Over-Supply of Low-Skilled Labour.
§ 1. Restatement of the "Low-skilled Labour" Question.--Our inquiry into
Factory Legislation and Trade Unionism as cures for sweating have served
to emphasize the economic nature of the disease, the over-supply of low-
skilled labour. Factory legislation, while it may abate many of the
symptoms of the disease, cannot directly touch the centre of the malady,
low wages, though by securing publicity it may be of indirect assistance
in preventing the payment of wages which public opinion would condemn as
insufficient for a decent livelihood. Trade Unionism as an effective
agent in securing the industrial welfare of workers, is seen to rest
upon the basis of restriction of labour supply, and its total
effectiveness is limited by the fact that each exercise of this
restriction in the interest of a class of workers weakens the position
of the unemployed who are seeking work. The industrial degradation of
the "sweated" workers arises from the fact that they are working
surrounded by a pool of unemployed or superfluous supply of labour. So
long as there remains this standing pool of excessive labour, it is
difficult to see how the wages of low unskilled workers can be
materially raised. The most intelligent social reformers are naturally
directing their attention to the question, how to drain these lowlands
of labour of the superfluous supply, or in other words to keep down the
population of the low-skilled working class. Among the many population
drainage schemes, the following deserve close attention--
§ 2. Checks on growth of population.--We need not discuss in its wider
aspect the question whether our population tends to increase faster than
the means of subsistence. Disciples of Malthus, who urge the growing
pressure of population on the food supply, are sometimes told that so
far as this argument applies to England, the growth of wealth is faster
than the growth of population, and that as modern facilities for
exchange enable any quantity of this wealth to be transferred into food
and other necessaries, their alarm is groundless. Now these rival
contentions have no concern for us. We are interested not in the
pressure of the whole population upon an actual or possible food supply,
but with the pressure of a certain portion of that population upon a
relatively fixed supply of work. It is approximately true to say that at
any given time there exists a certain quality of unskilled or low-
skilled work to be done. If there are at hand just enough workers to do
it, the wages will be sufficiently high to allow a decent standard of
living. If, on the other hand, there are present more than enough
workers willing to do the work, a number of them must remain without
work and wages, while those who are employed get the lowest wages they
will consent to take. Thus it will seem of prime importance to keep down
the population of low-skilled workers to the point which leaves a merely
nominal margin of superfluous labour. The Malthusian question has in its
modern practical aspect narrowed down to this. The working classes by
abstinence from early or improvident marriages, or by the exercise of
moral restraints after marriage can, it is urged, check that tendency of
the working population to outgrow the increase of the work for which
they compete. There can be no doubt that the more intelligent classes of
skilled labourers have already profited by this consideration, and as
education and intelligence are more widely diffused, we may expect these
prudential checks on "over-population" will operate with increased
effect among the whole body of workers. But precisely because these
checks are moral and reasonable, they must be of very slow acceptance
among that class whose industrial condition forms a stubborn barrier to
moral and intellectual progress. Those who would gain most by the
practice of prudential checks, are least capable of practising them. The
ordinary "labourer" earns full wages as soon as he attains manhood's
strength; he is as able to support a wife and family at twenty as he
will ever be; indeed he is more so, for while he is young his work is
more regular, and less liable to interruption by ill-health. The
reflection that an early marriage means the probability of a larger
family, and that a large family helps to keep wages low, cannot at
present be expected to make a deep impression upon the young unskilled
labourer. The value of restraint after marriage could probably be
inculcated with more effect, because it would appeal more intelligibly
to the immediate interest of the labourer. But it is to the growing
education and intelligence of women, rather than to that of men, that we
must look for a recognition of the importance of restraint on early
marriages and large families.
