Economic Tracts for the Times by Cole G. D. H.;

Author:Cole, G. D. H.; [Cole, G. D. H.]
Language: eng
Format: epub
Publisher: Taylor & Francis Group
Published: 2011-08-15T00:00:00+00:00

A Note on Relative Trade Wage-Rates

I have discussed in the preceding paper the case for a general reduction in rates of wages, but not the special case that is put forward for the reduction of wage-rates in the 'sheltered' trades. It is, of course, true enough that in recent years the workers in industries and services sheltered from international competition have tended to improve their wage-position relatively to the workers in the exporting industries. Especially, there has been a marked improvement in the wages of distributive workers and of those engaged in many of the public utility services. Workers in the exporting industries, on the other hand, have suffered large wage reductions during the years of industrial depression. It is accordingly suggested that if wage-rates in the sheltered occupations were brought down to the unsheltered level, the effect would be to reduce the cost of living so as to bring it more closely into conformity with the fall in wholesale prices, and also, by cheapening finished goods to the consumer, to create more elastic markets for the producing industries.

It cannot be denied that there is some force in this view. But it has to be remembered, first, that the workers in such services as transport and distribution were, in most cases, very poorly paid, in relation to the main bodies of productive workers, before the war, and that the absolute level of their wage-rates, though it has risen more than the average, is still in most cases not high; so that it can hardly be easy to force these workers back into the old position of relative inferiority from which they have but lately emerged. Secondly, we must not forget that wage-rates in the exporting industries have in many cases been pressed down to a very low level, defended only on grounds of sheer necessity; so that the demand that sheltered wages should fall to the unsheltered level amounts in fact to a demand for a general reduction in wage-rates, and is open to the objections described in my paper.

Moreover, no one has suggested how the reduction of sheltered wage-rates is to be brought about, save as part of a general campaign to reduce wage-rates over the entire field. But such a campaign would almost certainly be more effective in bringing down wage-rates in the unsheltered than in the sheltered trades, low as the former rates are already. For the main pressure of competitive forces is still playing upon the unsheltered trades; and wages in the sheltered trades have been maintained chiefly because the bargaining power of the workers is greater in these trades than it is elsewhere.

Accordingly, an attempt to reduce wage-rates in the sheltered trades alone would hardly succeed, while an attempt to reduce them in all trades would probably but exaggerate the existing disparities between the sheltered and unsheltered groups. The real need is that wage-rates in the unsheltered occupations should be increased, rather than that those in the sheltered occupations should be cut down.

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