Living wages (1974)

From the June 1974 issue of the Socialist Standard

The 70th anniversary issue of the Socialist Standard carried throughout its pages a series of snippets from old Socialist Standard articles highlighting the SPGB's unique position on issues of the day. Where possible, I've provided a link to the full article.

The evidence being given at the Industrial Court which is inquiring into the Dockers’ claim for a higher wage, and which, of course, is perfectly in order seeing that we, the workers, have been told so often by Lloyd George and his satellites that we were to have a “new world” on the cessation of hostilities, is exceedingly interesting. Take the following, for instance:

“Mr. Bevin asked what, assuming a docker worked . 44 hours a week, would be his present rate of earnings in Liverpool. 

Witness (Sir Alfred Booth): £3 4s. 6d. 

Do you really suggest that is a living wage?—Yes.

Could you maintain your family upon it?—No, I could not. 

Is it right to ask a man to maintain himself on what yon would not dream of maintaining yourself on?— It is not a question of what I ask him to live upon, but what economic conditions allow’”—Daily News, February 13th, 1920.

[From “By the Way”, Socialist Standard, March 1920]

Letter: Living wage or . . . (2010)

Letter to the Editors from the September 2024 issue of the Socialist Standard

Living wage or . . .

Dear Editors

I must declare from the outset that I am a fellow traveller with the SPGB in as much as seeking the abolition of the wage system, but in the Socialist Standard’s recent Cooking the Books column ‘What’s a “Living Wage”?’ (June), I was left disappointed by the way in which the living wage was represented.

The first problem with the article is where (discussing the Green Party’s flagship policy of raising the National Minimum Wage to £8.10/hour) it states that £16,848 pa. ‘hardly qualifies as an adequate “living wage”.’ This feels a little disingenuous.

Let’s be honest about this: of course £16.8k a year is not comfortable, and it is certainly not fair. It is still several thousand shy of the current national average, but it is also several thousand closer. However, the difference it would make (before we get onto potential wider economic repercussions of the wage rate) to those currently on NMW would be phenomenal.

This is a difference not only of nearly £5k a year but has a multitude of knock-on benefits the article neglects to mention, the most important and obvious being the positive impact on health (one of the key grounds for the living wage) due to reduced stress levels.

This leads me comfortably into my next point. As a seasoned London-based organiser around the London Living Wage, one of the most uncomfortable facts I’ve had to deal with in campaigning for the living wage is that paying the London Living Wage has been good for employers; it is good management of capitalism.

A better wage rate (albeit still suitably low) means fewer employee sick days taken and a much lower turnover in employee numbers. The former relates specifically to the aforementioned health benefits, the latter relates often to simple time-management.

So many NMW workers have to work multiple jobs to make up enough hours in order to gain enough money to cover rent and provide the cheapest meal for their families. Staff turnover can be high for NMW employers due to employees taking up work at sites marginally closer to home, etc. In many respects the living wage can be more about time rather than money.

The article states that the first effect of legal living wage rate would be that “some employers would go bankrupt.” Of course this is a definite possibility in the current economic crisis with many employers already teetering on the edge.

On the other hand, however, the kind of employers most likely to be adversely affected would (obviously) be those dependent on super-exploitation: I’m thinking especially of cleaning, security and catering agencies.

But the roles employers for these firms provide are those which are, broadly speaking, already exploited to saturation point, i.e. there is scarcely a surplus of workers (or at least not a surplus of work-hours – admittedly something different). These are by no means the only NMW job types, but they constitute a significant proportion and are (at our current level of technology) extremely difficult to substitute for any kind of improved machinery. We aren’t yet at the stage where robotic androids could perform all the tasks a security guard or cleaner does.

If these agencies – subcontractors, beneficiaries of privatisation – were to collapse under wage bills, this does not therefore necessarily mean mass unemployment (except possibly on a very temporary basis) as the roles require being re-hired for as immediately as they are lost.

In a lot of cases this would presumably take the form of these out-sourced services being brought back in-house to the sites on which they are employed. This can be and often is in fact cheaper for site-owners as it cuts out duplicate management posts between the site-company and the outsourced company (both of which are paid for by the site-owner).

In short, it can work out cheaper in more ways than one to pay workers more. It is not necessarily as straight-forward as the article suggests. A living wage can be as much ‘living’ for the employee as it is for the employer.

Finally, and in my eyes most importantly, the article ends that ‘workers should replace the green demand for a “Living Wage” by the revolutionary demand for the “Abolition of the Wages System”.’ As I mentioned, in principle I agree. However, this simple sentence does injustice to the value living wage struggles have.

For myself the main and most important benefit of the London Living Wage is that it lifts workers and their dependents not only out of the deeper throes of poverty (though not completely altogether) but that it also lifts them out of the harshest insecurity and psychological vulnerability imaginable.

It is not a coincidence that those on the NMW are among the least likely to be unionised. I’m certain the SPGB understands the mechanism used by bosses in holding workers down through the wage system. In London, living wage struggles have galvanised workers’ organisations (especially grassroots unionisation), and have recently begun to really politicise workers. It instils consciousness.

If the wage system can be represented by the image of a boss stamping on a worker’s face, then the living wage might be removing the boss’s foot from the worker’s neck. She’s still going to get stamped in the face, but she’s a little freer to start fighting back.

The demand to abolish wage-slavery is certainly the most important one. However, in our current situation it is only through living wage struggles that any kind of meaningful revolutionary discourse can exist. The living wage question is the first line in this discussion which, if followed to its natural conclusion, ends by agreeing to overthrow exploitation altogether.

An interesting question Cooking the Books should ask is where, if at all, in this discussion the ‘transitional demand’ for a National Maximum Salary might be.

Joseph Robertson, 

London

Reply: … abolition of the wages system?

Let’s get one thing clear from the start. We have nothing against workers struggling for and getting higher wages if they can. We favour this, even if we think that ideally this should be tied to struggling to abolish the wages system altogether. Our members, as workers, join trade unions. So, we hope your campaign to get London employers to pay some of their workers more succeeds, even if we don’t like the term “living wage” any more than “fair wage”. There’s nothing fair about the wages system and we’re against people having to work for a wage to live.

Wages (and their other name, salaries) are a price – the price of the labour power, or working skills, that workers sell to an employer. Most people are forced by economic necessity to do this to get a living, to obtain the money to buy the things they need to live.

The wages system implies the division of society into those who own and control the means for producing wealth and who need to employ people to operate them and those who, owning no means of production, have to sell their working skills to them. It implies a class divided society. But more. Employers are not philanthropists. They only employ workers if they think there’s a profit in it for them. The source of their profits is the difference between what they pay their workers as wages and what they receive from the sale of what their employees produce. So, the wages system also implies exploitation, the extraction of unpaid labour from the workforce. That’s why there is not, and cannot be, any such thing as a fair wage.

The abolition of the wages system involves abolishing the class division of society by making the means of production the common property of everybody under democratic control. Then nobody will be obliged to work for someone else for a wage. Instead, the principle “from each according to their ability, to each according to their needs” will apply. People will co-operate to produce what is needed and then everybody will have free access to it to satisfy their needs, without having to pay. In fact money will have become redundant.

