The Six-Hour Day and Other Industrial Questions

Lord Leverhulme, Stanley Unwin

• Publisher: Routledge
• Year: 2017
• Print ISBN: 9780415789868
• eBook ISBN: 9781351819268
• Topic: Commerce
• Subtopic: Commerce Général

In this title, first published in 1918, Lord Leverhulme explores the ideas of co-partnership, piece-work, housing, and the benefits of shorter hours of labour. The most notable of these discussions, collected by Stanley Unwin, with a Preface by Lord Haldane, advocates a six-hour day, with two shifts, in all industries in which the overhead charges are equal to or larger than the cost of weekly wages. Lord Leverhulme's view is that the employees work better in a short working day and might produce as much in six hours as in eight hours, and that in any case the machinery could be utilized more profitably by running for the double shift of twelve hours than for the single shift of eight hours. This seminal work will be of interest to students of business studies and human resource management.

SOME INDUSTRIAL QUESTIONS

I

INDUSTRIAL ADMINISTRATION

LIVERPOOL, November 8, 1916.

[Having spoken so often, and out of such long and successful experience, on the subject of Co-Partnership, Lord Leverhulme devoted the speech here presented to those basic principles of industrial administration which cannot be ignored, even under the most harmonious scheme, without entailing serious limitations to the expansion of industries and actual curtailment of both wages and profits. Incidentally, he grappled with the great Trade Union question of “restriction of output.” His audience was the Liverpool Social Problem Circle.]

THE answer to the question, “What is the employer’s position at the present time?” depends, like the answer to so many other questions, upon the point of view that this position is regarded from. You will remember the story of the painter who was explaining to his sitter for a portrait that he could only paint his portrait as he saw the sitter, to which the sitter promptly replied, “But, unfortunately, I can only see my portrait as you paint it.” However, I may, perhaps, better answer the question by adopting the answer given to the question, “Is life worth living?”—the answer to which was, you will remember, that “It all depends upon the liver.” If the employer’s liver is out of order he is apt to take the view that “the times are out of joint”; and it is not impossible, under similar circumstances, that the workman, even when working in good conditions of employment, might, if he was told, as was the Irishman, that he could not do too much for a good master, give the answer, “No more will I.” However, we shall all agree that to-day it were wise if both employer and employee examined their relationships in the past and looked well ahead into the future.

And the first point in the near future that will present itself to both will be the consideration of after-war conditions. The experience gained by both employer and employee during this war makes it impossible for either to resume work after the war with conditions quite the same as they were when the war broke out. For one thing alone, the war has added nearly one and a half millions of income-tax payers to the previous number who came within the net of the Chancellor of the Exchequer, which of itself is a revolution. This increase in numbers is not only the natural effect of lowering the limit of exemption, but mainly, as far as is ascertainable at present, from actual increases in wages and salary. This is a grand fact and, if the employer can take a far-sighted view, is an immense gain to the strength of industrial production.

Statistics of incomes and income-tax payers, when carefully examined, reveal this great truth, that to bring a larger body of wage-earners within the scope of the income-tax collector has the undoubted tendency to increase the efforts of each to earn a larger income out of which to pay the tax. Equally, every raising of the rate at which income tax is levied has been followed by increased efforts, successfully made, to increase incomes out of which to pay the increased tax. Therefore the effect of placing one and a half million additional income-tax payers on this higher platform has been to place an increased number of employers and employees side by side as income-tax payers, and give them one common object to strive for, viz. to maintain and to increase incomes. We are all inclined to say, with the Irishman, “Be jabers to the tax, if you will give me the income,” and having got the income, we are all inclined to make increased efforts to make the income sufficiently large to stand the contribution demanded by the Chancellor of the Exchequer, in the form of income tax, without diminishing the balance remaining for the income earner.

