A Study on the Minimum Wage

J. Henry Richardson

• Publisher: Routledge
• Year: 2021
• Print ISBN: 9781032182834
• eBook ISBN: 9781000527865
• Edition: 1
• Topic: Economics
• Subtopic: Economic History
• Index: Economics

First Published in 1927, A Study on the Minimum Wage contains constructive proposals regarding the essential features of a satisfactory minimum wage system. Based on a comprehensive international study of existing legislation and practice in the 1920s, it brings crucial themes like objects of minimum wage legislation; the living wage; provisions for the worker's family; relation between the wages of men and women; machinery for fixing minimum wages; methods of enforcement; and the capacity of industry to pay. Rich in archival resources, this book is an essential read for students and researchers of labour history, labour economics, and political economy in general.

CHAPTER VI

A NATIONAL MINIMUM

THE conclusions reached in the two preceding chapters point to the desirability of a national minimum wage based on national productivity. There is no conflict between the living wage defined in relation to national productivity and the wage which industry in general can pay. In fact, the two conceptions are practically identical, and each leads to a national, or in some cases a regional, basis for fixing minimum wages below which no worker of ordinary ability should fall. Both national productivity and the capacity of industry in general to pay are, however, difficult of determination. The statistics necessary are not available; therefore some indirect method must be adopted provisionally.

In the present chapter wage statistics are considered as throwing light on what industry can bear, thus furnishing a means to determining a practicable minimum. Also the problems are discussed of fixing minimum wages in districts in which the cost of living is unequal, of allowing for changes in the purchasing power of money from one period to another, and of taking into account changes in the capacity of industry.

METHOD OF DETERMINING THE MINIMUM.

Adequate information not being available as to the capacity of industry in general to pay, the best alternative is to secure statistics with regard to prevailing standards of living. Among the data suitable for this purpose are the results of wage censuses.¹ These show what industry in general is actually paying. They also show the relative levels of wages in different industries and districts, and thus enable attention to be directed particularly to cases where conditions are considerably below the generally prevailing standard. Thus the British Wage Census of 1907, by revealing very low wages in certain industries, contributed largely to the adoption of the minimum wage legislation of 1909.

For the purpose of determining a practicable minimum below which wages should not be allowed to fall, information with regard to the wages of unskilled workers in different industries may be taken as guide. By means of a wage census, statistics can be obtained as to the earnings of unskilled adult male and female workers in different industries. The earnings of such workers in the large or well-organised industries may be regarded as standard of comparison. It would evidently be unsatisfactory, however, to take the average wage of unskilled workers in the well-organised industries as the minimum wage. In the well-organised industries themselves the wages of unskilled workers differ considerably from one industry to another, while within each industry wages may vary in the different establishments. The figures given below illustrate the range from one industry to another in the full-time weekly wages of unskilled male workers in Great Britain and Germany, and the average hourly earnings of unskilled male workers in the United States.¹ The number of hours in a full-time week vary somewhat from one industry to another, but the variation is only to a small extent the cause of differences in the wages in different industries. In Great Britain the range in wages is abnormally great owing to the fact that industries which have felt the pressure of foreign competition have sustained much heavier reductions of wages during the depression which began in 1921 than the so-called “sheltered industries.”

GREAT BRITAIN.

Weekly Rates of Unskilled Workers at September 30th, 1925.

					s.	d.
Building ..	..	..	..	..	55	7
Engineering	..	..	..	..	40	2
Shipbuilding	..	..	..	..	338	5
Railways ..	..	..	..	..	46	0^2
Local authorities	..	..	..	..	533	5
Gas works ..	..	..	..	..	523	11
Electrical supply	..	..	..	..	54	10

GERMANY.

Weekly Rates of Unskilled Workers in August 1925.

			R.Mks.
Building..	..	..	..	..	44.37
Mining ..	..	..	..	..	32.58
Metal ..	..	..	..	..	30.31
Chemical ..	..	..	..	..	32.54
Wood ..	..	..	..	..	39.75
Paper ..	..	..	..	..	28.66
Textiles ..	..	..	..	..	24.67
Brewing ..	..	..	..	..	40.47
Printing ..	..	..	..	..	40.16
National railways	..	..	..	..	32.29
Weighted average^1	..	..	..	..	32.85

UNITED STATES

Average Hourly Earnings of Unskilled Workers in July 1925.

					Cents.
Iron and steel	..	..	..	..	49.8
Foundries ..	..	..	..	..	50.7
Automobiles	..	..	..	..	50.9
Chemicals ..	..	..	..	..	49.2
Furniture ..	..	..	..	..	42.3
Meat packing	..	..	..	..	46.2
Wool ..	..	..	..	..	50.0
Paper and pulp	..	..	..	..	45.2
Boot and shoe	..	..	..	..	39.8
Lumber and mill work	..	..	..	36.7
Average^1	..	..	..	47.0

The wage paid to unskilled workers in the lowest paid industry in which employers and workers are well organised might be taken as minimum wage for a district or country. Any one industry is, however, unsatisfactory as basis owing to the effects on it of exceptional economic conditions. The minimum wage should be established on a broader basis. Although suffering from the defect of being arbitrary, perhaps the most satisfactory method would be to fix the minimum at a given proportion of the average wage paid to unskilled workers in well-organised industries. Thus the minimum wage might be fixed at, say, 80 per cent. of the average wage paid to unskilled workers in certain of the chief industries of the district or country.¹

In selecting the industries to be taken as basis, it would be desirable to omit those in which wages are abnormally high or low owing to their special character. Thus, for example, in most countries wages for a full working week in the building industry are higher than those in most other industries, largely to make up for irregularity of employment. Again, at any given date wages in certain industries may be exceptionally low or high owing to special conditions of a temporary character. In the figures given above for Great Britain, wages in the engineering and shipbuilding industries are abnormally low in relation to those paid in oth...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title
• Original Copyright
• Preface
• Table of Contents
• I. Introduction
• II. Objects of Minimum Wage Legislation
• III. Bases Adopted in Different Countries
• IV. The Living Wage
• V. Capacity of Industry to Pay
• VI. A National Minimum
• VII. Provision for the Worker’s Family
• VIII. Relation Between the Wages of Men and Women
• IX. Wages Below the General Minimum
• X. Machinery for Fixing Minimum Wages
• XI. Methods of Enforcement
• XII. International Action
• Index