What we were criticising in the article was the proposal of a political party to increase the present legal minimum wage by over 40 percent and call the result a “living wage”. We pointed out that this was just another empty vote-catching promise which, even if implemented, wouldn’t have had the expected effects. We would have thought that it was generally accepted that higher wages do lead employers to introduce labour-saving machinery. An example of this in reverse would be how many garages have abandoned car washing machines as hand washing done by asylum seekers (probably getting less than the minimum wage) has become cheaper. You yourself concede that an imposed increase of the order proposed by the Green Party – by nearly £5k a year – could lead to an increase in unemployment for the lowest-paid, even if you think this would only be temporary.

We do not agree that “in our current situation it is only through living wage struggles that any kind of meaningful revolutionary discourse can exist.” These probably are producing an increased trade union consciousness among a section of the working class, but the struggle for higher wages and better working conditions (better conditions for the sale of labour-power) is not the same as socialist understanding of the need to get rid of the wages system altogether by bringing the means of production into the common ownership and democratic control of the whole population. That does not rise spontaneously out of the mere struggle for higher wages but requires the presence and activity of socialists to point this out directly.

Incidentally, for what it’s worth, Marx didn’t think much of such demands as “fixing the minimum wage by law”, which was one of the reform demands of the French Workers Party he had a hand in helping to set up in 1880. He wrote, referring to the proposer of this: “I told him: ‘If the French proletariat is still so childish as to require such bait, it is not worth while drawing up any program whatever.’” (Letter to Sorge, 5 November 1880, www.marxists.org/archive/marx/works/1880/letters/80_11_05.htm)

As to the demand for a “National Maximum Salary”, we don’t think that this is something that those who want to abolish the wages system should get involved in. The bloated “salaries” received by many top business people and government officials are not really the price of their labour power but a disguised way of getting a share of the surplus value extracted from the unpaid labour of the workers.

Editors.

Letter: Pete Seeger again (2010)

Letter to the Editors from the September 2024 issue of the Socialist Standard

Pete Seeger again

Dear Editors

For a nonagenarian, Pete Seeger sure possesses some staying power. First Roy Beat and now Stephen Shenfield (June and August issues) have gone into print, both missing the main thrust of the March article. Instead, they laser-in on my flippant swipe at the Left’s perennial practice of hijacking every convenient bandwaggon –”good cause” – to promote itself.

In no way was I “dismissing” or “belittling” the Civil Rights Movement as they suggest; merely noting its inbuilt shortcomings. A southern negro could, of course, be summarily lynched for much less than displaying revolutionary tendencies; a reluctance to step into the gutter or an admiring glance (“rape”) sufficing.

All of us abhor Capitalism’s myriad injustices and obscenities but recognise that the solution begins with a rational understanding of the root causes rather than an emotional piecemeal assault on their effects. Is this “Sectarian”? Having pored long and hard over my dictionary, I can only conclude that in commonsense everyday terms it’s nothing of the sort. Personally I’m happier with “Socialist”.

Andrew Armitage

Voice From The Back: All Things To All Men (2007)

The Voice From The Back Column from the November 2007 issue of the Socialist Standard

All Things To All Men

It is the nature of capitalist politics that you must pander to your audience. Thus in one week the late President Kennedy could declare to a German audience “I am a Berlinner”, to an Irish audience boast of his Irish descent and finish off in the USA extolling his American patriotism. Mitt Romney who is contesting the Republican primaries is using a similar ploy. “Whereas he once took on the powerful gun lobby, he more recently joined the National Rifle Association as a life member. Elected in Massachusetts as a strong supporter of gay rights, he now proclaims himself as a fierce opponent of same sex marriage.” (Times, 20 September) Obviously a man of principles. The main principle being “do anything to get elected”.

       

A Living Wage?

“The adult rate for the statutory minimum wage will go up from £5.35 to £5.52 and from £4.44 to £4.60 for 18-21-year-olds. The rate for 16 and 17-year-olds will increase from £3.30 to £3.40 an hour. Meanwhile, annual leave entitlement will increase from 20 to 24 days a year for full-time workers and will increase again to 28 days from April 2009. Employment Relations Minister, Pat McFadden, said: “These changes will improve the lives of millions of British workers, giving them more time with their families and ensuring our lowest paid workers continue to be able to earn a living wage.” (Guardian, 1 October) McFaddens “living wage” must seem laughable to politicians and big earners in the City. 17p an hour increase? Let the good times roll!

 

Now That’s Living

“The bonanza in boardroom pay has become even more spectacular, according to the latest figures from the accountancy firm KPMG. The typical chief executive of a FTSE 100 company has seen their total remuneration rise by 12 per cent in the past year, to reach over £2.6m. That’s four times the rate of increase in average earnings, leaving the business elite on pay over 100 times what most of their employees earn. In the case of those chief executives still in post, their income went up by 16 per cent, accelerating last year’s 9 per cent rise. The chief executive of one of the smaller FTSE 250 companies would expect to see a total package of just over £1m, up from £878,000 in 2006. Britain’s top corporate earner is probably still Bob Diamond of Barclays Capital, who took home £22.9m last year, including a performance-related bonus of £10.4m.” (Independent, 1 October)

 

We Hope It Is True

It is sad but true that it is almost impossible to lift up a newspaper without being informed about bad news. War, poverty and world hunger – it is the media’s daily ration of social problems. How welcome to read of this ray of sunshine in an otherwise gloomy press. “Outrage in cyberspace as the US Navy describes the MySpace generation as “alien life forces”. They spend their lives in front of screens meeting foreigners and are therefore less willing to sign up and kill them, a Navy study reports.” (Times, 2 October)

 

Not So Patriotic

At the Labour and Conservative Party conferences the drum was banged for patriotism. “British jobs for British people”, “this great country of ours”, “our proud British heritage”, and so on ad nauseam. In fact the British capitalists don’t care where they make their profits, if they can exploit workers abroad more profitably then that is what they will do, despite the cant spoken at political conferences. “Unite, the manufacturing trade union, yesterday accused Cadbury Schweppes of behaving like an “asset-stripping private equity firm” following the company’s announcement that it would shed 700 jobs by outsourcing chocolate production to Poland. Cadbury said it planned to shut its factory in Keynsham, near Bristol, by 2010, with the loss of 500 jobs, while 200 further posts would go in Bournville, in the Midlands, at the plant where it has been producing chocolate for almost 130 years. Much of the work done at the Keynsham and Bournville plants will be switched to the Polish company Wedel, which it acquired in 1998, Cadbury said, because labour and manufacturing costs would be much lower”. (Independent, 4 October)

 

The New Imperialists

It used to be that supporters of Chinese and Russian state capitalism decried the imperialism of the British Empire,. Today though it is a case of the kettle calling the pot black. “Today, emerging-market giants are fighting for oil, gas and metal ore in Africa as energetically as 19th-century European colonialists grabbed land on the continent. Recently, the Chinese have been the most aggressive, with more than 700 companies active in 50 countries, according to Standard Bank of South Africa. China is now Africa’s second largest aid donor and trading partner, behind the United States, with trade up fourfold to $40 billion since 2000. But Russia, the second most active emerging-market power in the area, is gaining. While trade with Africa is only $3 billion a year (up threefold since 2000), Russian companies flush with cash have sunk over $5 billion into buying up African assets since 2000— and that’s not counting $3.5 billion of oil exploration deals that will come online before the end of the decade.” (Newsweek, 15 October)

Letter: Socialism v the I.L.P. (1927)

Letter to the Editors from the November 1927 issue of the Socialist Standard

The following is a letter from a member of the I.L.P. :—

7/10/27.

