Our Common Enterprise: A Way Out for Labor and Capital
I. THE IMPOSSIBLE SITUATION
ALTHOUGH much might justly be said as to what labor-unions have secured for wage-earners, and as to the necessity for such organizations, in case employers are not willing to do what is fair in relation to their employees, yet, from the point of view of the man responsible for the operation and success of a business, the labor-union is a militant organization, to get results by force. Whatever may be the motive, there is the purpose to compel. Force need not necessarily be physical; but reliance upon pressure or force, of one sort or another, underlies the union’s effort.
The labor-union makes its own decisions regarding policies and standards, and, as far as possible, compels employers to accept these decisions. From the point, of view of the labor-union, the employer must be forced to do those things which, for one reason or another, the labor-union regards as desirable or necessary. In fact, at the very foundation of the labor-union is the conviction that economic or other force or pressure must be brought to bear upon the employer, to get him to do those things which otherwise he would not do.
The strike is the great weapon of the labor-union. This is the economic, and often the physical, force which the laborunion brings to bear upon the employer, to compel him to act. Always the laborunion seeks to make the strike-weapon more and more effective. Many times, the actual use of the strike-weapon may be avoided, if its forcefulness and effectiveness are manifest. The mere threat to strike is often sufficient, to accomplish the purpose; just as the pointing of a gun often accomplishes the purpose without the need of actual firing.
Wherever the labor-union can establish the closed shop (a shop where only union members can be employed), the strike-weapon is obviously more effective. Therefore, the labor-union seeks the closed shop. Conditions frequently make it undesirable to raise the issue of the closed shop; but inevitably, and of necessity, the labor-union works toward the closed shop; and, wherever and whenever possible, realizes its aim.
To make the strike-weapon even more effective, the labor-union opposes the forces of law and order. The militia and the state constabulary, when used to afford the protection of law, weaken the effectiveness of a strike; and therefore the effort of the labor-union is, constantly and unceasingly, to seek freedom from this interference. For the same reason, the labor-union finds itself in opposition to the courts, and particularly to the use by the courts of the injunction, the power of law designed for the very purpose of preventing the destruction of property and other prospective violations of law. Recently the American Federation of Labor, in a formal document, announced the determination that, under certain circumstances where the labor-union disapproved of the court’s decrees, they would be resisted, ‘whatever may be the consequences.’
In a similar way, the effectiveness of the strike-weapon is reduced if the labor-union is legally responsible for its acts. Consequently it seeks freedom from such responsibility. Not only does it oppose incorporation, but it endeavors to secure exemption from, longestablished laws imposing responsibility for collective action — the laws against conspiracies, combinations in restraint of trade, and the like.
Another effort, of the labor-union to make more effective the strike-weapon is the intimidation of workmen — the workman who declines to strike and the workman who works in the striker’s place. The word ‘scab’ and other epithets are used for this purpose. Likewise, so-called ‘pickets’ are placed around the work-place. Even if there be a sincere effort to maintain ‘ peaceful picketing,’ physical force and violence are almost certain to follow, so great are the emotions aroused in industrial conflicts.
Other efforts in the same direction are the ‘sympathetic strike’ — the bringing of outside pressure to increase the power of a strike; the use of the ‘union label,’ and the word‘unfair,’— which seek to bring other workmen in related business, or the consumer himself, to the support of the strike; the refusal of other unions to supply material, to permit the use of product, or to furnish transportation. Much work that has actually been done — electrical wiring, plumbing, carpentry, masonry, what not — has to be torn out because some union is using its power to increase the power of some other union. All these methods have the same purpose.
From the point of view of the business man, not only is the labor-union this great force in opposition, — this great power to compel action, — but it is part of a broad movement to improve the workers’ position, and is therefore concerned, not with the problems of a particular company, but with the so-called class-struggle. Even to business men who are in sympathy with this broad effort, operation of a particular business provides no opportunity to cure the great economic ills of the world.
The labor-union seeks to get more for the workman and to make it possible for him to work less. Whatever the workman gets, the labor-union is interested in seeing him get more; however little he may work, it is better if he works less. Apart from this, there is no goal for the labor-union. In other words, there is no definite programme, the accomplishment of which would mean ultimate satisfaction. For example, after the eight-hour day comes the forty-four-hour week, and then the seven-hour day, the six-hour day, and so on. No amount of pay is satisfactory if more can be obtained.
