Chapter 2.
TAXED PROFITS AND WAGES CONTRASTED
The Wage Index Numbers are those of the Board of Trade (Cd. 4954). The Profit Index Numbers are based upon the Inland Revenue Assessments. The Financial Year 1893-4 is taken to correspond with the Calendar Year 1893.
_Note._—The wages and profits of 1900 are represented by 100. The wages and profits of the other years are expressed as percentages of those of 1900.
---------+-----------------------------------------------------+----------- | PROFITS. | WAGES. +---------------+-------------+-----------+-----------+----------- | A | B | C | D | E YEAR. | Gross | Probable | Average | Index No. | | Assessments | Number of | Gross | of | Wages | to | Income Tax | Income of | Incomes. | Index No. | Income Tax. | Payers. |Tax Payers.|1900 = 100.|1900 = 100. ---------+---------------+-------------+-----------+-----------+----------- | £ | NUMBER. | £ | PER CENT. | PER CENT. 1893 | 674,000,000 | 950,000 | 709 | 86.8 | 90.1 1894 | 657,000,000 | 960,000 | 684 | 83.8 | 89.5 1895 | 678,000,000 | 970,000 | 698 | 85.5 | 89.1 1896 | 705,000,000 | 980,000 | 719 | 88.1 | 89.9 1897 | 734,000,000 | 990,000 | 741 | 90.8 | 90.8 1898 | 763,000,000 | 1,000,000 | 763 | 93.5 | 93.2 1899 | 792,000,000 | 1,010,000 | 784 | 96.0 | 95.4 1900 | 833,000,000 | 1,020,000 | 816 | 100.0 | 100.0 1901 | 867,000,000 | 1,030,000 | 841 | 103.0 | 99.0 1902 | 880,000,000 | 1,040,000 | 846 | 103.6 | 97.8 1903 | 903,000,000 | 1,050,000 | 860 | 105.3 | 97.2 1904 | 912,000,000 | 1,060,000 | 860 | 105.3 | 96.7 1905 | 925,000,000 | 1,070,000 | 864 | 105.8 | 97.0 1906 | 944,000,000 | 1,080,000 | 874 | 107.1 | 98.3 1907 | 980,000,000 | 1,090,000 | 899 | 110.1 | 101.7 1908 | 1,010,000,000 | 1,100,000 | 918 | 112.5 | 101.0 ---------+---------------+-------------+-----------+-----------+----------- Increase| 49.8 | 15.7 | 29.5 | 29.5 | 12.0 1893-1908| Per Cent. | Per Cent. | Per Cent.| Per Cent. | Per Cent. +---------------+-------------+-----------+-----------+----------- Increase| 21.2 | 7.8 | 12.5 | 12.5 | 1.0 1900-1908| Per Cent. | Per Cent. | Per Cent.| Per Cent. | Per Cent. ---------+---------------+-------------+-----------+-----------+-----------
Thus in recent years the proportion of the national income taken by labour made no gain upon the proportion taken by capital. On the contrary, labour took a diminished share of the increased product.
Since the Boer War labour has barely retained the increase which it obtained between 1894 and 1900.
The seriousness of the position is increased by the great rise in the cost of living, as the following figures testify:
WAGES AND COST OF LIVING
Board of Trade Board of Trade Index Number Wages Index No. Retail Price of Food in London.
1895 89.1 93.0 1900 100.0 100.0 1908 101.0 109.0 ----- ----- Increase per cent. 13.3 17.2 ==== ====
Thus, real wages have actually fallen since 1895.
Again, as has been already remarked, the Board of Trade Wages Index Number deals with trades which on the whole have gained more than wages generally. Railway wages have been stationary for years, even while the cost of living has been going up. On the German and Swiss national lines the men have been granted higher wages in compensation for increased costs; here our railway companies abuse their monopolistic position to the uttermost in regard to wages as in regard to the public welfare.
In addition to reduced rates of wages in slump years, the working classes are made to bear the brunt of depression through (1) "short time" or partial unemployment, and (2) dismissal.