To the Editor of the Socialist Standard.

Dear Sir,

I have been very interested in the discussions contained in the “S.S.” from time to time, especially between your Socialism and that of the I.L.P. I, however, fail to see any gulf between the objects of the S.P.G.B. and the I.L.P., and its kindred association. It, therefore, seems to me unfortunate that speakers of your party should be continually denouncing the representatives of working-class interests, and it would be better if they devoted their speeches entirely to making Socialists. I have before me the “S.S.” of September, 1926, in which you say (page 12) that “no fundamental change in the object and policy of the I.L.P., however, is dreamt of,” and later on “These champions of Nationalisation . . . would not solve the wages problem.” I will, and have only the time, to deal with these two points.

(1) Firstly, “no fundamental change” is necessary, as their object is, has been and always will be, to transfer the private ownership of land and means of production, etc., into social ownership. You are at liberty to criticise their tactics, but not their object. Advice from technical and economic experts must be taken in the transformation of society, and we must be assured that this advice is in the interest of the working-classes. These experts must be, then, of the working-class.

(2) Secondly, the I.L.P. fully recognises that the wages system has got to go, and here again, the method to be adopted must be one that will not injure the class whom they desire should benefit.

(3) It is obvious to you that the so-called “living-wage” proposals, in my opinion, are held out to the masses as so much bread and butter to them under the Capitalist system, and that by intensive propaganda, more support will be given to the party in order to conquer the political machine and to use it without inflicting too great a hardship on their supporters. For instance, if in one sweep, a Socialist party abolished interest, some of the people who would be hit the hardest are those who are trying to live on a starvation wage, plus a few shillings resulting from a small investment—say £200 5 per cent. stock. When it is a matter of principle, there must be no discrimination between one form and another.

(4) If you have any suggestion as to what a Socialist Party should do when it has been returned to power, and at the same time retain the confidence of its supporters, I should be glad to hear of it in your next issue alongside of this letter. Could you spare me the space, please?

I.L.P’er.

Ruskin House,

Croydon.

Our Reply.

For convenience of reply we have numbered four paragraphs with which we propose to deal.

(1) It is news to us that the I.L.P. propose to abolish private ownership. It will also be news to the I.L.P. The abolition of private ownership would involve the abolition of all forms of living by owning property, i.e., rent, interest and profit. Asked as recently as August whether the I.L.P. proposed to abolish “rent, interest and profit,” Mr. E. E. Hunter, Secretary of the I.L.P. Information and Research Department, replied in an official letter, dated August 22nd :—

“Many Socialists are in favour of their complete abolition, while others have held the view that complete abolition is not desirable.” (Of course, when Mr. Hunter writes ” Socialists,” he means here “members of the I.L.P.”)

The “Socialist Programme” published by the I.L.P. (1923) is more definite. Under the heading “A Socialist Programme for Industry,” it says (page 24) :—

“The present shareholders in mines and railways could receive State mines or railway stock based on a valuation and bearing a fixed rate of interest.”

Mr. J. R. MacDonald, in his “Socialism, Critical and Constructive” (page 274) says :

“When Labour uses capital and pays its market value, property is defensible . . .”

This may be the aim of “I.L.P’er,” but it is decidedly not Socialism.

(2) The I.L.P. will be equally surprised to learn that it. proposes to abolish the wages system. The constitution adopted at the 1922 Annual Conference states under “Political and Industrial Democracy,” that the “basis of industrial democracy must be the organisation of the wage and salary earners.” (See the “Story of the I.L.P., page 20.)

(3) “I.L.P’er” believes he knows why the I.L.P. advocates its “Living Wage Policy.” We do not know that, but we do know that Socialism is not going to be introduced by a political party which has been placed in power for some other purpose by electors who are not Socialist. If “I.L.P’er” will recall the administration of Capitalism by the Labour Party in 1924, or the experience of various Labour Governments (e.g., New South Wales in September of this year) he will perceive that when electors find themselves deceived by a political party which fails to carry out its promises, or which goes beyond its mandate, they express their disapproval by voting against it at the first opportunity. It is interesting also to recall that the Labour Party in office appealed to the miners not to embarrass it by asking for more wages, and threatened striking transport workers with the Emergency Powers Act. That seems to us to be a curious way of expressing the I.L.P.’s enthusiasm for a living wage. (As well over 50 per cent. of the Labour M.P.’s at that time were I.L.P. members, the I.L.P. is fully accountable for all of the anti-working class actions of MacDonald’s Ministry.

(4)”I.L.P’er” here overlooks the important point that Socialist Party candidates will only be elected to the House of Commons on a Socialist Programme (not on a programme of Capitalist reforms), by a Socialist electorate (not by electors who want a living wage, or family endowment, etc., etc.) and for the single purpose of establishing Socialism. The only way of retaining the confidence of a Socialist electorate will be to work for Socialism just as it is now true that the only way I.L.P. M.P.’s can retain the confidence of their non-Socialist electorates is to work for everything other than Socialism. If Socialist M.P.’s fail to do the work for which they are elected, the voters will get rid of them at the first opportunity.

Edgar Hardcastle

Will Family Allowances Cure Poverty? (1941)

From the October 1941 issue of the Socialist Standard

After the last war perhaps the most popular reform proposal and one that was most attractive to the workers was the plan to have a national minimum wage below which no worker should be paid. The Labour Party supported it and the Independent Labour Party carried on much propaganda for a more elaborate scheme called “The Living Income.” It lost its popularity particularly after the Labour Government would have nothing to do with it. Now its place has been taken by the growing popularity of “family allowances,” the payment of grants by employers or the State to help support the children of working class families. Since it is popularised in the form of an addition to existing wages it has a specious attractiveness. Every mother who thinks that she will have more to spend on her children is inclined to support the scheme. Indeed it may be conceded that if it were introduced at least some families with a very small income might be better off, at least for a time. But what of the wider aspects ? Will it raise or help to raise the working class as a whole out of poverty ? Will it even be a permanent gain for those who are better off at first ? Will it mean an addition to the wages of the working class or only a redistribution of the total amount of wages among the workers, so that some gain and others lose? Will it strengthen the trade union efforts of the workers in their struggle against the employers or will it weaken them by setting the married against the single ?

We can get an answer from the actual experience of capitalism and from the more candid admissions of the advocates of the scheme.

The broad answer is that any change which lowers the cost of living for the workers immediately produces a tendency for wages to come down accordingly and experience of family allowance schemes show that they are no exception. Vibart in his “Family Allowances in Practice” quotes the statements of continental trade union officials based on their experience. He writes : —

“All these statements tend to suggest that the allowances have been and are regarded as a part of labour’s remuneration and that the idea of “more allowance, less wage,” was familiar to many of the employers and was carried into practice by some of them.”

Mr. L. Ross, of the Australian Labour Party, using the experience of family allowances in Australia, wrote that—

“The new South Wales Scheme instead of redistributing wealth actually meant a reshuffling of wages between single and married men”.—(Socialist Review, December, 1928.)