To ensure the highest degree of efficiency in plant, machinery, and all the mechanical utilities required for production and distribution, the employer requires good profits; and, equally, to ensure the highest degree of efficiency for employees, high wages and reasonable hours of employment are necessary. Good profits for the employer enable the prompt scrapping of old plant and machinery, and the installation of better equipment, to be successfully accomplished. Equally, high wages and reasonable hours for the employee react in increasing the physical and mental tone and efficiency of the worker. Therefore, the tendency of modern conditions is to bring the interests of employers and employees nearer and nearer together, if these interests are rightly understood, but not otherwise.

And what are the problems to be faced? The biggest problem the employer has to face, and one that is always present with him, is to surround himself with a permanent efficient staff, happy and contented in their employment, who will not only work for him, but, what is much more valuable, will work with him. I knew a manufacturer in America, a very successful man, who was once asked which he would prefer—a fire that burnt out his factory, his buildings, machinery, and plant to total extinction, or some plague or epidemic that killed off all his staff. There was no hesitation in the answer, which was prompt and quick, that he would prefer the fire; because he could sooner replace the factory, buildings, machinery, and plant than he could get together another staff; besides, with his staff remaining to him, he declared, he could worry through all right without the factory, the plant, and machinery, until he got the same replaced. And the reason for this preference is obvious. An efficient staff is a staff trained to their duties, and this training depends upon constant repetition in performance of the same duties, and in solving the same problems of the business. Repetition is the basis of efficiency, which can only be achieved as the result of long service. Therefore, one of the principal objects of the employer must be to attach to himself an efficient staff; but, to ensure this, it is absolutely essential to convince the employee working for salary or wages that the welfare of the employer and employee are identical. We are all agreed that, to ensure ideal conditions and an ideal relationship between employers and employees, employment must be so organized that profits earned shall not only be sufficient to provide good living conditions for the employees, and a reasonable return on the capital invested for the employer, but shall be such as to ensure the advancement of the industry and the contentment and satisfaction of both employers and employees. Mere desire to attach a staff to a particular industry, and to ensure long service, is not sufficient. The solution of this problem can only be found in the actual working conditions themselves, and until these working conditions are acceptable to both employers and employees, neither are yet prepared to surrender their weapons of attack and defence, or to “beat their swords into ploughshares and their spears into pruning-hooks” in order the better to cultivate a larger and richer harvest.

The gulf at present separating employers and employees is very largely a misunderstanding of the conditions affecting each. The employee has an exaggerated idea of the volume of the profits produced under ordinary normal conditions of the industry in which he is engaged. The employer, faced with demands for higher wages and knowing the competition he has to face, is nervous in granting advances for fear his small margin of profit shall be turned into an actual loss. As you know, a minority of employers, myself included, hold very strongly the view that only under a system of actual Co-Partnership can the spirit of greed and fear be eliminated and a just division of profits as between employer and employee be obtained.

But I propose that we devote ourselves to the consideration, not of Profit-Sharing or Co-Partnership, which subject I have dealt with elsewhere as fully as my limited capacity has permitted me, but rather of what, for want of a better name, I propose to call “Industrial Administration,” and of those principles that must be recognized if there are to be any profits available for division. But I would here again repeat that under no scheme of Co-Partnership can the basic principles of industrial administration be ignored without entailing serious injury to employers and employees, and serious limitations to the expansion of industries and actual curtailment of both wages and profits.