As illustrating this general principle, there is the demand for the basic eighthour day. Here advantage is taken of the popular support of a true eighthour day, in order to secure increased pay. The workman, under the basic eight-hour day, often actually works nine, ten, or more hours, as before, but gets more pay by getting his original pay for the first eight hours of work and increased pay — usually time and a half — for the other hours; the intention, all the while, being to work the full time.
In this same spirit, and for a like purpose, the labor-union seeks to limit a workman’s output. In defiance of the fundamental facts, that the world can enjoy only what is produced, and that, there is no immediate possibility of producing all that the world has the capacity for enjoying, the labor-union has always proceeded as if there were only so much work to be done, and this work should afford the maximum of employment.
Restriction of output is brought about in part by insistence on a uniform wage — which means that there is no reward for hard work, and loafing on the job is encouraged rather than penalized. The advantages and benefits of the piece-work system of pay, when fairly administered, are manifest, but the labor-union opposes this system with its utmost power and vigor.
In fixing the standard of a job, the labor-union not only seeks to have it set low, but constantly endeavors to reduce it. For example, when even a poor workman could lay, say, a thousand bricks a day, the standard has been reduced from time to time, until often 300 or 400 is the maximum permitted.
With like purpose the labor-union opposes the training of workmen, by establishing rules regarding apprentices which not only limit unduly the number who may be trained, but fix such long periods for training that, long after a quick man has fully qualified himself to do work, he is not permitted to get the benefit of his knowledge and experience.
Not only are there these efforts to limit output, but there are similar efforts to increase the number of men who must be employed. There are the so-called ‘full-crew’ rules of the railroad unions, rules which have been embodied, to a great extent, in legislation. These often require that more men be used for the movement of cars than are needed for safety or efficient operation. There are, likewise, the rules of the Plumbers’ Union, the Machinists’ Union, and numerous others, requiring the employment of a ‘man and helper’ for work that is often not enough for one man.
For a similar purpose are the elaborate rules governing the nature and extent of the work of the carpenter, the electrician, the machinist, the boilermaker, the housesmith, and other union members. Often carpenters must suspend operations for hours, until electricians come to do a piece of work which a carpenter could do in a few minutes. These rules are well illustrated in repair-work on locomotives, where frequently six or eight men — a ‘ man and helper’ from each of three or four different unions — are required to stand by to do, one after another, little pieces of work, when the whole job could be done by any one of the six or eight in less time.
One very serious effect of these efforts of the unions comes from the fact that at times they cannot agree among themselves regarding the work to be done by each union, and then great so-called ‘jurisdictional’ rows tie up operations. Meanwhile, the employer is helpless; for, if the work in question is done, say, by the electricians, the machinists strike, and vice versa. Sometimes all the building trades in a given locality are idle for considerable periods, because of such internal disagreements.
The business man, on his part, is struggling always with the problems of his particular company — how to meet the demands of the market, how to meet competition, how to keep the company solvent and successful, by producing at a cost lower than the price at which he must sell. These problems of each company and each business are lost sight of in the broad labor movement. In fact, they are not considered at all. Even if a business man comes to realize that the employer and employee are in many respects engaged in a common enterprise, he cannot discuss with union men the all-important question, ‘How can we make our company successful?’
On the contrary, the union makes it necessary for the business man to deal with union officers, who do not work in his company and are not concerned with its success or failure. These officers, elected as they are by union men in many different companies, must show ‘results,’ in order to hold their jobs as union leaders. These results are usually shorter hours, more pay, more men employed, less work to do. Often these results prevent production, or sustained operation, and sometimes they bring business to a standstill.
Thus the success of a union builds up a control of an industry outside of the industry itself. When an industry is fully unionized, a small group, sitting apart from the industry and having at their command the powerful strikeweapon, can virtually decide under what conditions the industry shall be operated. This is well illustrated in the case of the great railroad unions, which have exercised this power for some years. This power, it is to be noted, is without responsibility for satisfactory or successful operation. It is also to be noted that this outside power is not under the control of the Government , and is therefore not subject to action by the public, through the Interstate Commerce Commission, or Congress, or otherwise.
The exercise of this far-reaching power by successful labor-unions is largely emotional. In the great meetings decisions are reached by mass action. Great bodies of men sway; they do not deliberate. Furthermore, when strike votes are taken, and the individual members are appealed to, the decisions are apt to be reached on a wave of emotional enthusiasm.
