The Basis of Industrial Remuneration Author(s): David F. Schloss Reviewed work(s): Source: The Economic Journal, Vol. 2, No.

8 (Dec., 1892), pp. 608-615 Published by: Wiley on behalf of the Royal Economic Society Stable URL: http://www.jstor.org/stable/2955797 . Accessed: 05/02/2013 07:26
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THE BASIS

OF INDUSTRIAL

REMUNERATION

THE three leading methods of industrial remuneration are time-wage, task-wage, and piece-wage. The employee who is enigaged on time-wage sells to his employers whatever labour he shall perform within a given period, the price of this labour (his wages) beinig fixed without any specific reference to its amount. Task-wage differs from time-wage in this respect that the employee binds himself to execute within a given period a specified quantutm of work. Under the method of piece-wage, on the other hand, the price of the labour performed by the employee is fixed with reference to the amount of this labour, without any specific reference to the period occupied by its performance. Such being the general nature of the distinction existing between the principal methods of industrial remunerationi, the particular point to which it is n0ow desired to direct attentioni is the common basis which, notwithstanding this distinctioll, underlies all these systems. If we examine the contract made when an operative is employed on time-wage, we observe, on the surface, a total absence of any stipulation with respect to the amount of output to be produced per hour, day, or week. Nevertheless, an implied condition that at least a certain miniim,)7t output shall be produced in a certain time forms part of every contract for the purchase of labour under the method of time-wage; and, while the employer insists upon getting this mi7inimum amount, the employees, especially if members of a strong trade union, object to give more so that the ratio between output and time is, in many contracts of time-wage, maintained with almost, if niot quite, as much strictness as in the case of task-wage. The practical distinction between time-wage and task-wage is that, if a man on time-wage does not get through his ' tale of bricks ' in a given time, then he is discharged, but cannot be muleted in any money payment, while, if on task-wage, he forfeits a part of his wage proportionate to the deficiency in his output below the standard quantum. But,

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whether the method adopted be time-wage or task-wage, the wage-contract has, in effect, a result-basis as well as a timebasis. The fact that employers are accustomed, whether by express agreement or otherwise, to exact from operatives engaged on time-wage the production within a given period of a definite amount of output is so well-established as scarcely to require explanation or illustration here. The principle disclosed in the answer of a gas manager, who, when asked before the Labour Commission, 'What do you pay your wheelers and stokers?' replied, 'We pay them 5s. 5d. per day of eight hour shifts for carbonising3 tons 2 cwvt.of coal,' is fairly typical of a large number of cases in which the correspondence between the amount of output and the amount of pay is in the case of workmen on timewage in every respect as close as if these men were working on task-wage or on piece-wage. In passing, it is proper to remark that this practice of exacting from workmen engaged on timewage the performance of a definite quantuim of work per hour, day, or week takes two distinct shapes, according as the operatives are, or are not strongly organised. If an employer is able (as he is where the trade union is too weak to resist this action) to pay his operatives each at a different rate, the ' tale of bricks' will vary for each man, men who get eightpence an hour being expected to do 33 per cent. nmore work per hour than those who receive only sixpence. But, where the trade union forces the employer to pay all his men at the same rate, there the ' stint ' (or quantum of output exacted) will be a certain average amount. If the work is found to be costing too much, those who do not do their fair share are discharged from their employment. It is worthy of note that, while the erroneous supposition that the correspondence between output and pay is much less strictly maintained under time-wage than under piece-wage is to a great extent responsible for that opposition to piece-work which has hitherto been deemed an essential part of the Socialist programme, it is now beginning to dawn upon the minds of some of the most intelligent members of the Social-democratic party that, so far as this point is concerned, time-wage and piece-wage stand upon very much the same footing. Thus in a recent number of Die Neue Zeit a compositor, writing in support of this view, mentions that in an office in which he was employed the compositors were, indeed, on time-wage, but each man was obliged under pain of dismissal to produce a fixed amount of work every day; at first, the quantum exacted was two sheets of a certain