Now, what are a few of the principles that, combined, must form and under all circumstances include both the employers’ point of view, viz. good profits, with the employees’ point of view, high wages and reasonable hours? The chief of these basic principles are increased production with consequent reduction of overhead charges and reduced operating costs, combined with shorter hours for workers, resulting in better working conditions, leading to greater efficiency and producing higher wages and better profits. To ensure the attainment of these aims and objects and of these sound economic conditions, and as part of the control of labour, the words “Scientific Management” have been applied. Unfortunately, much that is preached and sometimes practised by this school of employers is neither scientific nor worthy of the name of management. But underlying all the error of this school of thought are some good, sound, wholesome practices. But perhaps a less stilted and less irritating title would be “Industrial Administration.” The supreme spirit of scientific management worthy of that description must be that of administration. “Management” rarely considers the workman other than from the point of view of control, and to thrust the antagonizing spirit of control to the front place, as so-called “Scientific Management” would appear to be doing, is not to make the relations between employers and employees less irritating, but rather the contrary. The whole idea associated with “Management” is that of control, which idea has embalmed itself, and its meaning, in the name “boss.” But workmen have grown and developed much during the last quarter century, and are no longer blindly consenting to be “bossed” or controlled as if they were children. Workmen have become responsible human beings, and claim some just and sane share in the management of their own lives and conditions. The workman to-day claims rights, and does not deny that the exercise of rights will bring with it the responsibility for the performance of duties, and these duties he is willing to undertake. But to show how inapplicable the word “Management” is, it is obvious that you cannot have management of rights nor management of duties. To show the better applicability of the word “Administration,” you can have administration of rights and administration of duties. Therefore, if employers and employees are to be brought to work together, and if all suspicion and distrust, not to say actual and active opposition, are to be abolished, then the idea of “Management” as “bossism” must be surrendered by the employer.

At this point, I think I can read the thoughts of many in the room, who will be wondering whether I am advocating the surrender of all discipline in Industrialism. Nothing of the sort. There must now, and for all time, be authority and law in Industrialism as in the Army, and as in all places where communities have to live and act and work together. Both employer and employee must agree fully and without reserve in this, otherwise Industrialism and the working together of an organized system for production would be impossible, and mankind would degenerate into a mob.

We must have authority and law and due observance of discipline in the factory and workshop as on the steamship, and as for the nation and State. But do not let us confuse ourselves over this essential. The question is, Has the authority to be autocratic? If so, have your management as “boss,” and endeavour to make it as scientific as possible. Or shall the authority be democratic? In that case, let us adopt the description for the authority we must provide that best fits our aims and intentions, viz. administration. You will find that whilst the dictionary gives “control” as one of the meanings of management, that word does not appear as one of the meanings of administration, but the words “to direct,” “to dispense”; and the word “guardian” is given as the meaning of the word “administrator.” These latter all form a good democratic basis, and the necessity for authority, law, discipline, and obedience, under these conditions, is at once admitted, and can be accepted without humiliation or loss of self-respect, when “bossism,” even if called “Scientific Management,” would raise a spirit of opposition founded on the resentment we all feel to that very idea when applied to ourselves.

Scientific Administration we would all welcome as applying to established principles supporting the laws for the working together of hundreds, or thousands, or millions of men and women in productive enterprises for the combined benefit of employers, employees, and of the whole community. Scientific Management is apt to be viewed as entirely designed to increase the profits and advantages of the employer at the expense of the employee, whereas Scientific Administration would be welcomed as merely the science of production in the simplest, easiest way which would secure the highest wages and the greatest prosperity for employers and employees. Scientific Administration can be honestly based on the assumption that the interests of employers and employees are identical, and opposition thereto can only be possible on the assumption of the obvious error that these interests never can be honestly identical.

Scientific administration will make clear that restriction of output is not only immoral for the man who might have made two articles but who only made one, but that he has thus robbed his fellow-man even more wickedly than the thief who had stolen one out of any two articles one of his fellow-men might have made; for whilst, in the case of the robber, there would still be the two articles, and both would be of service, there would be only one article in the case of restriction of output, and the lapse in production could never be made good.

Parliament has intervened to prevent the thraldom of labour by passing Industrial Acts, limiting hours and conditions of labour, fixing rates of wages, providing for employers’ liability for the safety and health of employees, and the employers’ responsibility for accident, ill-health, or death the direct result of employment. And just as Parliament has made these laws for preventing the thraldom of labour, Parliament may also be forced to pass laws to prevent restriction of output as an act of robbery against the common weal, and, as an act of adulteration of service, just as wrong as the adulteration of milk or any article of food or commerce.