When the advocates of family allowances gave evidence before the Royal Commission on the Civil Service in London in 1930 they were quite prepared to consider providing the allowances “by a small reduction in the salaries either of men or women.” The question Socialists would put to all of the advocates of family allowances is this: If the object of the allowances is to abolish the poverty of a section of the workers, as it is claimed to be, and since Socialism alone will abolish poverty entirely, why are they opposed to Socialism? To the workers in general we say : “Which do you prefer, capitalism plus the palliative of family allowances or Socialism under which all such palliatives will be unnecessary ?”

Editorial: Is the Living Wage sound? (1927)

Editorial from the March 1927 issue of the Socialist Standard

“The Living Wage” is a pamphlet written by H. N. Brailsford, J. A. Hobson, A. Creech Jones and E. F. Wise, and published by the I.L.P. It takes the form of a report submitted to the National Administrative Council of that party.

The opening chapter is entitled “The place of Wages in a Labour Strategy,” and is chiefly concerned with an attempt to strike a balance between the industrialists, on the one hand, and the political socialists, so-called, on the other. The latter, we are told, hope to tackle the problem of a living-wage, gradually, by nationalising, as occasion offers, the more essential industries one after the other.

“The New Leader,” 21.1.1927, page 7, devotes a column to proving that nationalised industries are run on business lines equal to anything under private enterprise. Expenses are cut down to a minimum, both in the number of employees and the wages paid. It would appear, therefore, that the I.L.P. have sufficient evidence to prove that the workers under nationalised institutions are no better off than those under ordinary capitalist concerns. At any rate, the enquiry now going on into the question of wages and conditions of Post Office employees should cause them to hesitate before accepting nationalisation as a means to raise wages or improve conditions for the workers.

But the writers of this pamphlet do not base their ideas on facts. To them nationalisation stands for Socialism, and Socialism stands for State control of all industries. According to them the workers remain wage-workers, living by the sale of their labour-power, whatever changes may take place; consequently they say :

“That to nationalise important industries in conditions which resemble those which prevail to-day would be a disappointing and even perilous proceeding.” (p. 3.)

We can now see the necessity for “labour strategy,” industries must only be nationalised by a Labour Government, when the possibility of raising wages will gain for them additional political kudos. How futile, even, such a policy as this would be is shown by the writers themselves :

“The industry of coal-mining is overmanned, and is carrying to-day a burden of surplus labour of anything over 100,000 men. A national administration would have to make its choice. It might maintain the uneconomic pits, risk the consequences of over-production, and continue to carry the burden of this surplus labour. In that case, it would either pay low wages or require a subsidy. The other alternative before it would be to close down the uneconomic pits and turn a big body of men adrift.” (p. 4.)

Exactly ! A Labour administration, neither elected for, nor understanding Socialism, would have to face the same responsibilities as the present capitalist Government. They would have to ensure the normal working of the system, including the exploitation of the class they pretend to represent. They could not excuse themselves for extravagance in administration because they have always preached economy in this respect in the workers’ interests. To the industrialists the writers say :

“Labour when it sells itself as a commodity in the market must usually accept a price which varies according to its scarcity.” (p. 6.)

While this statement is incomplete and unscientific in itself it is, nevertheless, an admission that wages are not determined by “public opinion” or “ethical principles that have been generally accepted.” In the body of the pamphlet there is a good deal of absurdity along these lines. All that kind of sentimental nonsense vanishes before their grudging admission that :

“In the last resort it is on the organised refusal of men to work for less than a living wage that our hope of securing it lies.’ (p. 7.)

It will be seen from the quotation in reference to coal mines that the writers appear to be impressed with the idea that capitalists are confronted with grave difficulties in the business of making profits. Hence a large portion of the pamphlet is devoted to assisting them with advice on (1) the reorganisation of industry, and (2) how to create a market.

It is now generally accepted that the enormous increase of unemployment in recent years is due to the extended application of machinery and labour-saving devices and methods. Yet the writers specifically stipulate that reorganisation of industry and mass production is a necessary condition of higher wages. They ignore the fact that in order to pay higher wages numbers of workers must be dismissed. They admire American methods, especially Ford’s, and seriously advise British capitalists to follow suit. They use the following figures as evidence of American prosperity :

“Mr. Hoover, in the annual report of his department for 1925, has published an official analysis of American prices and wages. Taking 100 as the index of the year 1913, he shows that wholesale prices had risen in 1924 to 150, while wages had risen to 228.” (p. 48.)

To understand the significance of this quotation we must first of all recognise that the workers’ improvement does not commence until his wages have reached the 150 mark. Moreover, he must buy his necessaries at retail prices, which will be much higher. The difference in 1924 was, therefore, only 78 minus the difference between wholesale and retail prices. However, this difference applies to the average worker when lucky enough to be employed. No account whatever is taken of unemployment and its increase resulting from the reorganisation. When reckoning the workers’ share of the national income, the writers should have expressed it as a proportional fraction of the total and not as the average wage of those workers lucky enough to be fully employed.

The facts regarding the Ford methods and the relation of production to wages were dealt with in the S.S. for December, 1926, and need not be repeated here. These facts show conclusively that mass production everywhere returns far less in wages per unit of production, and that it depends upon progressively doing this for its success as a business concern.

The contention of the writers that the higher wages of mass production constitute a market, becomes a myth when we realise that the total wages bill is actually reduced by this method.

The writers, however, do not rely entirely on reorganisation to bring about their eldorado. They have two further reforms. First, “An enlightened credit policy,” and second, “family allowances.” The object of the first, we are told, is to stabilise prices and employment.

“At the first distant signs of a slump, it must be the duty of the bank slightly to expand the volume of credit and to lower its price; at the first distant signs of a boom, it will gently apply restrictive measures. Our assumption is that in this way the price level can be kept steady, and the general level of employment constant.”

Their object is clearly stated. It is to wipe out the fluctuations in trade ; to reduce trade and consequently production and employment to its mean level. But there is no more water in the sea when its surface is calm than when it is boisterous. Trade is not increased by restricting it when it is inclined to rise and encouraging it when it flags. The volume remains the same. It is only the fluctuations that have been wiped put.

The second reform is easily seen to be useless as a means to increase the purchasing power of the workers. Capitalists and capitalist governments understand business methods too well to be induced to pay for the same thing twice over. If they keep the children by increased taxation through the State machinery, wages can be reduced to the cost of keeping man and wife.

This is clearly shown in the pamphlet under review. A scheme drawn up by an Australian Federal Commission is instanced. The Commission estimated the weekly sum necessary for a family of 5 persons to be £5 16s. When it was shown by the Federal Statistician that such a sum would absorb all profits, the Commission reviewed their figures and suggested a wage of £4 for man and wife with an allowance of 12s. for each dependent child.

Here, then, is an actual case, quoted by the writers themselves, where a Commission evidently favourably inclined towards the workers, did exactly what the capitalist would be expected to do. Moreover, it is obvious that the writers have this result in mind all the time. They say :

“It is important to note that family allowances provide the only hopeful method of realising the ideal of ‘equal pay for equal work’ as between women and men. There would, for example, be no reasonable objection to equal salaries for men and women teachers if the children of married teachers were provided for in this way.” (p. 26.)

In other words, the salaries of men teachers could be reduced to the level of women if they were relieved of the responsibility of keeping their children.

The net result of the three reforms : reorganisation of industry, stabilisation, and family allowances, so far as the workers are concerned, is a balance on the wrong side. Reorganisation increases unemployment, stabilisation does nothing, one way or the other, while family allowances merely reduce the employers’ wages costs.

