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ORGANIZED LABOR AND THE EFFICIENCY MOVEMENT
IN AMERICAN INDUSTRY

A THESIS

Submitted in partial fulfilment of
the requirements for the Degree of
Master of Arts

Michigan State College

BY
Vernon George Armstrong

1933

II

b

j} n;

ACKNOWLEDGEMENT

The writer is grateful to Dr.H.S.Patton and to
Dr. lilliam Haber for their kind suggestions and helpful
criticism in directing this study, and to his wife for
her aid in the preparation of the manuscript and for her

part in making this study possible.

93803

TABLE OF CONTENTS

CHAPTER I
INTRODUCTION

Importance of Efficiency to Workers
Slow Growth of Trade Unionism in the United States
Source of Material

CHAPTER II

THE EFFICIENCY MOVEMENT

How Efficiency May Be Obtained
Historical Background of the Efficiency Movement
Historical Background of Scientific Management

Personnel Management as a Phase of the Efficiency
Movement

AM
Why the Efficiency Movement 18 Predoflinantly an
American Movement

Obstacles to the Efficiency Movement Arising From
Management

Obstacles to the Efficiency Movement Arising From
Labor

CHAPTER III
BASIC CAUSES FOR LABOR'S RESTRICTIVE PRACTICES
Fear of Joblessness .
Fear of Loss of Status

Abuses Arising From the Efficiency Movement

11

14

15

I9

20

87
37
28

Experimenting With Workers
Lessened Productivity

Insincerity of Management When Speaking of
Increasing of Output

Specific Reasons for Labor's Opposition

Individual Reasons

Efficiency Endangers the Union

CHAPTER IV

TYPES OF LABOR RESISTENCE TO EFFICIENCY METHODS
Indirect Policies
Specific Restrictions

Union Opposition to Machinery

Restriction of Output

Attitude of English and German Workers Toward
Scientific Management

Conclusions
CHAPTER V
THE NEW POINT OF VIEW
Effects of the War On Labor's Attitude
Changes in the Philosophy of Labor

Attitude of the American Federation of Labor and
Its Leaders

Specific Reasons for Change of Attitude

Reasons for Change in Labor's Attitude
Reasons for Change in Management's Attitude
Some New Views of Labor
Forms of Organized Labor's Changed Attitude
Research

Elimination of Waste

page

30

31
33
33
48

58
53
57
57
61

68
69

7O
71

78

75
76
85
91
94
95
98

'Programs for Increasing Efficiency
Union-Management Co-operation
CHAPTER VI
UNION-MANAGEMENT CO—OPERATION - SOME TYPE CASES

Baltimore and Ohio Plan

History

Formulation of Plans

The Plan Adopted

Results of Union-Management Co-operation on the
Railroad

Canadian National Plan
Co—cperation in the Textile Industry
Chicago Clothing Trade
Full-Fashioned Hosiery Trade
Pequot Mills Plan
Philadelphia Rapid Transit Plan
Coal Industry
Printing Industry
Co-operation in European Countries
CHAPTER VII
AN EVALUATION
Likelihood of Success of the New Attitude of Labor
Obstacles to the Success of Labor's New Attitude
How These Obstacles May be Lessened
The National Recovery Act and the Success of Labor's

New Attitude

Bibliography

page
98
99

108
109
109
110
111

117
120
121
121
126
128
130
132
132
133

136
138

141
144

144

148

ORGANIZED LABOR AND THE EFFICIENCY MOVEMENT IN
AMERICAN INDUSTRY

CHAPTER I

INT RODUCT ION

No problem of industrialism has offered so much
intense feeling or is of so great an importance to society
as is the issue between management and labor over the
introduction of efficiency systems into industry. Although
we are primarily interested in the development of the con-
troversy in the United States, the roots of the problem
are to be found in the early stages of European industrial-
ism.

The conflict has been present in American industry
for over a hundred years. During this period six specific
phases of the problem have been discernible. The movement
first expressed itself in a resistance on the part of labor
toward the introduction of labor-saving machinery. It next
took form in the anti-piece~work movement; then in an
Opposition toward ITaylorism', which in turn was followed
by antagonism toward the bonus system of wage payment. In
the first two decades of the twentieth century the culmi-
nation of various features of previous schemes was embodied
in the Scientific Management movement. Finally, during the
past few years the attitude of labor has changed to accept-

ance rather than to opposition toward efficiency programs.