Even when the leaders of a union are disposed to be thoughtful and deliberate, they cannot overlook the conditions under which appeal is made to their followers. Men who appeal to the emotions have great power in the unions. The following that such men get sometimes creates an irresistible temptation. Conditions such as those in the New York building trades, where the strike-power has been bought and sold, are not unnatural.
Mention has been made of the disputes between unions regarding the right to do certain classes of work — for example, who is to put in a fireproof window-frame, the carpenter or the metal-worker? These disputes are promoted by the natural desires of union leaders to show ‘results’ to their followers. Successful unions have an advantage of position in the strikeweapon over the less powerful; and as unions grow in strength, there is a temptation to struggle for coveted work. This power of might has not been controlled, and is not likely to be controlled, by the American Federation of Labor.
The control exercised by a successful union has one effect of far-reaching consequence. Workmen know that, if they are discharged for not following the foreman’s instructions, for flaunting his authority, for loafing, or what not, the union can compel their reinstatement. This tends to break down necessary discipline, to slow up production, and, in many respects, seriously to interfere with the successful operation of a plant.
The very nature and basis, therefore, of the labor-union movement arrays employer and employee in battle. The organization is for struggle — to compel an adversary to act against his will. Throughout the whole movement is the thought of class-antagonisms. For generations the campaign has been organized in this spirit and for this purpose. There must be no fraternizing with the enemy. All efforts to develop a common enterprise are opposed. The campaign is for contest and struggle. The weapon is the strike. The goal is more pay, less work.
The labor-union encourages and openly invites similar organization on the part of employers — founders’ associations, coal-operators’ associations, building-trades councils, a national organization of railroad executives. The struggle is always to prevent a company from dealing with its employees, to prevent a railroad from dealing with the employees of that railroad. This is natural, and for two primary reasons. First, the more widespread the organization, the more potent the strikeweapon; and second, when all producers in an industry must suffer alike from union limitations and requirements, there is less incentive to the producers to resist the efforts of the union.
For example, the consequences of a strike in the coal-fields, or on the railroads, are so far-reaching, now that these unions have grown great, that many concessions will be made to avoid strikes. Furthermore, as the different coal-operators in the union fields must each operate under the union rules, and the costs of each are equally affected, there is not much incentive to resist the union demands. In fact, the miners and the operators in the Middle-Western fields were jointly indicted for agreeing among themselves upon large increases in costs, and larger increases in selling prices to the public.
For years the railroads made little effective resistance to union demands; for, whatever the cost, the public paid. It is only recently, since freight-rates have been so increased as manifestly to destroy industry, that the railroads have learned the importance of economical management. Now it is a question whether the unions are not so great in power that efficient management cannot be established.
During the war the unions greatly increased in strength. This was due to two main reasons. First, there was a shortage of labor, a condition which naturally gave greater power to the unions in the struggle against the employers. This condition alone would have caused much growth in union strength. But the growth was still greater because the United States Government conferred with, and relied upon, union leaders throughout the war. Many employers who had steadfastly resisted the unions were compelled to deal with them by the attitude of the Government. This gave the unions an extraordinary opportunity for growth.
The recent open-shop movement has been a natural reaction. The surplus of labor would have caused a reaction in any event, for the struggle between unions and employers sways back and forth: in times of inactivity, when there is a great demand for jobs, the strength of the union wanes.
With the end of the war and the withdrawal of the Government as a big factor in industry, those employers who had been forced to deal with the unions found the opportunity to resume their previous attitude. The open-shop campaign is therefore the direct result of the conditions which existed during the war.
This open-shop movement, however, is not constructive: it is merely protective— a part of the struggle with the unions. During this period of depression, the employers will naturally gain strength and will offset much of the advantage gained by the unions during the war. But the time will no doubt come when the advantage will again be with the unions, and they will grow. Thus the struggle will continue — now to the advantage of one side, now of the other.
In fact, the struggle between the employer and the labor-union is not constructive on either side. The laborunion struggles for power to compel action by the employer; the employer struggles for power upon his part. If he is forced by the union, he ‘gives in ’ as little as possible, and bides his time. Later, when economic conditions favor him instead of the union, he recovers, if he can, what he has given up, and gains, if possible, additional advantage in order to prepare for the next onslaught.
