The Regulation of Wages
Professor of Sociology, London University
Professor Hobhouse said:—The wages, hours, and general conditions of industrial workers are of interest to the community from two points of view. So far as the less skilled and lower paid workers are concerned, it is to the interest and it is the duty of the community to protect them from oppression, and to secure that every one of its members, who is willing and able to contribute honest and industrious work to the service of others, should be able in return to gain the means of a decent and civilised life. In this relation the establishment of a minimum wage is analogous to the restriction of hours or the provision for safety and health secured by Factory Legislation, and carries forward the provision for a minimum standard of life. The problem is to determine upon the minimum and adjust its enforcement to the conditions of trade in such wise as to avoid industrial dislocation and consequent unemployment.
With regard to workers of higher skill, who command wages or salaries on a more generous scale, the interest of the community is of a different kind. Such workers hardly stand in need of any special protection. They are well able to take care of themselves, and sometimes through combination are, in fact, the stronger party in the industrial bargain. In this region the interest of the community lies in maintaining industrial peace and securing the maximum of goodwill and co-operation. The intervention of the community in industrial disputes, however, has never been very popular with either party in the State. Both sides to a dispute are inclined to trust to their own strength, and are only ready to submit to an impartial judgment when convinced that they are momentarily the weaker. Nor is it easy when we once get above the minimum to lay down any general principles which a court of arbitration could apply in grading wages.
For these reasons the movement for compulsory arbitration has never in this country advanced very far. We have an Industrial Court which can investigate a dispute, find a solution which commends itself as reasonable, and publish its finding, but without any power of enforcement. The movement has for the present stuck there, and is likely to take a long time to get further. Yet every one recognises the damage inflicted by industrial disputes, and would admit in the abstract the desirability of a more rational method of settlement than that of pitting combination against combination. Such a method may, I would suggest, grow naturally out of the system which has been devised for the protection of unskilled and unorganised workers, of which a brief account may now be given.