But the futility of the reforms is nothing compared to the harm done to the workers by the publication of the work. Apart from the confusion it engenders, the real relations of capitalists and workers, the class antagonism, is glossed over and smothered. It puts on one side the opposing interests of the two classes and holds out the bait of a prosperous industry that will enrich capitalists and keep the workers fully employed.

It is an attempt to persuade the workers that it is possible so to reform the capitalist system that there will be no occasion to work for its abolition. Under mass production, stabilisation, and family allowances, the workers would find their interests identical with their masters’. Yet the writers of this work call themselves “Socialists.” If they have not written it with the deliberate intention of confusing the workers, they should begin at once to try and understand what Socialism means.

Cooking the Books: What’s a “Living Wage”? (2010)

The Cooking the Books column from the June 2010 issue of the Socialist Standard

 “A ‘Living Wage’ for all”, alongside a photo with the caption “Fighting the growing gap between rich and poor”, was the heading of the first election promise of the candidates of the Green Party in last month’s general election :

 “Green MPs will demand a ‘Living Wage’ to ensure low paid workers earn enough to provide for themselves and their families.”

 It’s an old demand, going back to the ILP in the 1920s and beyond. Presumably what the Greens have in mind is a wage that would allow a worker to afford decent housing, enough proper food, new clothes, to go on holiday and run a car (but perhaps not this last, as they’re Greens).
 
 To find the level they consider necessary to achieve this you had to go to their full manifesto where they say :

 “The Green Party will fight for a National Minimum Wage of 60% of net national earnings (currently this would mean a minimum wage of £8.10 an hour).”

 As the current minimum wage is £5.80 an hour what they were proposing was a massive 40 percent increase, a promise that put them up with the Trotskyists. In fact they were promising more than the ‘Trade Unionist and Socialist Coalition’ between Militant and the SWP which only promised an increase to £8 an hour.

 Even so, £8.10 an hour for a 40 hour week is only £16,848 a year, which hardly qualifies as an adequate “living wage”. But how’s it going to be implemented? Getting employers to increase the wages of anyone paid less than £16,848 a year to this is easier said than done. The unions haven’t been able to do it, otherwise it would have been done. But let’s assume for a moment that a law forcing them to do this was passed. What would happen?

 First, some employers would go bankrupt. Others would withdraw their capital from producing certain goods or services, so their price would rise. Eventually this would stabilise at a new, higher level at which employers would be able to make a profit even when paying the increased minimum wage. So the cost of living would go up, including for workers on the minimum wage.

 Second, given the increased labour costs, the introduction of previously unused labour-saving machinery would become cheaper vis-à-vis employing living labour. Employers would do this. So there’d be job losses and unemployment, particularly amongst the unskilled, would grow.

 Also it’s not clear how the Greens’ plan would reduce the gap “between rich and poor”, at least not between those who figure on the Sunday Times Rich List (25 April) and those on the minimum wage. It might reduce the gap between low-paid and higher-paid workers, but this would just be a change within the working class – what we socialists have always called a “redistribution of poverty” – which would not affect the gap between the income of the working class and that of the capitalist class.

 In any event, socialism is not about redistributing income and wealth from the rich to the poor, but about establishing a society that would not be divided into rich and poor. To adapt Marx, workers should replace the green demand for a “Living Wage” by the revolutionary demand for the “Abolition of the Wages System”.

Cooking the Books: Boris’s Gift Nag (2020)

The Cooking the Books Column from the February 2020 issue of the Socialist Standard

‘Boris Johnson to raise minimum wage four times inflation’ was how news agencies reported the government’s decision, announced on 31 December, to accept the Low Pay Commission’s recommendation to increase the minimum wage for over-25s from £8.20 to £8.72 an hour from the beginning of April. What is this? The world turned upside down with a Tory government bringing in a 6.2 percent wage increase by decree?

Not really, as all is not what meets the eye. The Cameron Tory government had already adopted the long-term aim of reducing the wage subsidy to employers represented by the tax credit scheme that makes the income of the lowest-paid workers up to the poverty line. Shifting the burden back on to employers was to be achieved by gradually increasing the minimum wage since as a person’s income increases so their tax credit payment goes down.

Marx didn’t think much of minimum wage legislation. In 1880 some members of the newly-formed French Workers Party came to London to ask him to help draw up their election programme. It consisted of two parts, the long-term aim of socialism and a list of immediate demands. Afterwards Marx wrote a letter in which he said that the second part included ‘some trivialities which Guesde found it necessary to throw to the French workers notwithstanding my protest, such as fixing the minimum wage by law, etc (I told him: “If the French proletariat is still so childish as to require such bait, it is not worth while drawing up any program whatever”)’ (LINK). Presumably he felt that it went too far as a vote-catching bait as it was unrealistic and unenforceable.

Maybe it was at the time but nowadays most developed capitalist countries have such laws. In 1999 the Blair Labour government introduced a national minimum wage (previously this had existed only for some sectors such as for agricultural labourers). In 2015 the Tory government renamed the rate for over-25s the ‘National Living Wage’ (NLW). Probably it has prevented some workers in industries where it is hard to organise effective trade unions from being paid less than the value of the low-grade labour power their employers seek, even though it will have rendered some others unemployable.

In its report on the application of the law in 2019, the Low Pay Commission listed reactions by employers to increases in the NLW: taking a cut in profits, seeking to increase prices, introducing automation, and increasing work intensity. These are the same as to any wage increase, whether imposed by law, trade union pressure, or tight labour market conditions.

The Commission noted that ‘absorbing some or all of the cost of the NLW through a reduction in profits was often the most common response’. This would be a sign that competitive conditions didn’t allow a price increase; the Commission itself noted that some businesses ‘do not have this option, whether because of market structures or reliance on government funding’. So much for the myth that wage increases cause rising prices.

Worrying from a worker point of view, but par for the course, is the fourth option of work intensification:

  ‘Employers reported expecting more flexibility and effort from staff, adding tasks to job roles and raising performance standards. Workers told us of the increased pressure they have come under from such changes.’ (tinyURL.com/t77l89t).

The working for wages system is a trap from which there is no escape. What you get from one hand is often taken away by the other. No wonder Marx urged trade unionists to work for its abolition.

Living on Low Wages (2019)

From the August 2019 issue of the Socialist Standard

In 1865 Karl Marx advised workers to drop the conservative motto ‘A fair day’s wage for a fair day’s work!’ and instead advocate the abolition of the wages system. Over a century and a half later, reformers are still ignoring Marx’s view, and the Living Wage Foundation campaigns for ‘the simple idea that a hard day’s work deserves a fair day’s pay’. In June the Foundation made a submission to the Low Pay Commission, from which the following information is taken.

The Living Wage (or real Living Wage) is set above the legal minimum, and is intended to enable workers to make ends meet; it is currently £10.55 an hour in London and £9 an hour in the rest of the UK. Over one-fifth of workers receive less than this. Insecure work is a major part of the problem, and it was recently reported that one worker in ten (4.7 million people) now works in the precarious gig economy (Guardian 28 June).

Low pay affects some groups of workers in particular, such as bar staff, waiters, sales assistants and care workers. Some parts of the country (Northern Ireland, East Midlands and Wales) are considerably above the average for the proportion of low-paid workers. More women then men are paid below the Living Wage, and the figures are also higher for disabled workers and those who are black or of Bangladeshi or Pakistani descent.