UNEMPLOYMENT.—TABLE SHOWING, FOR THE END OF EACH MONTH IN 1900-1910, THE NUMBER OF MEMBERS OUT-OF-WORK IN THE TRADE UNIONS WHICH PAY "UNEMPLOYMENT BENEFIT." THESE FIGURES DO NOT INCLUDE MEMBERS RECEIVING STRIKE OR SICK PAY
---------+-----------+------+-----++---------+-----------+------+----- Date. |Membership.|Number| Per || Date. |Membership.|Number| Per | |out of|Cent.|| | |out of|Cent. | |Work. | || | |Work. | ---------+-----------+------+-----++---------+-----------+------+----- 1900. | | | || 1902. | | | January | 521,833 |14,252| 2.7 ||July | 550,169 |21,859| 4.0 February | 524,872 |15,114| 2.9 ||August | 551,565 |24,549| 4.5 March | 524,199 |11,821| 2.3 ||September| 553,870 |27,522| 5.0 April | 525,865 |13,075| 2.5 ||October | 548,442 |27,270| 5.0 May | 531,608 |12,645| 2.4 ||November | 549,197 |26,454| 4.8 June | 533,119 |13,992| 2.6 ||December | 552,415 |30,302| 5.5 July | 533,499 |14,566| 2.7 || 1903. | | | August | 534,331 |15,971| 3.0 ||January | 547,671 |27,685| 5.1 September| 536,242 |19,520| 3.6 ||February | 549,843 |26,471| 4.8 October | 535,668 |17,750| 3.3 ||March | 559,129 |24,096| 4.3 November | 539,175 |17,515| 3.2 ||April | 554,901 |22,665| 4.1 December | 540,102 |21,496| 4.0 ||May | 554,524 |22,102| 4.0 1901. | | | ||June | 556,695 |24,804| 4.5 January | 545,539 |21,682| 4.9 ||July | 555,743 |27,394| 4.9 February | 543,487 |21,159| 3.6 ||August | 561,946 |30,751| 5.5 March | 544,688 |19,618| 3.8 ||September| 558,508 |32,179| 5.8 April | 547,197 |21,018| 3.6 ||October | 555,105 |32,358| 5.8 May | 544,460 |19,487| 3.4 ||November | 562,954 |33,614| 6.0 June | 541,651 |18,605| 3.4 ||December | 559,897 |37,501| 6.7 July | 539,422 |18,164| 3.9 || 1904. | | | August | 543,971 |21,025| 3.7 ||January | 561,226 |36,767| 6.6 September| 542,917 |20,180| 3.7 ||February | 563,824 |34,388| 6.1 October | 544,827 |19,995| 3.8 ||March | 567,232 |33,950| 6.0 November | 545,832 |20,614| 3.6 ||April | 561,611 |33,706| 6.0 December | 554,018 |25,703| 4.6 ||May | 571,384 |36,002| 6.3 1902. | | | ||June | 573,373 |34,066| 5.9 January | 553,218 |24,470| 4.4 ||July | 568,272 |34,494| 6.1 February | 561,708 |24,072| 4.3 ||August | 575,061 |37,006| 6.4 March | 551,270 |20,241| 3.7 ||September| 575,575 |39,005| 6.8 April | 550,958 |21,349| 3.9 ||October | 576,642 |39,396| 6.8 May | 549,023 |21,926| 4.0 ||November | 577,268 |40,244| 7.0 June | 544,893 |22,832| 4.2 ||December | 573,726 |43,435| 7.6
UNEMPLOYMENT—_continued_
---------+-----------+------+-----++---------+-----------+------+----- Date. |Membership.|Number| Per || Date. |Membership.|Number| Per | |out of|Cent.|| | |out of|Cent. | |Work. | || | | |Work. ---------+-----------+------+-----++---------+-----------+------+----- 1905. | | | || 1908. | | | January | 578,910 |39,315| 6.8 ||January | 649,789 |40,580| 6.2 February | 578,708 |35,778| 6.2 ||February | 639,073 |40,900| 6.4 March | 578,684 |32,558| 5.6 ||March | 639,716 |43,853| 6.9 April | 575,968 |32,348| 5.6 ||April | 638,237 |48,035| 7.5 May | 575,512 |29,487| 5.1 ||May | 627,613 |49,515| 7.9 June | 576,346 |29,995| 5.2 ||June | 653,327 |53,766| 8.2 July | 576,472 |29,845| 5.2 ||July | 646,511 |53,163| 8.2 August | 578,444 |31,046| 5.4 ||August | 648,585 |57,912| 8.9 September| 578,542 |30,696| 5.3 ||September| 593,444 |55,793| 9.4 October | 584,288 |29,560| 5.0 ||October | 591,053 |56,200| 9.5 November | 586,040 |27,769| 4.7 ||November | 644,770 |58,349| 9.1 December | 581,630 |28,734| 4.9 ||December | 679,060 |61,619| 9.1 1906. | | | || 1909. | | | January | 588,121 |27,614| 4.7 ||January | 688,588 |59,786| 8.7 February | 586,956 |26,064| 4.4 ||February | 696,688 |58,670| 8.4 March | 585,376 |22,465| 3.8 ||March | 700,654 |57,450| 8.2 April | 582,201 |21,037| 3.6 ||April | 700,867 |57,250| 8.2 May | 590,919 |21,080| 3.6 ||May | 699,779 |55,473| 7.9 June | 593,830 |21,785| 3.7 ||June | 698,284 |55,331| 7.9 July | 595,637 |21,464| 3.6 ||July | 693,848 |54,877| 7.9 August | 596,010 |22,528| 3.8 ||August | 697,268 |53,918| 7.7 September| 598,611 |22,826| 3.8 ||September| 695,720 |51,749| 7.4 October | 600,122 |26,313| 4.4 ||October | 694,930 |49,664| 7.1 November | 604,370 |27,446| 4.5 ||November | 696,415 |45,569| 6.5 December | 597,198 |29,212| 4.9 ||December | 692,153 |45,963| 6.6 1907. | | | || 1910. | | | January | 617,911 |25,990| 4.2 ||January | 694,456 |47,259| 6.8 February | 618,574 |23,932| 3.9 ||February | 701,252 |40,121| 5.7 March | 618,230 |22,058| 3.6 ||March | 701,766 |36,543| 5.2 April | 619,591 |20,310| 3.3 ||April | 699,932 |30,475| 4.4 May | 624,993 |21,081| 3.4 ||May | 703,439 |29,787| 4.2 June | 622,584 |22,189| 3.6 ||June | 702,522 |25,866| 3.7 July | 631,158 |23,291| 3.7 ||July | 698,888 |26,664| 3.8 August | 632,068 |25,458| 4.0 || | | | September| 631,241 |28,914| 4.6 || | | | October | 638,788 |30,079| 4.7 || | | | November | 639,678 |32,010| 5.0 || | | | December | 644,298 |39,343| 6.1 || | | |
As to the amount of short time worked between 1900 and 1910, we have no adequate information, but as to unemployment the evidences have forced themselves upon public attention in every part of the country.
How ruthlessly the workman is made to bear the chief burden of bad trade and how, even in the best years, there is always a surplus of unemployed labour, can be clearly shown.
There are about 2,000,000 men and women Trade Unionists in the United Kingdom, belonging to some 1,300 Trade Unions, and forming but about one-seventh of the manual workers of the United Kingdom. Some of these Unions pay "unemployed benefits," and are therefore enabled to record accurately how many of their members are out-of-work. The membership of these particular Unions is about 650,000. The Board of Trade collects from them, monthly, details of the members out-of-work and these details are published in the official "Labour Gazette." From that publication I have compiled the table on pages 116-117, which shows faithfully, so far as about half a million of our workmen are concerned, how capital deals with labour. It covers the years since 1900, and continues the record printed on pp. 106-107 of "Riches and Poverty," edition 1905.