This attitude of the employer, and the methods he has used in fighting the unions, are no doubt responsible for much that the unions do. In fact the employee might make a list of the harmful things done by the employer as long as the above statement about the unions; for it has been a hot fight on both sides. In addition, the employer has the responsibility of having initiated the struggle, which originally developed from the attitude of the employer to the employee.
However this may be, the struggle does not promote common effort, and does not tend to greater production, at less effort, of what the world needs. Profit-sharing, piece-work, any method of pay proportionate to work, joint ownership or responsibility — all joint efforts are discredited. Such methods, opposed by the unions as weakening their efforts, favored by many employers merely for strategical purposes and as means of industrial warfare, not as true opportunities for developing sound relations, are often abandoned when economic conditions make them ‘unnecessary.’
The most serious obstacle to sound constructive effort in solving this great industrial problem — this relation of employer to employee — is that college professors, college men, and other thoughtful and well-intentioned men outside of industry (and some less thoughtful but equally well-intentioned men within industry) favor the laborunion in a struggle, the underlying conditions of which they do not yet understand. Carried away by their sympathy for what they consider the ‘under dog,’ they do not analyze the situation. If they realized that success for the labor-unions would mean a disaster quite as great as success for those who see only the need of destroying the unions, they would know that they are lending their effort and encouragement to a struggle where the most that can be hoped is that neither side will win, but that the contest will sway back and forth, — a drawn battle, — with great suffering and great economic loss on both sides.
Thoughtful men must in time see that what is needed is common effort. Production is clearly the true purpose of industry; employer and employee are inevitably engaged in a common enterprise. The endeavor to get great power for the labor-union or great power for the employer must retard sound, constructive development. When the employer is engaged in a hard struggle to resist the unions, he cannot, even if he is so disposed, give the proper support to the development of a relationship sincerely based on this common effort.
Thus the great struggle between the employers and the labor-unions has necessarily made constructive work difficult. Passions are aroused, the atmosphere is one of suspicion and fear. Always there is the need of protection from attack.
II. A WAY OUT
Notwithstanding all this, however, there has already been developed in a number of companies a relationship between employer and employee which gives promise of an ultimate solution of this underlying industrial problem. Even now it is clear that, instead of the future promising, at the utmost, no more than the prospect of a drawn battle, with its disastrous consequences, there is ground for hope of a real common effort in industry, an effort based on the true principle of a joint enterprise. This is the development to which college men should give their support. This relationship rests upon this great cornerstone — this all-important fundamental: — fair wages, hours, and working conditions are questions of fact, to be decided as such.
This principle demands that the employer shall not, at any time, force upon the employee wages, hours, and working conditions, merely because he has at the time the economic power to do so. Otherwise, it becomes necessary for the employee to force upon the employer the wages, hours, and working conditions which he has at some time the economic power to bring about. In accordance with this principle, therefore, the basic conditions of work are not regarded as the product of economic necessity, or of so-called bargaining, either collective or otherwise.
As industry exists, a workman must be employed in order to live; production by means of factories, machinery, and tools, makes this necessary. If a man is experienced and trained, he is even, to some extent, dependent upon employment in a particular industry, possibly in a particular plant. This is especially true if he owns his home, or is otherwise established in a community. The rise and fall of activity in the business cycle bring times when there is much unemployment, when there are many seekers for a job and, often, at any wage or for any hours or under any conditions which will give a bare livelihood. At such times the employer has a great economic advantage in fixing the wages, hours, and working conditions of his employees.
The underlying principle of the relationship under discussion is that the employer shall not take advantage of the opportunity thus given to him. On the contrary, it is based upon the fact that, at any time, for any company, there is a fair wage that can be paid, if any wage can be paid. The conditions in the company, in the industry, and general business conditions, determine this. Sometimes it is higher, sometimes lower; but whatever it is, it is not to be determined by the amount at which men would rather work than be out of employment. Likewise, this is equally true of hours of labor and of other conditions of work. What this wage is, what these hours are, what these conditions of employment are — these are questions of fact, to be determined as such.
Confusion and harm have come from the use of the expression ‘collective bargaining.’ What affects a man’s very livelihood is not truly the subject of bargaining. With production as it is, most men often have no alternative except to work for what they can get. The wages men receive determine to what, extent they and their families shall participate in the products of the world. No true bargain can be struck regarding so vital a matter.
