THIS DOCUMENT IS THE PROPERTY OP HIS BRITANNIC MAJESTY'S. GOVERNMENT.'
PRESENT TENDENCY OF WAGES.
Memorandum by t h e M i n i s t e r of Labour.
SORBET.
In a memorandum t o t h e Cabinet d a t e d May 7 t h , 192Q,(££
633.
I o u t l i n e d t h e wages p o s i t i o n a t t h a t d a t e and p o i n t e d
out t h a t wages were s t i l l g e n e r a l l y i n c r e a s i n g ;
The memorandum
s t a t e d t h a t t h e y would p r o b a b l y go on l n e r e a s i n g u n t i l
prioes
reaohed a p o i n t a t which t h e consumer would go w i t h o u t
rather
t h a n pay and u n t i l a f i n a n c i a l r e a o t i o n s e t i n .
a s i s common knowledge, has o o o u r r e d .
This r e a c t i o n ,
P r i o e s hays roaohod a
l e v e l i n many o a s e s a t which consumers r e f u s e t o buy, and i n
consequence of l i q u i d a t i o n of accumulated s t o o k s , of r e d u c t i o n s
i n p r i c e s of imported raw m a t e r i a l s and of o t h e r c a u s e s , the
g e n e r a l p r i o e l e v e l has a l r e a d y begun t o f a l l .
l a s t summer, b e g i n n i n g w i t h g r a i n and c o t t o n .
The f a l l
started
The immediate
r e s u l t haa been t h a t b u y e r s have h e l d off u n t i l t h e ooBt of
manufactured a r t i c l e s should r e f l e o t t h e f a l l i n p r l o e of raw
materials;
o o n t r a o t s have been c a n c e l l e d ; s h i p p i n g
freights
have f a l l e n r a p i d l y , and m a n u f a c t u r e r s have been a f r a i d
manufacture f o r s t o o k on a f a l l i n g m a r k e t .
to
The consequence has
been a c o n s i d e r a b l e volume of unemployment;, whloh w i l l be
r Q l i e ^ o d p a r t i a l l y when s t o o k s have been d i s p o s e d of and more
f u l l y when a lower p r i c e l e v e l i s r e a o h e d .
The movement i n r e t a i l p r i o e a i s shown by t h e i n d e x
number p u b l i s h e d i n t h e Labour G a z e t t e .
T h i s number s t o o d a t
' 155 a t t h e b e g i n n i n g of August, r o s e t o 176 i n November,
last
month f e l l t o 165, and t h i s month has f a l l e n f u r t h e r t o 1 5 1 .
fThe
, f i g u r e s i n c l u d e r e n t and r a t e s , whioh a r e
increasing^/
The e f f e c t on wages of t h i s s i t u a t i o n i s v e r y
dear.
With minor e x c e p t i o n s no f u r t h e r i n c r e a s e s a r e b e i n g g i v e n ;
g e n e r a l r e d u c t i o n s a f f e o t i n g t h e whole t r a d e have been made
In a law i n d u s t r i e s and Individual r e d u c t i o n s I n . a muoh l a r g e r
number of i s o l a t e d I n s t a n c e s , while further reductions of wages
are foreshadowed.
Reductions In wages of t h i s oharaoter have been
unknown i n t h i s country s i n c e the beginning of the war,
and the i n d u s t r i a l p o s i t i o n w i l l f o r t h i s reason be
d i f f i c u l t f o r some t i m e ,
The d i f f i c u l t i e s w i l l not be
made easier, by the f a c t that t h e reduction of wholesale
p r i c e s i s o u t s t r i p p i n g tho reduotion l a r e t a i l p r i c e s
and many employers w i l l plead t h a t t h e i r f a c t o r i e s
oannot afford present wages, w h i l e the workers w i l l
r e p l y that they oannot very w e l l l i v e on l e s s .
A
s i m i l a r s i t u a t i o n e x i s t s i n other c o u n t r i e s and i n America
heavy reductions of wages have already taken p l a o e .
The p o s i t i o n can be seen i n some d e t a i l as
follows:­
( l ) The Post of Living Group.
There i s a number of
t r a d e s whose wages are r e g u l a t e d d i r e o t l y by the r i s e or
f a l l of the Ministry of Labour's Index number of t h e ooot
of l i v i n g .
These are the Woollen Trade i n Yorkshire, the
Railway S e r v i o e , P o l i o e S e r v i c e , O i v i l S e r v i c e , the P r i n t ­
i n g , Bleaching and Dyeing trade and a number of minor
Industries.