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annual publication; after three months the stint was put up to two and a half sheets; now it is three sheets a day.' Certainly, the idea that it is only under task-wage or piece-wage that employers are able rigidly to maintaill a definite ratio between output and pay is quite inconsistent with the facts. Coming lnow to the converse case in which the output of operatives on time-wage is fixed, no longer as high as possible by the employer, but as low as possible by the employees, I may cite the exalmple of the Amalgamated Society of Shipwrights whose memiiberswork on time-wage, but with an express agreement as to the quantity of work of each kind which is to be done per day. Thus at Hull the rules of the trade union provide that ' a day's work in metalling [putting copper sheathing on a ship's bottom] shall in no case exceed twenty-five sheets on hard wood strips, and twenty-eight on soft wood strips. . . . Nine and a half hours to constitute a day's work for five days, Monday to Friday, Saturday five and a half hours'; but ' in no case shall men, when working overtime, do the saime amount of work for a quarter, half, or day's work at overtime, as they do in their ordinary day's work.' Similar provisions are made in respect to caulking, the specified quantity of work varying according as the ship is new or old, and being again different in the case of hard wood and of soft wood; the reduction to be made in the output when men are working overtime is here exactly specified; e.g. in 'caulking over the side' the trade union qua,nttu is ' cut out feet per and horse up, and put in one or two threads-eighty day '; but in overtirne ' at the rate of sixty feet to be a day.' 2 Having now investigated the piece-basis underlying the method of time-wage, let us examine the time-basis of piecewage. Although in a contract for the performance of labour on piece-wage the question of time appears, on the surface, to be excluded from consideration, yet in all trades in which piecework prevails the fact that piece-wage has a time-basis comes into prominence upon every occasion upon which the piece-price to be paid is under discussion. If a number of mnen of similar industrial capacity are set to do work of a nature differing in each case, it will frequently be found that, although the same intensity of exertion be displayed by all, the number of units of output which each is able to produce in a given time is different; under
I ' Piecework and the agitation against it,' By W. H. Vliegen, Die NenteZeit, No. 37 (1891-92), p. 337: compare the articles by the well-known Socialist leader, Domela NietLwenhuis, in Nos. 16 and 36. 2 For other examples of trade union limitation of output see Methods of Industrial Remulneration, by the present writer, pp. 14, 15.

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these circumstances the rate of pay is invariably so fixed that, the smaller the number of, say pounds, which it is possible for each man to produce in an hour, the greater in proportion shall be the piece-wage price which he receives for every pound of his output, this adjustment being made with the express object of securing the equalisation of the men's daily earnings. For example, coal which is easy to work is mined at a lower tonnage rate than coal which is hard to work, the piece-wage prices being so fixed as to make it possible for the men working in the difficult seams to earn the same amount per hour as the mnenworking in the easy places. If a 'hitch' occurs, then, until the seam is again found to be in a 'fair' (normal) condition, the miner will either be put on time-wage (this wage being based on his previous actual average earnings as shown by the pay-sheets of the last two paydays), or will get an extra price per toni so calculated as to bring his daily earnings up to their normal level. Upon similar principles. we find that, if at any time the work of an operative employed on piece-wage becomes easier (as often happens, especially in trades in which machinery is largely used, the introduction of novel appliances enabling the workman to produce without extra exertion an increased output), the piece-wage per unit of output is reduced to such a figure as shall make the man's future weeklyearnings about 1 the same as those of his neighbours (who are still working the old, less efficient machinery). So, again, in all piece-wage trades without exception, whenever a new article is given out to be made up, the piece-price to be paid to the operatives is always fixed at such a sum as will enable the men to earn approximately the same amount per hour upon the new articles as upon the old patterns. We have now to consider those cases in which the time-basis. of piece-wage enters as an all-important factor into the calculations made, not (as in the instances just cited) upon the settle-ment of particular piece-prices under a general wage-standard already agreed upon as a basis, but upon the settlement of the general wage-scale itself. It- must be observed that in cases of this nature the time-basis of a piecp-wage scale will be found to possess a different character in different trades. In some industries the time-basis is fictitious. For instance, a tailor is paid nominally by the hour, so many hours being allowed for the
1 For reasons which cannot be explained within present limits an operative set, to work a new machine usually earns more per week than when he was working an old machine. But in fixing his new piece-wage the man's past weekly earnings aralways the principal factor in the calculation.