Bargains are reached between negotiators. Where a man must sell, and this fact is known, there can be no true bargain. More and more, in all branches of business, where the buyer and seller are not equally free, the tendency is away from so-called bargaining and toward prices that are fair under the conditions. The thought of ‘collective bargaining’ rests upon the entirely erroneous assumption that employer and employees are free to reach an agreement or not. With conditions in industry as they are, ‘collective bargaining’ necessarily involves reliance upon economic pressure — either by employer or employees, or both. If fair wages, hours, and working conditions are regarded as questions of fact, they cannot be determined by ‘collective bargaining.’
It is important in this connection, to bear in mind that wages, hours, and working conditions are part of the cost of production. Moreover, selling prices are largely influenced by this cost of production, and what wages will buy is determined by these selling prices. Great fluctuations in wages and great fluctuations in prices go hand in hand and have harmful consequences, as we have seen in the last few years. This makes it very important that economic pressure (collective bargaining) should not be the determining consideration in fixing wages, hours, and working conditions, and is another strong reason why they should be regarded as questions of fact, to be treated as such.
In the different companies which have adopted this principle, the question of fact — what, from time to time, are fair wages, hours, and working conditions — has been determined in different ways. One way is that of the Standard Oil Company of New Jersey.
In March, 1918, this company invited the employees in its refineries to elect representatives to confer with the management. Since that time, all questions affecting wages, hours, and working conditions have been determined in conferences between representatives of the company officers and representatives of the employees. If the question affects only a department, the meeting is with representatives of this department; if an entire plant, with the representatives of the plant; if several plants, with the representatives of these plants. The number of employees’ representatives varies with the size of the plant, but it is ordinarily one for each 150 employees.
In any meeting the representatives of the company are never more than the employees’ representatives present, and, as each person has one vote, the company representatives never have a majority. In a practice extending now over three years, covering a period of decreasing as well as increasing wages, these meetings actually have decided the action of the company regarding wages, hours, and working conditions. Each decision comes as a result of the consideration of what at that time the company should do, according to sound business principles. The Board of Directors is the final authority; but in actual practice these matters are harmoniously settled in joint conference. This experience alone has made clear that fair wages, hours and working conditions can actually be determined from time to time as questions of fact.
The method of the Standard Oil Company of New Jersey is doubtless the most democratic, and clearly one of the simplest. A similar method is in use by the General Electric Company at Lynn, Massachusetts. Other methods are the so-called Leitch plan, — in effect in numerous companies, — and the ‘Industrial Republic’ of the Goodyear Tire and Rubber Company. In fact, there are all kinds and degrees of plans, endeavoring more or less successfully to accomplish the same purpose.
It is by no means essential, however, that the method be democratic. Just as sometimes in political life an able and benevolent monarch furnishes a highly successful government, so in industry the officers of a company can actually determine from time to time what are fair wages, hours, and working conditions, with no more than informal contact with employees.
Of this nature is the industrial situation of the Endicott Johnson Corporation, probably the most satisfactory in the United States, possibly the most satisfactory in the world. This corporation, the largest single producer of shoes in the world, employs in its plants at Johnson City and Endicott, New York, not far from Binghamton, approximately 13,000 people. Here, for the settlement of labor-problems, there are no representatives of the employees, and no other labor-relations machinery of any sort. George F. Johnson, the president of the company, is the unquestioned leader of the employees as well as of the company. He has their full trust and confidence, and his decisions as to what are fair wages, hours, and working conditions have been unhesitatingly accepted for many years. When industrial conditions permit, wages are increased; when necessary, they are reduced. Hours and working conditions are determined in the same way. Always the decision is reached on consideration of what is fair under all the conditions; never what can be forced under economic pressure.
No doubt, in the long run, a democratic method is better in industry, as it is in government. Some day, unquestionably, the Endicott Johnson Corporation will adopt such a plan as that of the Standard Oil Company of New Jersey, which has been studied and is much admired. But to-day, with George F. Johnson in his prime, no man conversant with this situation — wonderfully successful as it is — would favor any change.
A sharp distinction must be drawn between those plans which are designed to, and actually do, determine what are fair wages, hours, and working conditions, as questions of fact, and those which merely set up committees and company unions as a bulwark against the labor-unions. In both cases there is the struggle with the labor-unions, but in the one case it is in the background. The plan of the Standard Oil Company of New Jersey and the situation in the Endicott Johnson Corporation are inevitably bulwarks against the unions, or, at least, make their work unnecessary; but the unions are in the background. In these instances the primary purpose is constructive. In many companies, however, there is no constructive purpose: the committees are merely part of a fight against the unions.