In t h e s e c a s e s wages have a u t o m a t i c a l l y oome
down or are l i k e l y soon t o come down i n sympathy w i t h the
f a l l i n the index number.
(E) Trades whioh f e e l a c u t e l y the present slump.
In the Tinplate i n d u s t r y l a South Wales very high p r i c e s
and very h i g h wages were, u n t i l r e c e n t l y ,
obtained.
L a t t e r l y the demand has f a l l e n off so suddenly t h a t wages
have been r e a d j u s t e d on the b a s i s of a s l i d i n g s c a l e
f o l l o w i n g t h e p r i c e of s t e e l , and s u b s t a n t i a l reductions
of wages have r e s u l t e d .
In t h e Non-Ferrous Mining rndustry
in a number of oases the mines have a c t u a l l y olosod down,
and in o t h e r s , notably i n the t i n m i n e s - i n Cornwall, a
reduction in wages of about 10$ has ooourred.
In the
Hosiery Trade i n Scotland a reduotion of 15$ has been
enforced.
In a number of I n d u s t r i e s , notably Cotton and
other T e x t i l e s , F l o u r - M i l l i n g , l e a t h e r and B o o t s , s h o r t ­
time I s being worked on aooount of t h e f a l l i n g o f f
in demand r e s u l t i n g i n part a t any r a t e from tho high
p r i c e n e c e s s i t a t e d by t h e high ffost of produotion and
a l s o of course from the a i f f i o u l t i e e i n f o r e i g n trade
caused by the uncertain movements of r a t e s of exchange'
(3) Other important t r a d e s .
In t h e I n g i n e e r i n g
Trade a demand of the Trade Unions f o r an i n c r e a s e of
6d an hour has been postponed.
The wages of men have
boen s t a b i l i s e d f o r a period of 6 months, but wages of
women have been g e n e r a l l y reduced from t h e standards s e t
up by t h e Ministry of Munitions during the war t o a
somewhat lower standard agreed by Trade Boards operating
i n t h e manufactured metal t r a d e s .
In the Shipbuilding
Trade a s i m i l a r demand f o r an i n c r e a s e of 6d a week has
been n e g a t i v e d .
In the B u i l d i n g Trade t h e r e s r e
abundant s i g n s t h a t the c o s t of b u i l d i n g i s so h i g h as t o
impede extended b u i l d i n g work.
The Trade Unions have
tabled demands f o r e t l l l f u r t h e r i n c r e a s e s of wages, but
i t i s u n l i k e l y t h a t t h e s e w i l l be oonoaded and r e d u c t i o n s
may be attempted beforo l o n g .
The wages of labourers i n
tradeB bordering on t h e B u i l d i n g Trade, such as road and
Bewer work and n a v v i e s
1
work g e n e r a l l y , have been reduced
i n a number of eases from t h e p r e s e n t Building Labourers'
rate of E / l d , an hour t o r a t e s of l / l l d . and l / 9 d . an
hour*
In g e n e r a l , employers have shown a muoh more
determined o p p o s i t i o n t o inoreases of wages.
In the
Shipbuilding Industry a stubborn s t r i k e has been going on
sinoe the beginning of Deoember due t o t h e a o t i o n of the
Shipbuilding employers in withdrawing an increase of wages
of 1 2 / - a week given l a s t April t o Ships Joiners t o
deter them from migrating to the Building Trade.
Jra&e Board Trades.
Even i n Trade Board trades,
where i n theory the s t a t u t o r y Trade Board r a t e s are
minimum (and not a c t u a l ) r a t e s . designed t o prevent
sweating, there i s a number of i n s t a n c e s i n which demamds
for i n c r e a s e s of wages have been postponed w i t h t h e
aequiesoenoe of the workers
1
representatives, while in
some c a s e s tho employers of the Trade Boards are making
proposals f o r r e d u c t i o n s .
In the case of the Jute Trade
Board, the employers have s t a t e d that t h e y are unable t o
pay even the minimum r a t e f i x e d by the Trade Board.
The
wages f i x e d by tho A g r i c u l t u r a l Wages Board and Committees
are now said by t h e employers t o be g e n e r a l l y too high,
p r i n c i p a l l y due t o the f a c t t h a t Imported wheat oan be
s o l d i n t h i s country at a p r i c e below t h a t at which i t
is
p o s s i b l e t o grow i t h e r e .
(5) Women s Wages.
Wages of women are being
T
a f f e c t e d by the present d e p r e s s i o n .
Reference has already
been made t o the Engineering Trade, and there i s a
tendency l a many trades f o r wages t o be reduoed t o a
standard such as the minimum r a t e s f i x e d by Trade Boards*
(6) As may be supposed, the p r i c e of f u e l has an
important bearing on the prioe l e v e l .
of c o a l has f a l l e n h e a v i l y .
