Labor Questions ca. 1922–Have we answered them?

In the Annals of America Volume 14, I read a piece by Kirby Page entitled Labor Policies of the United States Steel Corporation. In this article originally published in the Atlantic Monthly, Page adresses the disparity between the pay for laborers and the profit for the company. Although he doesn’t address the risk factor that the capitalist accepts, he asks some very important questions in his conclusion.

1. Should labor be regarded as a commodity to be purchased at the lowest possible rate, or should the cost of maintaining a decent and comfortable standard of life be used as the basis of determining the lowest rates of wages.

2. What are the costs to society of driving mothers and children under sixteen into industry because of the inadequacy of the father’s wage?

3. Is invested capital ethically entitled (the Chairman of the Board of Directors of USSC used that specific word) to an annual return of 13 percent, or even ten percent, if this involves the payment of inadequate wages to unskilled workers?

4. What should be our attitude toward overcapitalization, the “watering” of stock, and the concealing of profits?

5. What should be our attitude toward employers who hold in their hands an enormous concentration of economic power, and who refuse to bargain collectively with their workers through representatives of the workers’ own choice?

 

Discuss among yourselves…I will give my opinion as the comments role in.

3 Replies to “Labor Questions ca. 1922–Have we answered them?”

  1. This is a classic issue that people have thought about over the centuries. Unfortunately, there have been relatively few successful examples of structures and policies besides the corporate model that have proven tolerably efficient.

    And I think it’s worth emphasizing, in the corporate model, “the employers” mentioned in #5 are usually just agents of other workers who own stock in that company. So I think it’s a bit misleading to talk about capital profits and labor wages as going to two separate people. That is, most workers have some sort of retirement savings plan that is comprised of corporate equity holdings, so it’s not like workers as a class don’t benefit from higher coporate profits….

  2. Robert,

    Thanks for contributing. In your opinion, what is the best way of assuring that workers receive a living wage? I don’t think that manditory wage levels are the answer, but it seems that when there is an over-abundance of labor there exists the opportunity to drive wages so low that workers are unable to provide for themselves and family. I know the assumption is that “in the long run” the market will correct, but what can be done, in the corporate model, until that situation changes?

    BTW all the questions were directly quoted questions posed in the article. As for your point re: #5 I agree that there is much more stock option for employees in this day.

  3. Hmm, I thought I posted a response, but I guess it didn’t work. In short, I don’t have any good answer to your question, I think it’s a good one. One point is that I think it’s important to view from a global perspective, or at least consider globab consequences. If we become more protectionist in the US, it may (or may not) help US workers, but it will most likely hurt global workers. This adds another layer to your question: are you asking about a US living wage or a global living wage, b/c the standards are very different in the 3rd world countries. So is Gap helping or hurting the world economy by hiring 3rd world workers for what is considered sub-US living standards?

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