The difference is one of fact. Is the effort directed to determining what are fair wages, hours, and working conditions; or is the effort a smoke-screen to protect the company from attack, while the full force of economic pressure is brought to bear upon the employee? While the distinction is not easy in theory, yet, when an examination is made of what is being done, — how the plan actually works, — the purpose and the accomplishment can be seen and the distinction can readily be drawn.
Of course, the unions fight all such plans to the utmost. Where the plans are not constructive, but are merely defensive, the reason is clear. But even constructive plans like that of the Standard Oil Company of New Jersey, which are not anti-union, and which, in fact, guarantee employees against discrimination on account of membership or non-membership in any union, are opposed by the union leaders with great intensity, although the union employees of the company do not share this hostility. Here, too, the reason for the opposition is obvious from the previous discussion. If wages, hours, and working conditions are to be determined fairly, as questions of fact, there is no need of the unions. There is no longer a struggle. If all industry were to follow the example of the Standard Oil Company of New Jersey, it is easy to see that there would be no field for labor-unions.
There is one apparently serious objection to these efforts to determine what are fair wages, hours, and working conditions, and that is the contention that competition in industry makes it impossible for any one company to have fair wages, hours, and working conditions when other companies make full use of economic pressure to get lower costs, and thereby make prices to obtain what business there is when there is not enough for all. The answer to this is that, even with higher wages, shorter hours, and better working conditions, workmen applying themselves wholeheartedly produce at a lower unit-cost than do those working merely under conditions established by economic pressure.
Fortunately, this is not a matter of theory. The Endicott Johnson Corporation, among others, has demonstrated that it is a fact. With higher wages, shorter hours, better working conditions, this company has for many years produced shoes at the lowest unit-cost — and in the face of the most drastic competition. In this connection ‘labor turnover’ is an important factor. The Endicott Johnson Corporation has virtually no turnover. With steady, experienced workmen, accustomed to work together, and all endeavoring to do their utmost, the company finds that it has little to fear from competition in costs. Whatever force, therefore, there is in the objection under discussion, it must disappear as producers more and more realize the economic effectiveness of wages, hours, and working conditions, determined fairly as questions of fact.
Furthermore, it is not to be forgotten that the struggle between the employer and the labor-unions will be with us certainly for a long time, and the laborunions can still be expected to take care of the ‘hard-boiled’ employer. If the labor-unions become no longer an important factor in this respect, it will no doubt be because employers generally have adopted the principle under discussion; and when this time comes, — if it does come, — the wisdom of the principle will be clearly demonstrated as a controlling force in business.
To deal with employees in the manner described is the natural course for the corporation. Under the law, the corporation is a person, an entity; and, as a matter of fact, this is not a legal fiction, for a corporation is actually an entity — it is a number of people engaged in a common enterprise. It is an entity as a baseball or football team is an entity — as an army is an entity. And it is inevitable that people engaged in a common enterprise will endeavor to work together. The natural, normal desire of a man working for a corporation is to work with his fellows. The struggle between the employer and employee in the corporation is unnatural and inconsistent.
In fact, in the corporation, as it is developing, there is no employer, in the old sense of the word. The corporation to-day is a joint enterprise. The money is supplied by stockholders, bondholders, note-holders, banks. The work is done by men and women. Money and labor together engage in production. The officers of a corporation are employees. If they have no money in the business, they supply merely labor; if they do supply money, so does the humblest workman who buys a bond or a share of stock. A stockholder or other contributor of money may any day sell out to someone else. It often happens, on the other hand, that a workman devotes his life to learning the business, and establishes his home where the company operates. An employee whose livelihood thus depends upon the success of the corporation is more truly interested in that success than anyone else. Stockholders usually distribute their risks among various corporations; workmen often stake everything on the success of one corporation.
In the corporation, therefore, the employer is the company, and this is the entity of those who contribute money and labor. It is, therefore, a natural and normal development for the management (who are employees) to say to all the employees, ‘In determining what this company will do regarding wages, hours, and working conditions — we shall sit down together and decide together what to do. Upon these matters depends to a great extent the success of our common enterprise, and we shall jointly reach a decision.’