§ 3. The "Emigration" Remedy.--The most direct and obvious drainage
scheme is by emigration. If there are more workers than there is work
for them to do, why not remove those who are not wanted, and put them
where there is work to do? The thing sounds very simple, but the
simplicity is somewhat delusive. The old _laissez faire_ political
economist would ask, "Why, since labour is always moving towards the
place where it can be most profitably employed, is it necessary to do
anything but let it flow? Why should the State or philanthropic people
busy themselves about the matter? If labour is not wanted in one place,
and is wanted in another, it will and must leave the one place and go to
the other. If you assist the process by compulsion, or by any artificial
aid, you may be removing the wrong people, or you may be removing them
to the wrong place." Now the reply to the main _laissez faire_ position
is conclusive. Just as water, though always tending to find its own
level, does not actually find it when it is dammed up in some pool by
natural or artificial earthworks, so labour stored in the persons of
poor and ignorant men and women is not in fact free to seek the place of
most profitable employment. The highlands of labour are drained by this
natural flow; even the strain of competition in skilled hand-labour
finds sensible relief by the voluntary emigration of the more
adventurous artisans, but the poor low-skilled workers suffer here again
by reason of their poverty: no natural movement can relieve the plethora
of labour-power in low-class employments. The fluidity of low-skilled
labour seldom exceeds the power of moving from one town to a
neighbouring town, or from a country district to the nearest market
towns, or to London in search of work. If the lowlands are to be drained
at all, it must be done by an artificial system. Now all such systems
are in fact open to the mistakes mentioned above. If we look too
exclusively to the requirements of new colonies, and the opportunities
of work they present, we may be induced to remove from England a class
of men and women whose services we can ill afford to lose, and who are
not in any true sense superfluous labour. To assist sturdy and shrewd
Scotch farmers, or a body of skilled artisans thrown out of work by a
temporary trade depression, to transfer themselves and their families to
America or Australia, is a policy the net advantage of which is open to
grave doubt. Of course by removing any body of workers you make room for
others, but this fact does not make it a matter of indifference which
class is removed. On the other hand, if we look exclusively to the
interests of the whole mass of labour in England, we should probably be
led to assist the emigration of large bodies of the lowest and least
competent workers. This course, though doubtless for the advantage of
the low class labour, directly relieved, is detrimental to the interest
of the new country, which is flooded with inefficient workers, and
confers little benefit upon these workers themselves, since they are
totally incapable of making their way in a new country. The reckless
drafting off of our social failures into new lands is a criminal policy,
which has been only too rife in the State-aided emigration of the past,
and which is now rendered more and more difficult each year by the
refusal of foreign lands to receive our "wreckage." Here, then, is the
crux of emigration. The class we can best afford to lose, is the class
our colonies and foreign nations can least afford to take, and if they
consent to receive them they only assume the burden we escape. The age
of loose promiscuous pauper emigration has gone by. If we are to use
foreign emigration as a mode of relief for our congested population in
the future, it will be on condition that we select or educate our
colonists before we send them out. Whether the State or private
organizations undertake the work, our colonizing process must begin at
home. The necessity of dealing directly with our weak surplus population
of low-skilled workers is gaining more clear recognition every year, as
the reluctance to interfere with the supposed freedom of the subject
even where the subject is "unfree" is giving way before the urgency of
the situation.
§ 4. Mr. Charles Booth's "Drainage Scheme."--The terrible examples our
history presents to us of the effects of unwise poor law administration,
rightly enjoin the strictest caution in contemplating new experiments.
But the growing recognition of the duty of the State to protect its
members who are unable to protect themselves, and to secure fair
opportunities of self-support and self-improvement, as well as the
danger of handing over their protection to the conflicting claims of
private and often misguided philanthropy, is rapidly gaining ground
against the advocates of _laissez faire_. It is beginning to be felt
that the State cannot afford to allow the right of private social
experiment on the part of charitable organizations. The relief of
destitution has for centuries been recognized as the proper business of
the State. Our present poor law practically fails to relieve the bulk of
the really destitute. Even were it successful it would be doing nothing
to prevent destitution. Since neither existing legislation nor the
forces of private charity are competent to cope with the evils of
"sweating," engendered by an excess of low-class labour, it is probable
that the pressure of democratic government will make more and more in
favour of some large new experiment of social drainage. In view of this
it may not be out of place to describe briefly two schemes proposed by
private students of the problem of poverty.
Mr. Charles Booth, recognizing that the superfluity of cheap inefficient
labour lies at the root of the matter, suggests the removal of the most
helpless and degraded class from the strain of a struggle which is fatal
not merely to themselves, but to the class immediately above them. The
reason for this removal is given as follows--
"To effectually deal with the whole of class B--for the State to nurse
the helpless and incompetent as we in our own families nurse the old,
the young, and the sick, and provide for those who are not competent to
provide for themselves--may seem an impossible undertaking; but nothing
less than this will enable self-respecting labour to obtain its full
remuneration, and the nation its raised standard of life. The
difficulties, which are certainly great, do not consist in the cost. As
it is, these unfortunate people cost the community one way or another
considerably more than they contribute. I do not refer solely to the
fact that they cost the State more than they pay directly or indirectly
in taxes. I mean that altogether, ill-paid and half-starved as they are,
they consume, or waste, or have expended on them, more wealth than they
produce."