Jhe export prioe
The gains which t h i s
oountry was making in t h i s r e s p e c t have provided a fund
which i n part has gone t o pay increased wages of miners,
but t h i s fund i s now disappearing.
M
A M
The home p r i c e of
c o a l i s i n a d e q u a t e i o r t h e p r e s e n t o o s t s of p r o d u c t i o n .
The Government w i l l s h o r t l y d e - o c n t r c l t h e mines and
t h e c o a l owners and t h e miners a r e d i s c u s s i n g the wages
q u e s t i o n i n t h e l i g h t of t h e p r i c e of c o a l b o t h f o r home
and f o r e x p o r t .
As a r e s u l t of t h e s e t t l e m e n t of t h e
c o a l s t r i k e a b i g i n c r e a s e i n t h e output of c o a l
o c c u r r e d , and t h e output f o r December j u s t i f i e d an
i n c r e a s e i n wages of 3/6d p e r s h i f t .
Since t h e making
up of t h o s e f i g u r e s t h e demand f o r o o a l h a s d e c r e a s e d
and t h e r e w i l l be a consequent f a l l i n wages of 2 / ­
per s h i f t .
It i s obvious t h a t t h o wagos n e g o t i a t i o n s
t h e c o a l mining i n d u s t r y w i l l be d i f f i c u l t
in
but i t i s also
c l e a r t h a t a d e o r e a s e i n t h e p r i c e of c o a l would be of
great benefit to Industry generally.
(7) i s i n d i c a t e d i n t h e p r e v i o u s memorandum, t h e
p o l i o y of l e a v i n g t h e s e t t l e m e n t of wages and c o n d i t i o n s
of employment t o n e g o t i a t i o n s between Employers and
Trade Unions has been o o n t i n u c d , and i t i s c l e a r t h a t
i t has been i n t h o b e s t i n t e r e s t s of t h o c o u n t r y .
The
g e n e r a l p r a c t i c e of t h e M i n i s t r y of l a b o u r i s n o t t o
i n t e r v e n e i n d i s p u t o s about wages u n t i l a l l
available
machinery f o r s e t t l e m e n t by an i n d u s t r y i t s e l f has been
exhausted.
When a d i s p u t e cannot be s e t t l e d by t h e s e
methods a v o l u n t a r y r e f e r e n c e t o a s t a n d i n g Court of
A r b i t r a t i o n , v i z . , t h e I n d u s t r i a l C o u r t , can be a r r a n g e d .
The Wages (Temporary R e g u l a t i o n ) A c t , by which wages were
maintained at the l e v e l obtaining at the a r m i s t i c e ,
lapsed
i n September l a s t and i t was n o t renewed i n s p i t e of some .
p r e s s u r e from Trade Union q u a r t e r s s i n c e i t was t h o u g h t
t h a t t h e time had come when Government i n t e r v e n t i o n
in
wages m a t t e r s should o e a s e except of c o u r s e i n t r a d e s
M
5"
whore organisation i s bad and whore r a t e s of wages are
unduly low.
Joint o r g a n i s a t i o n of industry has made oon­
siderable progress.
Before the war t h e r e were roughly
4 m i l l i o n Trade Unionists and there are now nearly 8
million.
On the v/hole the Joint I n d u s t r i a l Councils and
other s i m i l a r j o i n t bodies are working w e l l .
There are
not.-many oases oi tfeduotions of wages brdughfc about without
o o n s u l t a t i o n between both s i d e s ;
the a t t i t u d e of Joint
I n d u s t r i a l Councils and oth^r s i m i l a r bodies t o t h i s matter
i n d i c a t e s that the i n e v i t a b l e reductions w i l l be carried out
only a f t e r f u l l c o n s i d e r a t i o n and without avoidable hardship.
I t may be t h a t , i n view of the e f f e o t of wages
r a t e s on employment, the workers w i l l r e a l i s e t h a t the matter
upon whioh they should concentrate i s not so much the
maintenance of the present l e v e l of monoy wages as the
establishment of methods of BO a d j u s t i n g money wages as
t o oeoure a high l e v e l of r e a l wages, and i t Is to be
hoped that employers and employed w i l l explore t h i s
question.
It i s , of oourse, bound up with the question
of increased output por u n i t , a matter t o which publio
a t t e n t i o n has been c a l l e d repeatedly in recent months.
(Signod) T. J. MACNAMARA.
MINISTRY OF LABOUR,
25th February, 1921,