Workers aged under 25 are only entitled to the minimum wage (£7.70 an hour for someone aged 21 to 24), while those over 25 must be paid the national living wage of £8.21 an hour. The report makes it clear that paying the legal minimum leaves workers struggling to keep their heads above water: ‘A full time worker earning the government’s “national living wage” currently earns over £1,500 a year less than they would on the real Living Wage – equivalent to over a year’s average gas and electricity or three months’ average rent.’ It is also claimed that paying the Living Wage benefits employers too, in terms of workers performing better and there being less turnover of staff. Nevertheless, most FTSE 100 companies have not undertaken to pay this rate.

What all this shows is that twenty-first century capitalism cannot provide decent living standards for most workers. Low pay and insecurity, not to mention the risk of unemployment, make their lives a constant struggle to keep going. All those years ago, Marx certainly had the right idea.

Paul Bennett

Voice From the Back: The Need For Socialism (2013)

The Voice From the Back column from the December 2013 issue of the Socialist Standard

The Need For Socialism

For the best part of [20] years Chrystia Freeland worked at the Financial Times and Reuters, so when she writes a book entitled Plutocrats: The Rise of the New Global Super-Rich she has a fair idea of the subject. According to a book review by John Arlidge she has some revealing facts about the rich. ‘These people have become richer. Not just a bit richer. But profanely richer. The top 10% of Americans, for instance, receive half the nation’s income. Freeland shows that inequality in Europe is rising sharply too, and points out how the rules of the economic game have been rigged to favour the rich’ (Sunday Times, 27 October). The reviewer points out the book is stronger on the whos, hows and whys of the rise of the new global super-rich than it is on whether we should (or can) do anything about this inequality. From a socialist perspective we can, we should and we will do something. We will abolish it.

A Heartless Society

With gas and electricity prices rising a survey for Age UK found that 28 percent of pensioners said their main concern for the coming cold months was ensuring they could heat their homes. ‘The charity said the figures suggested the problems could affect as many as three million older people across the UK. Age UK also raised the alarm over the health dangers to the elderly people, warning that cold weather and poorly heated homes increased the risk not only of influenza but also of heart attack and stroke. There are about 24,000 excess deaths in a typical British winter, many of them preventable’ (Independent, 28 October). Britain is one of the most developed countries in the world yet it condemns millions of old workers to this health hazard.

A Pathetic Existence

The number of people who are paid less than a ‘living wage’ has leapt by more than 400,000 in a year to over 5.2 million, amid mounting evidence that the so-called economic recovery is failing to help millions of working families. ‘A report for the international tax and auditing firm KPMG also shows that nearly three-quarters of 18-to-21-year-olds now earn below this level – a voluntary rate of pay regarded as the minimum to meet the cost of living in the UK. … According to the report, women are disproportionately stuck on pay below the living wage rate, currently £8.55 in London and £7.45 elsewhere. Some 27% of women are not paid the living wage, compared with 16% of men. Part-time workers are also far more likely to receive low pay than full-time workers, with 43% paid below living-wage rates compared with 12% of full-timers’ (Observer, 3 November). This so-called ‘living wage’ condemns millions to a pathetic existence inside capitalist society.

Queuing For Handouts

Academics were commissioned by the Department of Environment, Food and Rural Affairs (DEFRA) to carry out an evaluation of the evidence on the use of food banks and soup kitchens in England. ‘The study, by a team based at Warwick University, was completed in March. It is understood to show a surge in food bank use with twice as many people turning to them for free food in 2012 as in 2011. The report is expected to blame the soaring cost of food; prices have risen by an average of 30% in the past five years, while average incomes have remained frozen’ (Sunday Times, 3 November). Users of these facilities are typically given three day’s worth of nutritionally balanced, non-perishable food. They must be referred by doctors, social workers or some other officials. This is the plight of a growing number of workers. Cap in hand, begging for food in a so-called advanced economy. Capitalism stinks.

Poisoned By Profit

One of the most rapid examples of the industrialised advance of modern capitalism is China. However, the Chinese workers must pay a terrible price for this advancing industrialisation. ‘The number of lung cancer cases in the Chinese capital Beijing has soared over the last decade. According to figures published by the state-run Xinhua news agency, they have increased by more than 50%. Beijing health officials say smoking is still the number one cause of lung cancer, but they admit air pollution is also a factor. The World Health Organization (WHO) recently estimated that polluted air kills millions of people every year’ (BBC News, 9 November). In their smog-polluted cities the advance of lung cancer is the inevitable outcome of the mad drive for more and more profits.

Gaspers: Patriotic Fervour (1967)

From the August 1967 issue of the Socialist Standard

A boom in the sale of American flags was reported today by the Wall Street Journal. This is attributed to the fighting in Vietnam and the normal wartime increase in patriotic fervour . . .  (Daily Telegraph, 4/7/67.)

#    #    #    #

I was almost stunned by the Foreign Secretary’s statement. Once or twice I thought I was listening to myself.” (Duncan Sandys in the debate on Aden. House of Commons, 19/6/67.)

#    #    #    #

‘‘We thought just because we’d passed the Education Act and the National Health Service Act we’d ended poverty but we hadn’t done anything of the kind.” (Professor Richard Titmuss, Sunday Times, 9/7/67.)

#    #    #    #

“. . . the Ministry regards it as important that every working man should have a living wage, but the difficulty is defining a living wage.” (Roy Hattersley, Parliamentary Secretary, Ministry of Labour, House of Commons, (10/7/67.)

#    #    #    #

“All these arguments, remember, were based on the Bible. Thank God, in most of those issues wiser counsels have prevailed.” (The Rev. W. Grahame Bailey, at the general assembly of the Church of Scotland. The Times, 24/5/67.)

"A Living Wage." I.L.P. Moonshine (1925)

From the June 1925 issue of the Socialist Standard

Now and again our opponents forget themselves and tell the truth, but they do not point out the harm that has been done by their previous deviations from the truth.

The Independent Labour Party has kept the workers' attention fixed upon questions of Taxation, Credit Banks, Nationalisation, and a thousand and one other things in which the remedies proposed would bring no appreciable improvement in the general position of the workers.

In the course of the Editorial Article (New Leader, 17/4/25) dealing with the I.L.P. Conference, the editor writes :

  "On this broad problem we propose to concentrate the mind and will of the Labour movement. Men, if they are to fight in a solid phalanx, must fix their thoughts on a simple issue. You cannot rally the masses for a banking policy or an elaborate scheme of industrial re-organisation. You can rally them to the simple demand for a living wage.''

The writer goes on to state that he knows the demand is an impossible one but that the move is a strategical one "to require every industry which fails to pay wages on this basis to submit to reorganisation and control."

Let us first of all take note of the proposed change in the I.L.P. policy. It, also, has fallen a victim to the "United Front" and "Strategy" fevers. Previously, as mentioned above, the traditional policy of the I.L.P. has been the backing of all kinds of schemes as part of the "step by step progress to Socialism"; now it is waking up to the fact that a simple single issue is better than an assortment of complex issues. But what an issue has been chosen! A Living Wage! The idea is almost a century old and the I.L.P. has not got beyond it get. What is the objection to "Socialism" as the single simple issue? Surely that would be an issue worth fighting on. Why, then, is it not proposed? The answer is simple. The I.L.P.'s idea of "Socialism" is a vast and complicated system of state ownership, in which credit banks, money, and other trading impedimenta would flourish. The members of the I.L.P. are too hide-bound by their own "step by step" ideas to grasp what Socialism really signifies—wealth produced, distributed, and enjoyed communally, without the intervention of money, credit instruments or any of the other rubbish essential to a trading world.