Mr. Booth would remove the "very poor," and plant them in industrial
communities under proper government supervision.
"Put practically, my idea is that these people should be allowed to live
as families in industrial groups, planted wherever land and building
materials were cheap; being well-housed and well-warmed, and taught,
trained, and employed from morning to night on work, indoors or out, for
themselves, or on Government account."
The Government should provide material and tools, and having the people
entirely on its hands, get out of them what it can. Wages should be paid
at a "fair proportionate rate," so as to admit comparison of earnings of
the different communities, and of individuals. The commercial deficit
involved in the scheme should be borne by the State. This expansion of
our poor law policy, for it is nothing more, aims less at the
reformation and improvement of the class taken under its charge, than at
the relief which would be afforded to the classes who suffered from
their competition in the industrial struggle. What it amounts to is the
removal of the mass of unemployed. The difficulties involved in such a
scheme are, as Mr. Booth admits, very grave.
The following points especially deserve attention--
1. Since it is not conceivable that compulsion should be brought to bear
in the selection and removal out of the ordinary industrial community of
those weaker members whose continued struggle is considered undesirable,
it is evident that the industrial colonies must be recruited out of
volunteers. It will thus become a large expansion of the present
workhouse system. The eternal dilemma of the poor law will be present
there. On the one hand, if, as seems likely, the degradation and
disgrace attaching to the workhouse is extended to the industrial
colony, it will fail to attract the more honest and deserving among the
"very poor," and to this extent will fail to relieve the struggling
workers of their competition. On the other hand, if the condition of the
"industrial colonist" is recognized as preferable to that of the
struggling free competitor, it must in some measure act as a premium
upon industrial failure, checking the output of energy and the growth of
self-reliance in the lower ranks of the working classes. No scheme for
the relief of poverty is wholly free from this difficulty; but there is
danger that the State colony of Mr. Booth would, if it were successful
as a mode of "drainage," be open to it in no ordinary degree.
2. Closely related to this first difficulty is the fact that Mr. Booth
provides no real suggestion for a process of discrimination in the
treatment of our social failures, which shall distinguish the failure
due directly to deep-seated vice of character and habit, from the
failure due to unhappy chance or the fault of others. Difficult, almost
impossible, as such discrimination between deserving and undeserving is,
it is felt that any genuine reform of our present poor law system
demands that some attempt in this direction should be made. We must try
to distinguish curable from incurable cases, and we must try to cure the
former while we preserve society from the contamination of the latter.
The mere removal of a class of "very poor" will not suffice.
Since however the scheme of Mr. C. Booth does not proceed beyond the
stage of a suggested outline of treatment, it is not fair or profitable
to press close criticism. It is, however, a fact of some significance
that one who has brought such close study to bear upon the problem of
poverty should arrive at the conclusion that "Thorough interference on
the part of the State with the lives of a small fraction of the
population, would tend to make it possible, ultimately, to dispense with
any Socialistic interference in the lives of all the rest."[33]
§ 5. Proposed remedies for "Unemployment."--In discussing methods of
dealing with "the unemployed," who represent an "over-supply" of labour
at a given time, it is often found convenient to distinguish the
temporary "unemployment" due to fluctuations rising from the nature of
certain trades, and the permanent unemployment or half employment of
large numbers of the least efficient town workers. The fluctuations in
employment due to changes of season, as in the building trades, and many
branches of dock labour, or to changes of fashion, as in the silk and
"fancy" woollen trade, or to temporary changes in the field of
employment caused by a transformation of industrial processes, are
direct causes of a considerable quantity of temporary unemployment. To
these must be added the unemployment represented by the interval between
the termination of one job and the beginning of another, as in the
building trades. Lastly, the wider fluctuations of general trade seem to
impose a character of irregularity upon trade, so that the modern System
of industry will not work without some unemployed margin, some reserve
of labour.
