1920s >> 1925 >> no-255-november-1925

Fifty years of “Progress”! The economic position of the workers

We have been asked to make a comparison between the present economic position of the working class and their position fifty years ago. Many considerations besides that of space compel us to confine the com¬parison within fairly narrow limits, and the complexity of the subject, added to the difficulty of obtaining sufficient authoritative statistics, makes it inevitable that the treatment shall be inadequate in many directions for more than a rough approximation to the actual facts. We shall be concerned mainly with the position of workers in this country except where light can be thrown on the general tendencies of advanced capitalism by bringing in illustrations from countries other than Great Britain. It will be desirable at the outset to indicate the numerous difficulties in the way of a full presentation. Statistics are necessarily incomplete even where they do exist, while large parts of our subject are not covered by reliable figures at all. Apart from this it is by no means easy to find even a satisfactory basis of comparison.

WHAT YOUR WAGES WILL BUY.

Mere changes in money wages mean little indeed. Correction must be made for changing prices, for increases or decreases in hours of work and holidays, for changing customs as to payment for wet weather and for “walking time,” and as to special bonuses like “harvest money” and allowances in kind, and above all, for the increasing intensity of work. It is plainly not sufficient to say that the American workers get higher real wages than those in Europe, unless allowance is made for the fact that the former have often to work much harder than the latter.

We have to allow also for the effect of increasing unemployment on the worker’s standard of living; the hourly rate of wages may show a marked increase, which is, however, more than offset by a reduction in the time of work owing to unemployment. Again, the habits prevalent in 1870 differ considerably from those of 1925. Foods, clothing, recreations have all altered, travelling expenses have to be added to the budget of most wage earners, deductions for health and unemployment insurance need to be reckoned; these and innumerable other favourable or unfavourable changes, some small and some great, have all to be taken into account in any comparison between one period and another nearly two generations later.

DIFFERENT STANDARDS OF COMPARISON.

There is a further cause of confusion which has to be kept clearly in mind. This has to do with the object of the comparison and the deliberate choice of factors on which to base it. We can say, for instance, that the workers in 1925 are able to purchase with their wages smaller quantities of food, clothing, etc., than they could in 1920, and that they are therefore worse off. This is one way of making a comparison, or we could say that out of the total wealth produced in one year the workers received a smaller proportion than in some previous year. Again, in this instance, we should be correct in describing the workers as worse off, but it should be noted that this means something essentially different from the first statement. It might take place in spite of the fact that real wages were rising; it is a comparison of the position of the workers with that of the non-workers.

Thirdly, we might introduce into our enquiry the development of the powers of production in a somewhat different way. It is, for instance, undeniable that our powers of production in 1925 are enormously greater than in 1875, yet pauperism due to unemployment has also grown. The productive powers are in fact not being used owing to the defective organisation which accompanies capitalism. Here, again, and in a third distinct sense, it could be said that the workers were worse off because of their greater degradation and dependence on the propertied class.

As we are to take as our starting point the years between 1870 and 1880, let us first consider what was the position then.

THE POSITION IN 1870.

It just happens that about that year the workers in this country were in a comparatively favourable situation. From 1846 to 1873 there was a phenomenal expansion of production and of foreign trade. Although prices were rising, the demand for labour caused wages to rise even faster. British exports which in 1855-59 averaged only £116,000,000, had by 1873 risen to £266,000,000; and between those dates the improvement in the worker’s standard of living was considerable, and more or less continuous. (See A. L. Bowley, appendix to “Dictionary of Political Economy,” p. 801). Sir William Beveridge (“Economic Journal,” December, 1923), estimates the increase in “real” wages in the ten years preceding 1870 to be no less than 12 per cent.

At the same time unemployment was at a very low level. While the ten-yearly average of unemployment among trade unionists was 5.2 from 1851 to 1870, the average for the next decade fell to 3.8, while in 1872 it was only .9 per cent., which is the lowest point it touched during the century (Bowley Elementary Manual of Statistics, p. 156).

On the other hand, the number of persons in receipt of poor-law relief averaged 31 per 1,000 for the years 1871-1879, a high level not reached again until quite recently (The Poor Laws : J. J. Clarke, p. 139.)

There is therefore no reasonable ground to doubt that, on the whole, the workers were much better off in 1870 than they had been during the prolonged depression after 1815 or in the ‘forties.

THE MOVEMENT OF WAGES BETWEEN 1870 AND 1900.

In 1873 a great change came over the scene. Trade depression set in, prices fell, business failures mounted rapidly and unemployment rose continuously year by year until in 1879 it reached 11.4 per cent. It declined to 2.3 per cent. in 1882, rose again to 10.2 per cent. in 1886, and averaged 5.6 per cent. during the ‘eighties, and 4.4 per cent. during the ‘nineties (Bowley : Manual, p. 156). Although prices were, with slight fluctuations, falling from 1873 right up to 1897, wages fell too, owing to the pressure of unemployment. Nevertheless, those workers who had more or less regular em¬ployment (after a period of 6 years to 1879 during which “real” wages were nearly stationary), again enjoyed a long period of general improvement which lasted to 1900 (“Manual,” 148).

