Wednesday, June 1, 2016

The History of Minimum Wage Failures - 1916 Pamphlet

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THE HISTORIC KALEIDOSCOPE OF MINIMUM WAGE LEGISLATION by Merchants and Manufacturers of Massachusetts 1916  

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THERE has been an astonishing lack of available information in the United States concerning the statutory Minimum Wage, its origin, its history and its practical results. The two great classes of Americans who are closest to the scene of action (the employer and the employee) know the least about it. It is a common picture at hearings in almost any of the states where Minimum Wage Laws are proposed to be enacted to find the proponents and advocates of the bill made up either wholly or preponderantly of men and women whose livelihood is largely derived from service in this or that "social welfare" organization, theorists on sociology, an occasional college professor, and, finally, a large proportion of well-to-do women whose sympathetic tendencies far outweigh their analytical grasp of the laws underlying the business and economic relations of mankind. It is rare, indeed, to find any of these advocates numbered among those classes of society whose social and economic welfare is really bound up in the weekly pay roll of factory and shop, whether as owner or as worker. Except theoretically, an increase in wage standards, or, on the other hand, the impairment of a great industry through hampering laws, means relatively nothing to most of these advocates. Therefore, to them, the picture of a concourse of happy, prosperous workers, emancipated from worry and care through a simple decree of the legislature, is naturally an alluring and pleasing one. We, too, wish that the economic problems of humanity were as easily solved, and with as little sacrifice.

The result is, that ninety-nine per cent of employers first learn of this new burden when the Minimum Wage inspector appears in the factory office and demands certain information contained only in the private books of the concern. The employer suddenly realizes that from this demand to examine his pay roll and other records, to a ruthless overhauling of his dividends, and profit and loss account, is but a single step.

Similarly, the employee—she, in the majority of cases, has never heard of the law until it is in full swing. In known instances, when fully informed of the probable effect of the law upon her future prospects and her co-workers, if given an opportunity, she has voted against its acceptance by her employer. The reasons for this are set forth in detail later on in the story. Read them carefully. In other words, the women workers affected by the Minimum Wage Law were not its original advocates, nor are they to-day as a class for it in anything but an indifferent sense. All the higher paid, more efficient workers dread its levelling effect; while the inefficient fears discharge, and she has good cause to fear this in Massachusetts.

It is well known that from the beginning of industrial development, dating far back into the Roman era, wages and the determination of wages have almost without exception been a matter of private contract. The intangible but none the less certain economic law of supply and demand fixed the general terms of wage schedules. Employer and employee have alike bowed to this law because every infringement of it has brought terrible rebukes to industry, no matter how rosy colored or subtle the theories advanced by various agitators for its evasion. There have been several unsuccessful attempts to fix not only a Minimum Wage but also a Maximum Wage during the last two thousand years, especially by the Romans in the first five Christian centuries. As near as can be learned these attempts, which at first were to fix Maximum Wages, all succumbed to the silent working of the economic law. In the Middle Ages, in the countries of western and southwestern Europe, the same attempt was made, and in England in 1349 A.D., under the statute of Edward III, maximum wages were decreed, owing to the scarcity of labor caused by pestilence, and the consequent exorbitant demands of the workers. This again worked badly, caused much injustice to the skilled workers themselves, and was overturned. In all these attempts the skilled workers and the inefficient suffered most. In the reign of Elizabeth a Minimum Wage Law was enacted, and for a long period state regulation was the popular means of meeting economic inequalities. Until these regulations were repealed chaos reigned in British economic circles. After their repeal the status of labor began to improve. On this point note the statement of Mr. George Howell, an advocate of Trades-Unionism and a member of the British Parliament. He speaks of the two hundred and fifty year period beginning with Elizabeth, and his statement is deserving of much weight. It is as follows:

"The state having once more entered upon the wild-goose chase of attempting to regulate labor, thereby restraining the development of the individual in the pursuit of his own welfare, it found no halting place. As new industries arose, the law had to be extended. Each fresh discovery and invention was more or less handicapped in its application to industry. Capital was fettered, employers were harassed and hampered, and manufacturers were impeded by such laws, and worse than all, they afforded but scant protection to the workmen. It so happened, however, that the latter sought to perpetuate them, because they feared that by repeal they would fare worse than under the law. The capitalists and employers, on the contrary, sought their repeal, and for about two centuries the contest raged fiercer and fiercer on the one side for the retention of the laws, and on the other for their repeal. . . . But there was no halting place. Finis was nowhere written at the end of any chapter. . . . Industry groaned under the weight of regulation, restriction and control. There was a revolt against it, first by one party and then by the other, as it suited them, or as the nature of the industry demanded. It almost looked at one period as if the whole trade of the country would be crushed beneath the load of legislation; and it would have been, had not other countries been simply stupid as regards the same kind of legislation, or at least such legislation as compassed nearly the same ends."

Regarding the present agitation to return to this policy, Mr. Howell says:

"If a cure for this frenzy be possible, probably the best cure will be a careful perusal of the legislation prior to the commencement of the present century, and a careful study of its effect. It nearly killed our early trade, and nearly starved our people. It needs no prophet to foretell that the same result would follow if such laws were re-enacted."

Careful study of this part of English economic history will convince any fair-minded man that state intervention in the mysterious region of wages and wage-fixing has never brought other than temporary relief, and that the eventual distress resulting from such entanglements has been terrible in the extreme.

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