These irregularities and leakages seem to explain why, at any given
time, a certain considerable number of fairly efficient and willing
workmen may be out of work. It is often urged that this class of
"unemployed" must be regarded as quite distinct from the superfluity of
low-skilled and inefficient workers found in our towns, and that the two
classes present different problems for solution. The character of the
"chronic" class of unemployed makes the problem appear to be, not one of
economic readjustment, but rather of training and education. But this
appearance is deceptive. The connection between the two kinds of
"unemployment" is much closer than is supposed. The irregularity of the
"season" and "fashion" trades, the periodic spells of bad trade, are
continually engaged in degrading and deteriorating the physique, the
morale, and the industrial efficiency of the weaker members of each
trade: these weaklings are unable to maintain a steady and healthy
standard of life under economic conditions which make work and wages
irregular, and are constantly dropping out of the more skilled trades to
swell the already congested low-skilled labour market. Every period of
"depressed trade" feeds the pool of low-skilled labour from a hundred
different channels. The connection between the two classes of
"unemployed" is, therefore, a close and vital one. To drain off this
pool would, in fact, be of little permanent use unless those
irregularities of trade, which are constantly feeding it, are also
checked.
Still less serviceable are those schemes of rescuing "the unemployed,"
which, in the very work of rescue, engender an economic force whose
operation causes as much unemployment as it cures. A signal example of
this futile system of social drainage has been afforded by certain
experiments of the Salvation Army in their City Works and Farm Colony.
The original draft of the scheme contained in the volume, _In Darkest
England_, clearly recognized the advisability of keeping the bounty-fed
products of the Salvation Colonies from competition in the market with
the products of outside labour. The design was to withdraw from the
competitive labour market certain members of "the unemployed," to train
and educate them in efficient labour, and to apply this labour to
capital provided out of charitable funds: the produce of this labour was
to be consumed by the colonists themselves, who would thus become as far
as possible self-supporting; in no case was it to be thrown upon the
open market. As a matter of fact these sound, economic conditions of
social experiment have been utterly ignored. Matches, firewood,
furniture, etc. produced in the City factories have been thrown upon the
open market. The Hadleigh Farm Colony, originally designed to give a
thorough training in the arts of agriculture so as to educate its
members for the Over Sea Colony, has devoted more and more attention to
shoemaking, carpentering, and other special mechanical crafts, and less
and less to the efficient cultivation of the soil; the boots, chairs,
etc. being thrown in large quantities upon the open market. Moreover,
the fruit and vegetables raised upon the Farm have been systematically
placed upon the outside market. The result of such a line of conduct is
evident. Suppose A is a carpenter thrown out of work because there are
more carpenters than are required to turn out the current supply of
chairs and tables at a profitable price; the Salvation Army takes A in
hand, and provides him with capital upon which no interest need be paid.
A's chairs, now thrown on the market, can undersell the chairs provided
by B, C, D, his former trade competitors. Unless we suppose an increased
demand for chairs, the result is that A's chairs displace those of B in
the market, and B is thrown out of employment. Thus A, assisted by the
Salvation Army, has simply taken B's work. If the Salvation Army now
takes B in hand, it can engage him in useful work on condition that he
takes away the work of C. If match-makers are thrown out of work by
trade conditions, and the Salvation Army places them in a factory, and
sells in the open market the matches which they make, the public which
buys these matches abstains from buying the matches made by other firms,
and these firms are thus prevented from employing as much labour as they
would otherwise have done. No net increase of employment is caused by
this action of the Salvation Army, and therefore they have done nothing
towards the solution of the unemployed problem. They have provided
employment for certain known persons at the expense of throwing out of
employment certain other unknown persons. Since those who are thrown out
of work in the labour market are, on the average, inferior in character
and industry to those who are kept in work, the effect of the Salvation
Army policy is to substitute inferior for superior workers. The blind
philanthropist may perhaps be excused for not seeing beyond his nose,
and for ignoring "unseen" in favour of "seen" results. But General Booth
was advised of the sound economic conditions of his experiment, and
seemed to recognize the value of the advice. The defence of his action
sometimes takes the form of a denial that the Salvation Army undersells
outside produce in the market. Salvation matches are sold, it is said,
rather above than below the ordinary price of matches. If this be true,
it affords no answer to the objection raised above. The Salvation
matches are bought by persons who would have bought other matches if
they had not bought these, and if they choose to pay 3d. for Salvation
matches instead of 2½d. for others, the effect of this action is still
to take away employment from the 2½d. firm and give it to the Salvation
firm. Indeed, it might be urged that a larger amount of unemployment is
caused in this case, for persons who now pay 3d. for matches which they
formerly bought for 2½d., will diminish their expenditure upon other
commodities, and the result will be to diminish employment in those
industries engaged in supplying these commodities. Here is another
"unseen" result of fallacious philanthropy.