The editor of the New Leader would have people believe that the reorganisation of industries to guarantee a living wage to the workers in such industries would be a relatively simple matter. But would it? First of all there would be committees and conferences to define a living wage; after which there would be interminable discussions as to what was a living wage in a particular industry and in a particular district, and so on. The net result of which would be the provision of fat jobs for unemployed labour leaders like Hodges and opportunities for "statesmanlike" speeches from decoy ducks like Thomas.

Surely the workers have had enough of "controlled industries" during the last ten years or so to knock all such balderdash out of their heads for ever. But then the I.L.P., the Labour Party, and similar organisations do so love committees and conferences with the masters—it is such a nice gentlemanly-way of proceeding, it develops social intercourse and breaks down class barriers between masters and leaders, and, above all, there is no immediate fear of anything really serious happening to disturb the peaceful, placid step by step progress down the incline to the grave of all hopes.

However, the final and sufficient answer to all who propose such remedies is that capitalism itself nullifies whatever advantages might accrue by worsening the general condition of the workers. It is not suggested that all who live should have a living wage, but that the workers should have a living wage; in other words that those in employment should have a living wage. Let us see how the business would work out assuming that the point were conceded.

First of all we take it that, broadly-speaking, a living wage means a wage on which people could live with a certain amount of comfort: pay the average rent demanded, get a sufficiency of nourishing food, have the small luxuries necessary to make life worth living, be able to give their children the necessary education and leisure, and be able to take an annual holiday to freshen and rebuild a jaded physique.

Once such a wage was conceded the employers would immediately receive an extra impetus to look around for ways and means to lower production costs. Machinery that low wages now render unnecessary would be introduced, fresh machinery invented, waste as far as possible eliminated, industries amalgamated to cut out waste connected with competition. The result of this process (a process that is always going on but receives an extra push now and again) would be a reduction in the numbers of workers employed and an increase in the already huge quantity of unemployed. A small group of workers would be more comfortable at the expense of greater misery for the mass.

In other words attempts at bettering the conditions of the workers, while retaining the wage system, act, as a rule, as incentives to the capitalists to lower production costs by methods that worsen the general conditions of the workers. The only, and the simple, solution is the introduction of Socialism.

Gilmac.

The Case Against The 'Living Wage'. (1931)

From the March 1931 issue of the Socialist Standard

Maxton's Curious Mixture.

On February 6th, Mr. Maxton, on behalf of the Independent Labour Party, introduced into the House of Commons a Living Wage Bill. -

The Living Wage, as defined in the Bill, "means a wage at least sufficient to meet the normal needs of the average worker regarded as a human being living in a civilised community, including the satisfaction of reasonable minimum requirements of health and efficiency and of cultural life and the provision of reasonable rest and recreation."

The amount of this living wage is to be determined by a Committee, appointed by the Board of Trade, "and which shall include among its members at least three working housewives, three representatives of trade unions, and three representatives of co-operative societies.”

The Committee is to take into account "actual retail prices and other costs of living,” in addition to various other factors, and is to review the wage at least once a year. 

The wage is then to be made obligatory on Government departments, local authorities, Government contractors, and finally on all industries. That is to say, no industry may pay less than this minimum. Should any industry not be able to afford the wage, a body called the "National Industrial Reorganisation Commission” is to have power to re-organise the industry.

The I.L.P.'s Main Plank.

Mr. Maxton explained in his House of Commons speech that the living wage proposals are the basis upon which the whole programme of the I.L.P. is built up. The programme includes many items, from increased pensions and increased unemployment pay, to nationalisation of the banks and the principal industries, and State control of the import and export trade; but "this proposal for a living wage is a pivotal proposal round which all the others are arranged.”

Miss Jennie Lee, M.P., whose name also appears on the Bill, went further and admitted that the "pivotal proposal” cannot be applied without the other proposals also being applied. She said :—

  I do not pretend that this Bill could be carried into effect without great stress and great difficulties in the country. I believe that it would mean that we should have to go in for controlled prices, and once we got on to controlled prices we shall have to control the banking system.

Let us now examine the theory behind the Living Wage Bill and ask ourselves whether its effects will be worth the time and trouble necessary to apply it. Is it worth the "great stress and great difficulties,” together with all the further measures which Miss Lee admits are necessary?

What is a Living Wage?

The backers of the Bill claim to have defined a living wage. But have they? What are "normal needs”? What is an "average worker regarded as a human being”? What are the "reasonable requirements of a civilised community”? What amount of rest and recreation are "reasonable”?

The employers regard as "reasonable” any wage which makes the worker an efficient producer of profits. Hundreds of thousands of workers in the cotton mills, on the railways, in the Civil Service and Post Office, on the land and in the mines, are getting well under 40s. for a full week's work. Miss Dorothy Evans, Secretary of the Association of Women Clerks, is reported in the Daily Herald (February 19th) as stating that women clerks in the Civil Service, 21 years of age, are paid as little as 24s. 7d. in the provinces and 31s. in London. The Daily Herald on February 17th reported that the pay of farm workers in Suffolk had just been reduced from 30s. to 28s. a week.

This last case is of special interest because agricultural workers already have their “living wage” fixed by law! The Agricultural Wages Act, 1924, passed by the Labour Government (which the I.L.P. claimed was an essentially I.L.P. Government) lays it down that the minimum wage paid to an able-bodied agricultural worker shall be

   adequate to promote efficiency and to enable a man in an ordinary case to maintain himself and his family in accordance with such standard of comfort as may be reasonable in relation to the nature of his occupation:

Translated into hard cash, this means 28s. or 30s. a week!

All Mr. Maxton proposes to do, in effect, is to substitute his nebulous phrase for the nebulous phrase in the above Act, and apply it all round.

Employers To Fix The Wage.

The Bill provides that the wage shall be fixed by a Committee including working women, trade unionists and co-operative society representatives.

The Bill does not say how many persons the Committee shall consist of, nor does it say what other interests are to be represented. It is, however, to include employers.

When the seconder, Mr. Kirkwood, M.P., was asked if employers are to be excluded, he replied, “They are not excluded ” (Hansard, February 6th, col. 2297).

So we have this extraordinary position put up by a so-called working-class party, the I.L.P., that they want the employing class to have a hand in fixing what is a living wage for the workers whom they exploit!

It will be noticed, also, that the co-operative societies are expressly brought in. Why? Does it need legislation to allow the co-operative societies to pay their own employees a living wage? The co-operative societies constantly have strikes and lockouts in their concerns, and have on several occasions been charged by their employees with paying less even than the standard rates of pay. Within the past few months there has been a strike of co-operative employees—the insurance agents. Yet the I.L.P. wants the co-operative societies, with their characteristic petty employer's outlook, to sit,with other employers on the Living Wage Committee. The extent to which the co-operative societies exploit the workers in their employ is shown by the amount of wages, and the amount of profits. The retail distributive societies in 1929 (see New Leader, February 6th) paid an average amount of £130 during the year to its wage-earning and salaried staff. The surplus left after meeting all trading expenses was over £22 million pounds, equal to a further £148 per head of the staff of 176,000. They could double the wages of their workers and still have a surplus. Why does not Mr. Maxton start his living wage campaign among his friends, the co-operators?