The Whitley Councils in England are not based upon the principle under discussion. They are part of the laborunion movement. In England, to a great degree, the employers are organized on the one side, and the employees on the other. There the Whitley Councils form points of contact between these great organizations. There the theory is collective bargaining — the use of economic pressure by both sides. The labor-unions in England, as here, accept no responsibility for the success of a company: this is entirely ‘up to’ the employer. The labor-unions get what they can from the employers, and then leave wholly to the employers the task of making business successful.
In England, no doubt, the Whitley Councils are a great step forward in furnishing local points of contact between organizations of employers and laborunions ; but they differ sharply from such an arrangement as that of the Standard Oil Company of New Jersey, where there is no dealing with the labor-unions, and where the effort is to develop a common enterprise. In the one, the purpose is collective bargaining; in the other, the joint determination of what the company should do with regard to matters of mutual interest, particularly hours, wages, and working conditions.
It is sometimes thought that the worker wants to have a part in the management of a company. This is not generally true. The worker no more wants to manage a company than does a stockholder or other supplier of money. Both want the company well managed — but both want to leave that to the ‘management.’ It may be that it would be desirable for the worker to have some part in the management of a company. In view of the growing realization of the part he plays in a corporation, possibly in time he will be compelled to take a part. But his attitude will, no doubt, be that of the average stockholder to-day, who reluctantly assumes such responsibility, and whose highest desires are met if someone else takes the responsibility and runs the company successfully.
Wages, hours, and working conditions are not all that interest the worker. The discussion so far has been confined to these matters, because around them centres the struggle with the unions. Once, however, this struggle is in the background, constructive effort follows in many directions.
For example, if the principle is followed of deciding fair wages, hours, and working conditions as matters of fact, profit-sharing may be successfully adopted. This may become desirable, inasmuch as a well-run business may from time to time earn very large profits. These may come from team-work; they may come from the play of supply and demand, from good management, or from good fortune. They may justify high wages, and still be far beyond the reasonable expectations of stockholders. The Endicott Johnson Corporation, for example, says to the employee: ‘If the company pays high wages, and after all deductions earns ten per cent on the common stock, and still earns more, the ownership of these further earnings will be divided fifty-fifty between the employees and the common stockholders.’
In the Standard Oil Company of New Jersey, from the conferences concerning wages, hours, and working conditions, and ‘other matters of mutual interest,’ there have come plans for sickness and accident benefits, retirement annuities, life insurance and death benefits, and a broad plan for the acquisition by employees of stock in the company — a form of profit-distribution which this company prefers to the ordinary methods of profit-sharing.
It is hardly necessary to say that piece-work, and other methods of pay proportionate to work, also rapidly develop under the conditions discussed. This is likewise true of bonus payments, and other methods of sharing in the gains coming from effective work.
Much has been done, too, toward making the community in which the worker lives a better place in which to live; toward developing churches, hospitals, schools, places of amusement, recreation and exercise, clubs, and libraries. These important matters are of mutual interest. The United States Steel Corporation, which, under conditions of great difficulty, has made some approach to the principle under discussion, has gone far in the development of the cities and towns in which its employees live. Particularly has it developed schools, safety, and sanitation in these places.
A most important matter is helping to make the worker’s dollar go as far as possible. Naturally, what a worker gets for his dollars is really more important to him than how many dollars he gets. Many companies operate restaurants, where the workers can get the best food at the lowest cost. Many assist the workers to conduct coöperative stores, with the same result as to clothing, household goods, and other requirements.
More important possibly, in this connection, than anything else, has been the building of good comfortable homes, available at low rental or at low purchase-price. Many companies have either built, or stimulated the building of, such homes, and have arranged for mortgages at low cost, taken by the great insurance companies and others, and in many other respects have increased the opportunities of the workers to get good homes.
All these developments are steps toward solving one of the great problems of the world — the fair enjoyment of the world’s products. Fair wages, fair hours, fair working conditions, pay in proportion to work, reward in proportion to accomplishment, profit-sharing, ownership of stock, sick-benefits, annuities, insurance, hospitals, safety, sanitation, amusement, recreation, exercise, schools, libraries, good cheap food, clothes, household goods, homes — each is a step.
More and more we learn that there is no panacea, no cure-all. The problem is not of our creation, but comes to us from the past. One step at a time, a little gain here, a little gain there, and ultimately the problem will be solved — not, however, by blind struggle, but by slow, careful, deliberate, constructive joint effort.