The inevitable result of the Salvation Army placing goods in the open
market is to increase the supply relatively to the demand; in order that
the larger supply may be sold prices must fall, and it makes no
difference whether or no the Salvation Army takes the lead in reducing
the price. If the fall of price enables the whole of the increased
supply to be taken off at the lower price, then an increase of
employment has been obtained in this trade, though, in this case, it
should be remembered that in all probability the lower level of prices
means a reduction of wages in the outside labour market. If the
increased supply is not taken off at the lower prices, then the
Salvation goods can only be sold on condition that some others remain
unsold, employment of Salvationists thus displacing employment of other
workers. The roundabout nature of much of this competition does not
impair one whit the inevitability of this result.
This objection is applicable not only to the method of the Salvation
Army, but to many other industrial experiments conducted on a
philanthropic basis. Directly or indirectly bounty-fed labour is brought
into competition with self-supporting labour to the detriment of the
latter. It is sometimes sought to evade the difficulty by confining the
produce which the assisted labour puts upon the open market to classes
of articles which are not for the most part produced in this country,
but which are largely imported from abroad. It is urged that although
shoes and furniture and matches ought not to be produced by assisted
labour for the outside market, it is permissible for an agricultural
colony to replace by home products the large imports in the shape of
cheese, fruit, bacon, poultry, etc., which we now receive from abroad.
Those who maintain this position commonly fail to take into
consideration the exports which go out from this country to pay for
these imports. If this export trade is diminished the trades engaged in
manufacturing the exported goods will suffer, and labour employed in
these trades may be thrown out of employment. This objection may be met
by showing that the goods formerly exported, or an equivalent quantity
of other goods, will be demanded for the increased consumption of the
labourers in the agricultural colony. This is a valid answer if the home
consumption rises sufficiently to absorb the goods formerly exported to
pay for agricultural imports. But even where this just balance is
maintained, allowance must be made for some disturbance of established
trades owing to the fact that the new demand created at home will
probably be for different classes of articles from those which formed
the exports now displaced. The safest use of assisted labour, where the
products are designed for the open market, is in the production of
articles for which there is a steadily growing demand within this
country. Even in this case the utmost care should be exercised to
prevent the products of assisted labour from so depressing prices as to
injure the wages of outside labour engaged in similar productions.
Since the existence of an unemployed class who are unemployed because
they are unable, not because they are unwilling, to get work, is proof
of an insufficiency of employment, it is apparent that nothing is of
real assistance which does not increase the net amount of employment.
Since the amount of employment is determined by, and varies with, the
consumption of the community, the only sure method of increasing the
amount of employment is by raising the standard of consumption for the
community. Where, as is common in times of trade depression,
unemployment of labour is attended by unemployment of capital, this
joint excess of the two requisites of production is only to be explained
by the low standard of consumption of the community. Since the working-
classes form a vast majority of the community, and their standard of
consumption is low compared with that of the upper classes, it is to a
progressive standard of comfort among the workers that we must look for
a guarantee of increasing employment. It may be urged that the luxurious
expenditure of the rich provides as much employment as the more
necessary expenditure of the poor. But, setting aside all considerations
of the inutility or noxious character of luxury, there is one vital
difference between the employment afforded in the two cases. The demand
for luxuries is essentially capricious and irregular, and this
irregularity must always be reflected in the employment of the trades
which supply them. On the other hand, a general rise in the standard of
comfort of the workers creates an increased demand of a steady and
habitual kind, the new elements of consumption belonging to the order of
necessaries or primary comforts become ingrained in the habits of large
classes of consumers, and the employment they afford is regular and
reliable. When this simple principle is once clearly grasped by social
reformers, it will enable them to see that the only effective remedy for
unemployment lies in a general policy of social and economic reform,
which aims at placing a larger and larger proportion of the "consuming
power" of the community in the hands of those who, having received it as
the earnings of their effort, will learn to use it in building up a
higher standard of wholesome consumption.