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execution of so much work; but his remuneration is really by the piece, the men being admittedly able to complete a coat, for example, in less than the number of hours which their trade union has succeeded in compelling the masters to allow as the standard time for its production. While in the tailoring trade the question between the employers and their men is how many hours shall be allowed for the making of a garment, in the flintglass trade, in which the workmen are also engaged nominally at so much an hour, the discussion is as to 'numbers,' i.e. how many articles the operatives shall be expected to produce per hour. But, as a matter of fact, the men habitually do at least double the stipulated hourly stint; and, since they get paid in direct proportion to their output, their pay is, obviously, a pure In the glass-bottle trade a similar method of piece-wage. -remuneration prevails, except that, while the flint-glass operatives receive the same price per unit for the whole of their output whether within or beyond the nominal quantum, in the bottlemaking industry every article produced in excess of the standard number (agreed to be made in each shift) is paid for, as ' overwork,' at a higher rate. In regard to potters the secretary of a stoneware company in Minnesota writes that the ' men are paid by the " day," that is, the " potter's day," which consists of a fixed number of gallons of a certain kind or size of ware. The average potter will do five " potter's days' " [sic.] work in one calendar day, and he can do six if an expert and not limited in quantity' (quoted by Mr. Schoenhof, Economy of High Wages, p. 191). Other examples of a piece-wage with a fictitious time-basis may be found in the mining industry. Thus in Staffordshire the miner's remuneration is a piece-wage so fixed as to enable a man doing a certain ' stint' of work (a ' holer's day') I at so much per ton to earn a certain suni in a (nominal) day. 'In one seam, for example, a length of 7 feet cut under the seam for a depth of 5 feet' -is a 'holer's day' (Digest of evidence before Labour Commission, Group A., p. 80). Accordingly, when the Cannock Chase miners had their wages regulated by a sliding-scale, that scale provided -that each rise of Is. in the selling price of coal should entitle the miner to an increase of 33d. 'in his stint,' i.e. in the earnings which a man would be able to secure by doing the specified .amount of work comprised in the 'holer's day.' It will be understood that this increase was effected by such a pro rata
1 The terms I holer's day ' and ' stint' appear to be used to signify either the -amount of the work to be done for a certain sum or the sum to be received for doing a certain amount of work.

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augmenltation of the different piece-wage prices per ton paid in the different seams as would enable each miner, by doing the amount of work agreed upon as the 'holer's day' for the particular seam in which he was employed, to earn the new rate, say 2s. 8'd. (in place of the old rate, say 2s. 4-d.). But, as a matter of fact, the man could do much more work in a (real) day than the specified quantum; so that, if the 'holer's day' was fixed at. 2s. 81d., he would, according to the statement made to the. Labour Commission by the Vice-President of the Coalowners' Association, earn, on the average, 5s. 4-d. per (real) day. The Chairman of the South Staffordshire and East Worcestershire Coal Masters' Association said that- the actual daily output of a. hewer exceeds his nominal day's work ('stint '), and his actual daily earnings exceed the nominal day's wage by from 25 to 75 per cent. In the Lanarkshire mines the piece-wage per ton is in the same way based upon a standard of output. called the 'darg' (a Scotch word signifying a day's work) yielding a specified sum per 'day; ' 'but the miners mayput out more than the standard darg, and in that way their For instance, wages are higher than the nominal wages. be 6s. a day, but is -at to present stated the uominal wage we know from figures we have got, and they are admitted by the miners themselves, that the average wages earned by the miners at present may be taken at 7s. a day. . . . Suppose the darg is three tons, as it is in many collieries, the nominal rate. would be 2s. a ton. He may put out 3 tons 10 cwt., and in that way his wage is higher than the nominal or standard wage' (Evidence of Mr. R. Baird, Secretary of the Lanarkshire Coal Masters' Association). In Ayrshire, according to the evidence of Mr. J. Keir Hardie, M.P., the standard 'darg' wage is 5s. 3dper day, but the actual earnings average about 6s. per day.1 To turn to the other class of cases, that in which the timebasis of the piece-wage rate is not fictitious (as in the instances just given), but real, we will take our first illustration from the coal-mining industry carried on in Northumberland and Durham. The piece-wage per ton varies greatly according to the nature of
1 The term used in Ayrshire is ' master's darg,' the original meaning of the term having apparently been the stint of work which a master could require to be done, as a minimumz, in a working, day. It is possible to surmise that the existence of a. fictitious ' day's work' as the basis of the wage-scale in a piece-work trade points to a change in the method of remuneration, the original method having been time-wage with a piece-basis in the form of a minimum output per day exacted by the employer,, and this method having subsequently given place to piece-wage, while the old basis is. still in name preserved.

