
information. Mr Charles Booth's book, _The Labour and Life of the
People_, has an importance far in advance of that considerable attention
which it has received. Its essential value is not merely that it
supplies, for the first time, a large and carefully collected fund of
facts for the formation of sound opinions and the explosion of
fallacies, but that it lays down lines of a new branch of social study,
in the pursuit of which the most delicate intellectual interests will be
identified with a close and absorbing devotion to the practical issues
of life.

In the study of poverty, the work of Mr. Booth and his collaborators may
truly rank as an epoch-making work.

For the purpose we have immediately before us, the measurement of
poverty, the figures supplied in this book are invaluable.
Considerations of space will compel us to confine our attention to such
figures as will serve to mark the extent and meaning of city poverty in
London. But though, as will be seen, the industrial causes of London
poverty are in some respects peculiar, there is every reason to believe
that the extent and nature of poverty does not widely differ in all
large centres of population.

The area which Mr. Booth places under microscopic observation covers
Shoreditch, Bethnal Green, Whitechapel, St. George's in the East,
Stepney, Mile End, Old Town, Poplar, Hackney, and comprises a population
891,539. Of these no less than 316,000, or 35 per cent, belong to
families whose weekly earnings amount to less than 21s. This 35 per
cent, compose the "poor," according to the estimate of Mr. Booth, and it
will be worth while to note the social elements which constitute this
class. The "poor" are divided into four classes or strata, marked A, B,
C, D. At the bottom comes A, a body of some 11,000, or 1¼ per cent, of
hopeless, helpless city savages, who can only be said by courtesy to
belong to the "working-classes" "Their life is the life of savages, with
vicissitudes of extreme hardship and occasional excess. Their food is of
the coarsest description, and their only luxury is drink. It is not easy
to say how they live; the living is picked up, and what is got is
frequently shared; when they cannot find 3d. for their night's lodging,
unless favourably known to the deputy, they are turned out at night into
the street, to return to the common kitchen in the morning. From these
come the battered figures who slouch through the streets, and play the
beggar or the bully, or help to foul the record of the unemployed; these
are the worst class of corner-men, who hang round the doors of public-
houses, the young men who spring forward on any chance to earn a copper,
the ready materials for disorder when occasion serves. They render no
useful service; they create no wealth; more often they destroy it."[3]

Next comes B, a thicker stratum of some 100,000, or 11½ per cent.,
largely composed of shiftless, broken-down men, widows, deserted women,
and their families, dependent upon casual earnings, less than 18s. per
week, and most of them incapable of regular, effective work. Most of the
social wreckage of city life is deposited in this stratum, which
presents the problem of poverty in its most perplexed and darkest form.
For this class hangs as a burden on the shoulders of the more capable
classes which stand just above it. Mr. Booth writes of it -

"It may not be too much to say that if the whole of class B were swept
out of existence, all the work they do could be done, together with
their own work, by the men, women, and children of classes C and D; that
all they earn and spend might be earned, and could very easily be spent,
by the classes above them; that these classes, and especially class C,
would be immensely better off, while no class, nor any industry, would
suffer in the least." Class C consists of 75,000, or 8 per cent.,
subsisting on intermittent earnings of from 18s. to 21s. for a moderate-
sized family. Low-skilled labourers, poorer artizans, street-sellers,
small shopkeepers, largely constitute this class, the curse of whose
life is not so much low wages as irregularity of employment, and the
moral and physical degradation caused thereby. Above these, forming the
top stratum of "poor," comes a large class, numbering 129,000, or 14½
per cent., dependent upon small regular earnings of from 18s. to 21s.,
including many dock-and water-side labourers, factory and warehouse
hands, car-men, messengers, porters, &c. "What they have comes in
regularly, and except in times of sickness in the family, actual want
rarely presses, unless the wife drinks."

"As a general rule these men have a hard struggle, but they are, as a
body, decent, steady men, paying their way and bringing up their
children respectably" (p. 50).

Mr Booth, in confining the title "poor" to this 35 per cent. of the
population of East London, takes, perhaps for sufficient reasons, a
somewhat narrow interpretation of the term. For in the same district no
less than 377,000, or over 42 per cent. of the inhabitants, live upon
earnings varying from 21s. to 30s. per week. So long as the father is in
regular work, and his family is not too large, a fair amount of material
comfort may doubtless be secured by those who approach the maximum. But
such an income leaves little margin for saving, and innumerable forms of
mishaps will bring such families down beneath the line of poverty.
Though the East End contains more poverty than some other parts of
London the difference is less than commonly supposed. Mr Booth estimated
that of the total population of the metropolis 30.7 per cent. were
living in poverty. The figure for York is placed by Mr Seebohm
Rowntree[4] at the slightly lower figure of 27.84. These figures (in
both cases exclusive of the population of the workhouses and other
public or private institutions) may be taken as fairly representative of
life in English industrial cities. A recent investigation of an ordinary
agricultural village in Bedfordshire[5] discloses a larger amount of
poverty - no less than 34.3 per cent. of the population falling below the
income necessary for physical efficiency.