Just as attempts by combinations of employers to cheat the public in quality and price have been met, when and where attempted, by laws to prevent the same, so similar attempts by combinations of Labour to cheat their fellow-men by restriction of output must, and can be, prevented by laws directed to that end.

Such a state of affairs, however, need never to arise, and ought never to arise, if the whole position of industrial administration is properly understood.

The employers’ contribution to the world’s progress and betterment is organization of mechanical utilities and machine efficiency, in order to give enormously increased output. Industrial administration, by providing the means for intensive mechanical production by increased steam-power and more efficient plant and machinery, demanding less and less exhaustive strain on the employees, has unlimited opportunity for increased output at reduced cost after paying wages on the highest world’s scale; and this can all be accomplished provided the fallacy of restriction of output is not permitted to spoil the working of these economic principles. Mechanical utilities, mechanical horse-power, and standardization of products are the keystone of the arch of better conditions for employer and, still more so, of better conditions for employee.

High wages cannot be paid without correspondingly increased output by employees. Surely the employees’ point of view must be the amount of wages received, the length of hours worked, and the strain of mind and muscle involved. If opportunity of earning high wages can be assured in a reasonable eight-hour day without strain or exhaustion, then the amount of product need not worry the employee. The employee cannot in his own interest wisely assume an attitude of approval of restriction of output.

Under these conditions, industrial administration scientifically applied will provide that the profits resulting from the enormously increased output are not all to go as dividends on the capital employed, but shall be shared in fair and equitable proportion between both Capital and Labour.

Let us see if practical examples of the effect of a high scale of output with high mechanical horse-power per wage-earner can be given as showing the direct bearing and connection on high wages and shorter hours for the workman. The lowest output and the longest working hours per wage-earner in the world are to be found in China and India; and in these countries there is also the lowest mechanical horse-power per wage-earner and the lowest wages earned per wage earner. The example of the highest of all these will be found in the United States. Let us compare these with the same in the United Kingdom. Mechanical horse-power per wage-earner in China or India is so low as to be negligible. The mechanical horse-power per wage-earner in the United States, as given in Government records of industrial production, is two to three times that of the United Kingdom. The value of the product per wage-earner per year in the United States is also found to be two to three times that of the wage-earner in the United Kingdom. And how do the wages paid per wage-earner compare under these conditions? In India and China the average wages do not exceed, for unskilled labour, 4s. per week, and for skilled labour 6s. per week. The weekly wages in the United Kingdom and the United States for the year 1912, being the latest year available for comparison, are stated to be:—

		U.K.	U.S.A.
Carpenters		£2 0 0	£9 0 0
Foundrymen		£2 1 0	£9 0 0
Builders’ labourers		£1 6 0	£6 0 0
Other skilled labour		£2 0 0	£6 4 0
Other unskilled labour		£1 2 0	£2 11 0

Of course, the rates of wages vary in different parts of the United States, as in various parts of the United Kingdom, and these figures are merely quoted as illustrations, and subject to such variations. Hence, whilst in the United States the mechanical horse-power is two to three times per wage-earner of that per wage-earner in the United Kingdom, and the output is also two to three times of that per wage-earner in the United Kingdom, the wages in the highly skilled trades in the United States are over four times per wage-earner of those paid in the United Kingdom, and in the less skilled trades over three times, and the unskilled labour two to four times that of the same grade of wage-earner in the United Kingdom.

Now let us see if we can find a direct example of reduced output per wage-earner in the United Kingdom as compared with the same industry and increased output in the United States. We can find this example most readily in the statistics relating to coal, and whether this reducti...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• EDITOR’S FOREWORD
• INTRODUCTION BY VISCOUNT HALDANE
• THE SIX-HOUR DAY—
• CO-PARTNERSHIP—
• HOUSING AND SOCIAL WELFARE—
• EDUCATION AND BUSINESS—
• SOME INDUSTRIAL QUESTIONS—
• INDEX