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the seams; but is in each case so fixed that, whether a man is getting Is. per ton or 2s. per ton, his daily earnin'gs (if he work with average energy) shall amount to an agreed sum (e.g. in Durham 5s. 5d. per day) which is called 'the county average.' If the men in any colliery can be shown to be earning on the average per actual day worked, say 5 per cent., less than 5s. 5d., then the matter is referred to the Joint Committee of masters and men for rectification. Within certain limits a mine-owner, so long as the average earnings of all his men do not fall materially below the county average, is allowed to pay the men in different parts of his mine, sonmea little above, others a little below the county average; but if the men in a particular 'flat' find that their piece-wage is so low that they are earning much (say 15 per cent.) less than 5s. 5d. per day, then they applv to the Joint Committee to have this put Tight. Another example of a piece-wage trade with a clearly defined time-basis is the Lancashire cotton-spinning industry. The piece-wage at Oldham, for exanmple, is a certain sum for every 1,000 hanks (each of 840 yards) spun. This piece-wage varies very greatly (according to the number of spindles on the mule, the speed at which the machinery is worked, &c.); but is always so fixed as to enable an operative working during an agreed number of hours in a week to earn in that time a certain agreed sum.1 In Bolton, and in some other places, the operatives in many mills are paid a piece-wage with a. similar time-basis reckoned, however, not per 1,000 hanks spun, but per 100 draws.2 Thus, the wage-scale fixed for one mill defines the standard weekly earnings to be for 'mules of 930 spindles each, ?3 Os. 6d.,' with an allowance of 2?d. per set for time lost in doffing. The piece-wage varies from 2 81d. per 100 draws (of 65 inches each), which is the rate payable when the mules are running the draw in 15 seconds, to 4 69d. per 100 draws (the rate payable when the mules are working at so low a speed that each outward and return movement of the mule-head occupies 25 seconds) ; but is always of such an amount that, 'whether a man be 'minding' fast-speeded mules with a low piece-wage, or slow-speeded mules
For a full account of the system of payment in the Oldham mills, see the in the Transactions of the British Association, 1887, pp. 310-313 BReport 2 The ' draw' is the outward and return movement of the self-actor, each movement spinning a length of yarn corresponding with the number of inches passed over by the mule-head. It should be noted that each spinner works a pair or set of mules, and has to pay his own assistants. ' Doffing' is taking the cops off the spindles.
1

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with a high piece-wage. he shall in all cases alike be able to make the specified standard earnings in a ' factory week ('56-' hours, less 1V hours for cleaning, and 1 hour 20 minutes for breakages'). The arrangements as to wages in the cotton trade are remarkable for the explicit manner in which reference is made to three of the four factors which lie at the root of the wage-contract under all the different methods of remuneration-time, output, and pay; but (the attainment of the standard weekly production corresponding with the standard weekly earnings depending in this case mainly upon the automatic efficiency of the powerdriven mlachinery) no express mention is made of the fourth of these factors-exertion. If we wish for an illustration of the maintenance of an explicitly defined standard of exertion, we shall find this in the coke industry. Like the miners, the Durham cokemen work under a piece-wage system with a timebasis in the form of a county average. For some time past these cokemen have complained that their piece-wage per ton was ini many cases too low, not because it did not yield the agreed standard daily earnings-very often the men's earnings were admittedly above the county average-but because, in order to earn what they did earn, the men had to handle a greater number of tons than was 'fair; ' that is, they had to exhibit an intensity of exertion greater than was contemplated in their wage-contract. Accordingly, the whole matter was last year referred to' Dr. Spence Watson, who, after taking a large amount of evidence, made an award in which he established an explicit standard of exertion by fixing a definite ' day's work.' Thus the arbitrator decided that the remuneration of 'fillers' (who put the coke into trucks), for example, was to be such as to enable a workman handling 20 tons of coke in the day, at a basis price of 2'd. per ton, to make standard daily earnings of 4s. 2d. per day. Here we have an express and complete recognition of all the four factors (time, output, exertion, and pay) the establishment of a more or less exactly defined ratio between which constitutes the common foundation of all contracts between einployer and employed under each and every form of wage-system. DAVID F. SCHLOSS

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