Organized Labor

In accordance with these facts and opinions there has devel oped, at least in one respect, a pretty definite conviction on the part of the public regarding the closed shop, namely: the closed shop should go only with the open union. A union under the closed-shop policy is exercising a quasi-public func tion, that of controlling the industrial action of private citi zens against their will. The union, therefore, in this view, must, with anything like the closed shop, cease to be a purely private, voluntary organization, and become in some respects subject to public regulations as to its internal rules and ad ministration. This view, however, is very unacceptable to the leaders of organized labor in America, and there the question now stands.

§ 16.

Effects of organization upon general wages. A question different from that discussed above is as to the effect that the organization of labor has upon the general level of wages, including those of unorganized workers. The thought has sometimes been expressed by sympathetic social students outside of trade-union circles that, but for the organization of labor, wages in general in America would be no higher than they were in 1850. This seems to be assumed in much of the argument of labor leaders, for they speak as if all wages. but for trade-unions, would be at the starvation level, and they credit everything above that level to the work of the unions. In Trant's book already referred to, which was re printed and circulated by the American Federation of Labor as representing its theory and claims, all the advances that have been made in wages are attributed to the trade-unions. This claim is peculiarly effective in America, where wages are and always have been relatively high. But proof of the claim is lacking. As we have seen, fewer than one in sixteen of all gainfully employed and fewer than one in twelve of those working for contractual wages have been organized. On no principle of value could the mere organization of one twelfth of the wage-earners, without permanently withdraw them from the labor market, explain the relatively high wages of the other eleven twelfths. In many lines where labor is not organized, as in teaching, clerical, professional, domestic, and agricultural services, wages have risen as much or even more than in most of the organized trades. The un derlying economic forces determining the general level of labor incomes in a country are much more fundamental in nature than labor-unions or protective The trade union authority already cited seems in another passage to admit a view not essentially unlike that just expressed when he says: "Capital is increasing faster than population. . . . It seems therefore merely in obedience to natural laws that wages should rise." The only reasons ever suggested for thinking that the or ganization of one twelfth (or any larger proportion of the wage-earners) could in any general way raise the labor in comes of those remaining unorganized are: first, that organ ized labor sometimes leads the way in securing favorable legislation ; and, secondly, that if organized workers get higher wages this sets a standard which it is easier for the unorgan ized then to attain. Both of these suggestions may have some

little validity in special cases, effecting slightly a small pro portion of the unorganized workers, but neither touches 9 See Vol. I, pp. 227, 439, 466, 504-507; and above, ch. 16, 8.

fundamental causes of general high wages. Whereas it is clear that when the unorganized laborers constitute the main body of consumers for the products of organized labor (and this unquestionably is in large measure the case) any increase in wages that can be secured through organization by a por tion of the workers must, in part, be subtracted from the "real" incomes of the unorganized workers. The employer is middleman, not to a great degree the ultimate consumer, of labor." Some part, it is true, of the higher wage might be taken from profits or from wealth incomes, but this would still leave the unorganized workers the losers.

§ 17. Future role of organization. In the light of the principles of wages and of experience, it appears that organ ization most easily gains results when wages are below the competitive rate ; and it gets the most stable results when wages are kept at or little above the competitive rate. Only exceptionally is the control of a labor organization in a trade so strong that it is able to maintain monopoly wages for long periods. An earnest effort on the part of the workers is necessary for them to get the share that true competition would accord them, but the attempt to force wages beyond that point must be the occasion of increasing friction. With so modest an ideal, however, as the true com petitive wage, organized laborers and their leaders cannot be expected always to be content.

Aside from its effects upon the wage bargain, unionism finds its greatest justification is in its unspectacular fraternal, mutual-benefit, and educational functions. The chief forces favorable in the long run to wages that can be affected by organization are domestic peace, order, and security to wealth; honesty and good faith between worker and employer, in law-maker and in judge ; efficiency and intelligence of the workers; and far-sighted social legislation. Some of these con tribute to greater productiveness, others to a fairer distribu tion. In all these ways organized laborers have made vain 10 See vol. I, pp. 217, 222-223, 362, 356.

able contributions, unfortunately neutralized in many cases by a narrow class outlook. Organized labor is here to stay for a long time to come, and as the elite of the wage-earning class it should, and probably will, be an increasing force for political betterment and for social welfare in the republic.