The period examined covers a complete trade cycle, with its fat years and lean years. I think the reader cannot fail to be struck with the extraordinary variations in the state of employment shown in the table. Even in the best year of the period, 1900, and in March, the best month of that year, 11,821 members were receiving out-of-work pay out of a total of 524,199, and before a month had passed 1,200 more men had been discharged. By January, 1901, the number of unemployed exceeded 21,000, or 4.0 per cent. By the end of 1901 the employers had rid themselves of 26,000 men out of 554,000. Throughout 1902 the number receiving out-of-work pay was round about 25,000 at the end of each month, the figure rising to 30,000 in December. By the end of 1903 another 7,000 were discharged, and in December 1904 the total rose to over 43,000 out of 574,000, or 7.6 per cent. In 1905 there was improvement, continuing in 1906-7. At the end of 1907, however, 39,000 out of 664,000 were out of work, and a year later 62,000 out of 679,000, or 9 per cent., were unemployed. 1909 saw recovery, which has happily continued until now (August 1910). At the end of July 1910 the unemployment rate had fallen to 3.8 per cent.
These facts relate, not to casual labourers, but to the flower of our skilled workmen—to a class of men who are least likely to suffer (1) because they are the most needed instruments of capital, and (2) because they are organized and best able to resist injustice. If we were able to set out the facts relating to all manual labourers we should probably get a picture even more distressing. It is at any rate unlikely that, amongst manual labourers as a whole, employment is better than in the chief Trade Unions.
In December 1904, the Hackney Town Council conducted a census of the unemployed of Hackney. It was carried out in a very sensible way. At a cost of about £150 every house in the borough was canvassed between December 12th, 1904, and January 31st, 1905, and particulars obtained from every person over 16 years of age found to be unemployed. The results were:—
Population (1901). Houses. Unemployed.
North Hackney 45,110 9,152 465 Central " 69,368 9,837 1,090 South " 104,794 14,751 2,963 ------- ------ ----- Totals 219,272 33,740 4,518 ======= ====== =====
South Hackney, which contains the poor Homerton Ward, of course gave the worst results. The unemployed in South Hackney actually numbered 3 per cent. of its whole population, men, women, and children! Taking the borough as a whole, including well-to-do Stamford Hill, the unemployed rate came out at nearly 7 per cent. of the "employable" population of all classes. 530 cases of "pawning and selling home" were discovered. Thus, for all classes of workers in Hackney, the unemployment rate was almost precisely the same as the rate in the Trade Unions paying unemployment benefit. It is also worthy of note that, out of a total number of 4,315 males unemployed, as many as 1,477 were "labourers," and 1,167 of these "general labourers." These facts, impressive as they are, amount to an understatement of the case, however. Many of the unemployed, from feelings of delicacy, failed to record their condition for fear of public attention being directed to them personally. Mr Councillor Fairchild of Hackney told me that he knew of forty cases of unemployment not returned in the census. This goes to show that we are justified in taking the unemployed Trade Union rate as really representative of the whole body of labour. While, on the one hand, it excludes postmen, railway servants, policemen, and others who have quite regular work, it does not include the great mass of "labourers" and other casual workers whose state of employment must always be worse than that of the men belonging to the benefit-paying Trade Unions.
It is well to point out, for the facts are little known, the enormous sums expended by the chief Trade Unions in out-of-work pay. For recent years the figures have been:—
EXPENDITURE ON UNEMPLOYED BENEFIT BY CERTAIN TRADE UNIONS HAVING A TOTAL MEMBERSHIP OF ABOUT 650,000
Year. Expenditure.
1898 £234,000 1899 185,000 1900 261,000 1901 325,000 1902 429,000 1903 516,000 1904 655,000 1905 523,000 1906 424,000 1907 466,000
Thus, even in the best recent years, 1899 and 1900, these Unions had to pay out £185,000 and £261,000 respectively to sustain members out-of-work. Modern industry works with a constant margin of unemployed labour, a margin which ever tends to depress wages and to place the employed at a disadvantage in bargaining for the sale of their services.
The sums above named are part, of course, of the alleged working class "capital" referred to on page 56, and often advanced as proof of the _riches of the poor_. In plain fact they are abstracted from poor wages in order to keep the home together when those poor wages fail altogether in seasons of unemployment. To term them "capital," or to flaunt them as "wealth," shows a curious perversity of ideas.