Sir William Beveridge (Economic Journal, December, 1923) estimates the percentage increase of “real” wages over the thirty years from 1870 to 1900 at approximately 50 per cent. From 1897 the downward movement of prices was reversed, and factors causing prices to rise have been continuous right up to date. During the war years and immediately afterwards, abnormal conditions led to a great acceleration of the upward movement, but while these conditions have now practically ceased to operate, the more permanent movement has continued, and presumably would have had its effect had there been no war. Wages, as is usual during such periods, did not keep pace with prices. Bowley considers that the purchasing power of wages was declining from 1900-1910, and possibly stationary from 1910 to the outbreak of war. Sir William Beveridge estimates “real” wages to have been at best stationary over the period. According to the Board of Trade “Report on Changes in Rates of Wages, etc.” (1913, Cd. 7080) prices rose by 13.7 per cent. from 1905 to 1912, whereas wages rose only between 2 per cent. and 5½ per cent. Leaving aside the period of the war when other complicated factors make comparison still more difficult, we come to the present year. It is worth while noting here that it is habitual to compare the position now with what it was in 1914. Thus, the International Labour Office (see Ministry of Labour Gazette, June, 1925, p. 217) de.0scribes the present “real” wages of the British worker as being just a shade (1 per cent.) better than in 1914. This, however, obscures the important fact that wages in 1914 were at a level reached after 14 years more or less steady decline. A comparison with 1900 would give an opposite and materially different result.

Sir Leo Chiozza Money (People’s Year Book, 1924) writes as follows :—

“In the middle of 1923 it is probably true that a considerable proportion of wage earners are earning less, money’s worth for money’s worth, than they did in 1913.”

This guarded statement serves to correct the optimism of the International Labour Office, for they found that “real” wages have not risen but have slightly fallen since 1923.

UNEMPLOYMENT SINCE 1900.

The degree of unemployment is sufficiently illustrated by the following yearly average percentages among trade unionists. The years selected are the series of highest and lowest years from 1900—

1900 2.5 per cent.
1904 6.0
1906 3.6
1908 7.8
1913 2.1
1914 3.3
1916 0.4
1922 15.4

At present the percentage is about 11. Since 1920 the degree of unemployment has been greater than at any time before the war, and the depression has lingered without any signs of lifting ; as has been candidly admitted by Dr. Macnamara, M.P. (“The Times,” September 11th, 1923) the permanent unemployed army in this country can be anticipated to remain at a level

“three or four times as big as in pre-war times. … In those days … in times of trade prosperity, there were always, at best, round about 200,000 persons out of regular employment. ”

The effect of this unemployment on the workers’ standard of living must not be overlooked. As was pointed out above, it is one thing to say that the rate of wages in 1925 for an employed man is equal to that in 1914; it is quite another thing to say that the workers as a whole receive during a year a “real” wage as large as before. If the loss of time due to unemployment is equal to three months each year, then the “rate” of wages requires to be reduced by 25 per cent. to show the real position. A useful attempt in this direction has been made by the Labour Research Department (L.R.D. Monthly Circular, October, 1925. Their conclusions are published in pamphlet form.)

THE POSITION IN 1925.

By combining the yearly figures of rates of wages with the percentages of unemploy¬ment, and making a correction on account of the movement of retail prices of food (full cost of living figures are unobtainable for pre-war years) a result is obtained which shows approximately what “real” wages were worth from year to year after allowing for loss of time through unemployment. The table is given in full for the 23 years to 1923, accepting 1900 as a base year represented by 100 :—

1900 100 1908 89.8 1916 69.9
1901 97.8 1909 88.2 1917 62.0
1902 95.3 1910 88.2 1918 78.2
1903 92.5 1911 91.8 1919 93.2
1904 91.3 1912 89.7 1920 92.4
1905 92.1 1913 93.1 1921 94.6
1906 95.7 1914 90.7 1922 81.2
1907 95.1 1915 82.1 1923 81.3

It will be seen from this that the decline over the period of a quarter of a century to this year is nearly 20 per cent. There is, of course, one other small factor to be allowed for in recent years, that is, the effect of unemployment insurance. According to the L.R. Dept., however, the total amount paid out between November, 1920, and June, 1922 (less the workers’ own contributions) averaged less than 1/2 per week for insured persons.

THE GROWTH OF PAUPERISM.

The result of lower “real” wages and greater unemployment is a striking increase in pauperism. Unable to accumulate savings the worker is forced to go to the Poor Law authorities for meagre protection against one of the effects of capitalist owner¬ ship and production.

The number and percentage (in relation to growing population) had been declining from 1870 to about 1890, but an increase then began. According to the 12th Abstract of Labour Statistics (Board of Trade)—

“On every day throughout the year 1892 the average number of persons in receipt of Poor Relief was 953,719, this number rising steadily each year with but slight fluctuations to 1,103,724 in 1906, being an increase not only in the number but also relatively to the increase of population.”

It was this state of affairs which led Mr. Lloyd George to assert in a speech in Park Hail, Cardiff (December 29th, 1911), that

“To-day you have greater poverty in the aggregate in the land than you have ever had. . . . You have a more severe economic bondage than you probably ever had . . . that condition of things was foreign to the barbaric regime of the darker ages.”

Yet, despite the Old Age Pension scheme designed by Mr. George with the object of relieving the pressure on the Poor Law institutions and finances, it was not until the exceptional conditions of the war that the number of persons relieved (which was 694,036 in 1883) fell below 600,000. At June 30th, 1921, the number was 1,299,086, and in 1922 1,769,387, representing more than 45 per 1,000 of the population, as against 31 between 1871 and 1879.

“In October (1921) returns show the highest number of persons dependent on Poor Law relief since records were kept, namely, a period of 72 years. . . . The growth of expenditure . . . reaching in 1920 by far the highest level in our history. —(“British Trades Union Review,” January, 1922.)

In August, 1925, the number was 41 per 1,000 (see Ministry of Health Quarterly Report on Poor Law Relief).

(To be continued.)

H.

(Socialist Standard, November 1925)

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