§ 4. Prices for the Poor. - These figures relating to money income do not
bring home to us the evil of poverty. It is not enough to know what the
weekly earnings of a poor family are, we must inquire what they can buy
with them. Among the city poor, the evil of low wages is intensified by
high prices. In general, the poorer the family the higher the prices it
must pay for the necessaries of life. Rent is naturally the first item
in the poor man's budget. Here it is evident that the poor pay in
proportion to their poverty. The average rent in many large districts of
East London is 4s. for one room, 7s. for two. In the crowded parts of
Central London the figures stand still higher; 6s. is said to be a
moderate price for a single room.[6] Mr. Marchant Williams, an Inspector
of Schools for the London School Board, finds that 86 per cent. of the
dwellers in certain poor districts of London pay more than one-fifth of
their income in rent; 46 per cent. paying from one-half to one-quarter;
42 per cent. paying from one-quarter to one-fifth; and only 12 per cent.
paying less than one-fifth of their weekly wage.[7] The poor from their
circumstances cannot pay wholesale prices for their shelter, but must
buy at high retail prices by the week; they are forced to live near
their work (workmen's trains are for the aristocracy of labour), and
thus compete keenly for rooms in the centres of industry; more important
still, the value of central ground for factories, shops, and ware-houses
raises to famine price the habitable premises. It is notorious that
overcrowded, insanitary "slum" property is the most paying form of house
property to its owners. The part played by rent in the problems of
poverty can scarcely be over-estimated. Attempts to mitigate the evil by
erecting model dwellings have scarcely touched the lower classes of
wage-earners. The labourer prefers a room in a small house to an
intrinsically better accommodation in a barrack-like building. Other
than pecuniary motives enter in. The "touchiness of the lower class"
causes them to be offended by the very sanitary regulations designed for
their benefit.

But "shelter" is not the only thing for which the poor pay high.
Astounding facts are adduced as to the prices paid by the poor for
common articles of consumption, especially for vegetables, dairy
produce, groceries, and coal. The price of fresh vegetables, such as
carrots, parsnips, &c., in East London is not infrequently ten times the
price at which the same articles can be purchased wholesale from the

Hence arises the popular cry against the wicked middleman who stands
between producer and consumer, and takes the bulk of the profit. There
is much want of thought shown in this railing against the iniquities of
the middleman. It is true that a large portion of the price paid by the
poor goes to the retail distributor, but we should remember that the
labour of distribution under present conditions and with existing
machinery is very great. We have no reason to believe that the small
retailers who sell to the poor die millionaires. The poor, partly of
necessity, partly by habit, make their purchases in minute quantities. A
single family has been known to make seventy-two distinct purchases of
tea within seven weeks, and the average purchases of a number of poor
families for the same period amounted to twenty-seven. Their groceries
are bought largely by the ounce, their meat or fish by the half-
penn'orth, their coal by the cwt., or even by the lb. Undoubtedly they
pay for these morsels a price which, if duly multiplied, represents a
much higher sum than their wealthier neighbours pay for a much better
article. But the small shopkeeper has a high rent to pay; he has a large
number of competitors, so that the total of his business is not great;
the actual labour of dispensing many minute portions is large; he is
often himself a poor man, and must make a large profit on a small turn-
over in order to keep going; he is not infrequently kept waiting for his
money, for the amount of credit small shopkeepers will give to regular
customers is astonishing. For all these, and many other reasons, it is
easy to see that the poor man must pay high prices. Even his luxuries,
his beer and tobacco, he purchases at exorbitant rates.

It is sometimes held sufficient to reply that the poor are thoughtless
and extravagant. And no doubt this is so. But it must also be remembered
that the industrial conditions under which these people live,
necessitate a hand-to-mouth existence, and themselves furnish an
education in improvidence.

§ 5. Housing and Food Supply of the Poor. - Once more, out of a low
income the poor pay high prices for a bad article. The low physical
condition of the poorest city workers, the high rate of mortality,
especially among children, is due largely to the _quality_ of the food,
drink, and shelter which they buy. On the quality of the rooms for which
they pay high rent it is unnecessary to dwell. Ill-constructed,
unrepaired, overcrowded, destitute of ventilation and of proper sanitary
arrangements, the mass of low class city tenements finds few apologists.
The Royal Commission on Housing of the Working Classes thus deals with
the question of overcrowding -

"The evils of overcrowding, especially in London, are still a public
scandal, and are becoming in certain localities a worse scandal than
they ever were. Among adults, overcrowding causes a vast amount of
suffering which could be calculated by no bills of mortality, however
accurate. The general deterioration in the health of the people is a
worse feature of overcrowding even than the encouragement by it of
infectious disease. It has the effect of reducing their stamina, and
thus producing consumption and diseases arising from general debility of
the system whereby life is shortened." "In Liverpool, nearly one-fifth
of the squalid houses where the poor live in the closest quarters are
reported to be always infected, that is to say, the seat of infectious

To apply the name of "home" to these dens is a sheer abuse of words.
What grateful memories of tender childhood, what healthy durable

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