While we do not know how many workers are unemployed at any given time, it is probable that, as the whole body numbers about 15,000,000, and 60,000 are sometimes unemployed out of a group of 650,000 of these, the total may reach 500,000 or 600,000 or more in bad years.
Yet, when we obtain particulars of the profits of capital in "bad years of trade," we see little diminution in the handsome sums confessed to the Commissioners of Inland Revenue, and we understand how profits are sustained at the expense of the suffering and partial degradation of a great body of British citizens larger in number than the entire landowning and capitalist classes. I shall be surprised if it does not occur to some of those who read these lines that in view of the extraordinary profits shown in the totals on page 112 the wholesale dismissal of workmen at the first symptom of slackening trade is a disgrace to our civilization.
As I have remarked earlier in these pages, unemployment is by no means confined to the manual labour classes. All the humbler units of commercial life are subject to treatment which is little better than that accorded the "workman." As I write there are thousands, if not tens of thousands, of clerks, writers, warehousemen, shop assistants, travellers, canvassers, agents, and others out of work and undergoing terrible sufferings in the endeavour to keep afloat. Cases are frequent in which advertisements offering berths of small account are hungrily applied for by hundreds of applicants. It is a sad reflection that for the vast majority of our people there is no such thing as security of tenure of employment. The profits assessed to income tax, the income, that is, of about one-ninth of our population, continue to rise by leaps and bounds, but the state of employment remains very much as it was. After a careful examination of the employment records of forty years the Board of Trade gave their verdict in 1904 (Cd. 2337, p. 84), that "the average level of employment during the past four years has been almost exactly the same as the average of the preceding forty years."
But, as our population to-day is very much greater than in 1860, the same "average level of employment" means that there are far more unemployed workmen in England to-day than was the case forty years ago. The proportion of out-of-works is neither larger nor smaller, but the magnitude of the problem is greater because there are more of us.
No attempt is yet made by our inadequate Census to obtain particulars of the number of unemployed. The Census Bill of 1910 led to a wrangle as to whether a religious census should be taken, but there was not even a wrangle as to whether the golden opportunity should be seized to ascertain the number of unemployed. So the Census of 1911 will come and go. Before the Census of 1921 is taken many proposals will be made for dealing with unemployment, but no one will know the size of the problem to be dealt with.
There is, of course, no remedy for unemployment under present economic conditions. All that can be done by the State, consistently with the private ownership of land and industrial capital, is to _remedy the distress arising from unemployment_, and as I write (1910) the Government are contemplating a scheme for unemployment insurance, based on contributions by men and masters, with aid from taxation. Such a scheme should be strongly supported, but there should be clarity of ideas as to what is effected by insurance. Unemployment insurance no more cures unemployment than life insurance cures death. All that is done by it is to _relieve the distress caused by the unemployment_. It is a great and worthy object, but the unemployed workman drawing his out-of-work pay, _is still unemployed_.
The Labour Party has propounded a "Right-to-Work" Bill, but this again, on examination, suggests work _or maintenance_, its promoters seeing clearly that economic work cannot be made to order by a State which is as poor in property as the workmen themselves. The Right-to-Work Bill is thus no more a _remedy for unemployment_ than an insurance scheme is such a remedy.
Nor can the State, by pursuing its few public works chiefly in bad seasons, level unemployment as between good years and bad, or as between good seasons and bad. The troughs of the waves of depression are too great to be filled by such means, and they deceive themselves who think that they can rule those waves by the manipulation of Government contracts.
The Labour Exchange is a useful machine for organizing labour to meet the vicissitudes of individualistic industry. It has been described as equivalent to the _organization of industry_, but that is a misnomer. The organization of industry can only begin with the organization of the means of production. If we organize production we necessarily organize labour. If we enrol unemployed workmen, and move them about as pawns to suit the uneconomic conditions of unorganized capital units ("Come and tell us if you want a man;" "Come and tell us if you want a job") we may save the workman some trouble and loss of self-respect in finding new jobs, and render more tolerable his periods of idleness, but most surely we neither organize industry nor increase the volume of employment.