Another important point emerges from the composition of the Living Wage Committee. It is usual on committees of this kind for the Government to appoint equal numbers of workers’ and employers’ representatives, together with some so-called "neutral” members representing the Government. Seeing that the Labour Government during their present term of office have appointed at least two wage committees which have recommended lower wages, it certainly cannot be assumed that Labour Government representatives on a Living Wage Committee would press for a wage higher than present wages. On the other hand, the co-operators who would be there to look after their own interests as employers are regarded by Mr. Maxton as being on the workers’ side. So that in fact the Living Wage Committee will be dominated by employers.

Living Wage or Lower Wage?

How much will the minimum wage be? We are given some indication that it will actually be lower than the present average wage of industrial workers.

Miss Eleanor Rathbone, M.P., the enthusiast for lower wages by means of family allowances, gave her conditional blessing to the Bill, but wanted to be assured that the wage would not be enough to keep a family, but only enough to keep a man and wife. Miss Jennie Lee, M.P., gave the desired assurance (Hansard, February 6th, col. 2313). The effect of this is obvious, and it is the effect which Miss Rathbone makes no secret of desiring. It would mean that all unmarried and childless workers would be paid less than the standard rate of wages—to the benefit of the employing class, who would get a supply of cheaper labour. In view of the composition of the Committee, the “living wage” might well be below the present average wage of industrial workers.

The Australian Model.

A memorandum attached to the Bill refers to the Australian attempts to fix and apply a “living wage.” The reference is interesting, because it gives a practical illustration of the futility of the whole scheme. In Australia a “living wage” was fixed before the war, and the scheme has had a run of about twenty years.

Mr. Maxton claims for the living wage proposal that it would permanently raise the standard of living of the workers, and be a definite step towards Socialism. Australian experience shows that it does neither.

In the Australian Senate, on November 14th, 1930, Senator Daly, for the Government, gave the information that, after allowing for the increase in unemployment and the increase in prices, the average real wage in 1929-30 was almost exactly the same as it was in 1911-12. Then in January of this year the Arbitration Court ordered a reduction of 10 per cent. in the basic wage (see Daily Telegraph, January 23rd). This reduction is quite separate from the regular adjustments for alterations in the cost of living. So that after twenty years of “living wageism” the Australian workers are now 10 per cent. worse off than when they started, and are not one iota nearer to Socialism than they were then. That is how capitalism has worked havoc with all the pretty but false theories of the Australian reformers of capitalism. Capitalism here would quickly falsify every one of the flashy. promises of the I.L.P.

Capitalism and Wages.

The living wage scheme is as full of holes as a sieve. Every attempt to fix a statutory wage has run up against the snag of unemployment. If the living wage is not higher than the existing one, it is useless. If it is higher, it will give the employers an added inducement to instal labour-saving machinery and thus increase unemployment. This tendency to instal machines operates in agriculture to-day, in spite of the low level of wages fixed by the Wages Committees.

How is the living wage to be enforced? Anyone who has seen at close hand the operation of the Agricultural Wages Act knows that in many districts the minimum rates are largely ignored. The men prefer to take less than the minimum rather than lose their employment. What remedy has the I.L.P. to offer for that? What will it do with the older men and, those not up to the average standard of fitness who will be sacked to make way for young and fit workers?

It is no answer to say that the I.L.P. also proposes to nationalise various industries. State capitalism, as applied in the Post Office, leaves the worker subject to practically all of the forces which face him in private capitalist concerns. The process of selection and throwing out the less fit men and women goes on in the Post Office as on the land and in the mines and elsewhere, although in the Post Office the method of securing the same end is slightly different. The workers in State industries suffer the additional disadvantage that they cannot seek similar employment with a different employer.

Patching Up Capitalism.

And what justification can the I.L.P. offer for a proposal which in effect is patching up the capitalist system? Mr. Maxton expected that criticism and tried to forestall it. In an interview given to the New Leader (February 6th) he said :—

  I admit that the old method of approaching the living wage problem would be correctly described as patching up capitalism. . . . Our approach is fundamentally different.

This, incidentally, is an admission that the I.L.P. ’s past policy for most of the period of the party’s existence has been a policy of patching up capitalism, as indeed was avowed by Mr. Wheatley in reference to the Housing Act he introduced as Minister of Health in the 1924 Labour Government.

The only difference Mr. Maxton could point to was that the present scheme is not based on what any particular industry can afford to pay, but on what the “nation” can afford. This is a distinction without a difference. The two schemes have precisely the same fundamental defect that they leave the capitalist system intact, and leave the capitalist class in ownership and control of the means of life. Does Mr. Maxton think that the capitalist class as a body will show a different attitude towards the wages question because they are approached nationally instead of industrially? He gives his own answer when he quotes Civil Servants as being people who are already “guaranteed a minimum wage” and whose good fortune he wishes to extend to other workers. Thousands of Civil Servants—adults working a full week —receive less than 40s. Yet influential bodies of employers constantly complain that the levels of pay in the Civil Service are too high and should be reduced. A demand has just been made to the Government by an employers' association, that Civil Service wages should be reduced to the level of the depressed export trades (see Times, February 20th). A postman, aged 32, charged with theft at Kingston, on February 21st, was receiving 49s. Id. per week. Out of this he had to keep a wife and two children and was paying 27s. 6d. a week rent (Evening News, February 21st). Mr. Maxton is a supporter of State capitalism as it exists in the Post Office, and wants to solve the workers' problems by extending that system.

Socialism The Only Remedy.

The only solution for the economic problems of the workers is Socialism. Chasing after the endless revivals of old fallacies evolved by the perverted ingenuity of the I.L.P. has brought them no lasting advantage. It has diverted their attention from things that really matter and has left them as far as ever from achieving Socialism.

Even as regards making the best of capitalism, the living wage scheme is an illusion. It is no substitute for trade unionism—Mr. Maxton admits that—it is not an improvement on trade unionism, and it is open to serious objections from which the former is free. In Australia the 10 per cent. reduction in the basic wage, referred to above, has taken place in spite of a Labour Federal Government. Resistance to the award of the Arbitration Court set up by the Australian Maxtons devolves upon the trade unions.

A measure of the irresponsibility of the I.L.P. is provided by the speech of Mr. David Kirkwood, seconding the Bill. He was asked from what source any higher wage would come. Instead of replying that an increase in the wages of the workers would be at the expense of the employers' profits, he informed an amused House of Commons that wealth can be created without limit merely by printing more bank notes.

It does not seem to have occurred to Messrs. Maxton and Kirkwood that if their money theory is sound, it is a sheer waste of time and trouble to print bank notes at all. Why not issue free blanks to the workers and let them write their own bank notes? Or, better still, solve the street litter problem by presenting used-up bus tickets over the counter in payment for goods ?

It was a curious but appropriate coincidence that on the day of Mr. Kirkwood's speech a very similar purveyor of quack nostrums—a German who collected money on the strength of a claim that he knew how to create gold out of base metals— was sentenced to a longish term of imprisonment. Political quacks who trade on the ignorance and trustfulness of the working class suffer no such penalties.

Edgar Hardcastle