This new attitude has been called Union-Management Co-
operation.

The purpose of this dissertation is twofold: first,
to trace the historical development of the attitude of
labor toward efficiency schemes, and second, to consider
experiments of co-cperative management in an attempt to
discover the essential requirements for the removal of labor's
opposition to the efficiency programs of industry.

Importance of Efficiency to Workers.

The six specific phases, enumerated above, when combined
constitute the efficiency movement. The schemes which have
developed from these phases are of great importance to workers.
All such plans alter the job and the conditions under which
the laborers work. This situation arises because of the
close relationship between the shop life and the social life
of industrial workers. If a worker loses his job his income
from this source ceases. The worker may then be forced to
move to another community to find work and thus great hard-
ships are often imposed upon both the worker and his family.

The inadequacy of wages is another reason for the
vital interest of the workers in efficiency schemes. The
job seldom gives sufficient reflwaeraticn for the worker to
provide for periods of unemployment or sickness. There-
fore, anything affecting wages affects the worker's whole
life. Again, the element of change carried by efficiency
programs affect the worker by causing all the elements of

the job to fluctuate.

When man first began to make goods, production was

carried on for use. The entrance of the capitalist changed
this motive to one of profit. With profit upper most in
mind, employers have been constantly in search for any means
or method by which profits could be increased. This had a
bad effect upon the workers as it relieved employers of the
responsibility of adverse results which might accrue to
laborers from the use of more efficient methods in industry.
As long as profits were maintained any action became justi-
fied regardless of the deleterious effects upon the other
groups of society. The workers were the greatest losers

as they were solely dependent upon industry for their liveli-
hood. Thus, nct only the employers but the workers as well
had a profound interest in anything which resulted in a
change in the industrial set-up.

Slow Growth of Trade Unionism in the United States.

The efficiency movement has grown in spite of the
opposition received from organized labor. This has been due
to the relative weakness of organized labor in the United
States. There are several reasons for the slow develOpment
of unionism in the United States. First, those causes which
can be directly traced to the attitude of labor, and second,
those causes which are primarily the result of employers'
points of view.

The workers in the United States had the alternative
of factory work or the homesteading of new lands. This
land could be had for little money and a great deal of hard
work. Therefore, if conditions became unbearable in the

factory, the West always beckoned with the promise of freedom

and independence.

This alternative was denied the continental workers
unless they were willing to migrate to this country, and
such a thing was impossible for the rank and file of the
European laboring class. In the first place many had
neither the ambition nor the desire to give up home ties
and enter a new and unsettled country. In the second place

svany who did have the ambition and desire were not in a
financial position to gratify their wishes. The only way
left for them to alleviate bad industrial conditions was to
organize and offer collective resistance.

Furthermore, in this country, due to the abundance of
fertile land, industrialization was anything but rapid.
Industry in its infant stages could not compete for labor
with the golden opportunities offered by the West. However,
the high price of land in Europe, and the relatively small
amount necessary for industrial enterprise, allowed business
to compete successfully with agriculture. This, of course,
drew a large number of workers into industry. Competition
led to the exploitation of the workers, for it was easier
to out expenses by lowering wages than to increase the
efficiency of the plant. Individual action could do nothing
to protect the workers from such abuses; therefore, organ-
ization became inevitable.

The type of business managers chosen in the United
States further explains the late deveIOpment of our trade
unionism. In the late seventies American industry became

interested in hiring managers "who could get results, not

for the community, but for themselves and their companies,

one of the pre-eminent qualifications being the ability to
handle labor - that is, the ability to get the utmost from
the laborers for the least pay....”:LThis attitude developed
later in this country then abroad. However, when it did
become widespread, it encouraged the organization of the
workers for self-protection.

Sources of Material.

The sources of material drawn upon for this thesis can
be classified into three groups. First, the writings of
union men and leaders; second, articles written by managers
and employers; and third, articles and treatises of impart-
ial third parties. This material was found in periodicals
and phamplets of unions and managements, popular and
scientific magazines, books, and government documents. Of
the first two classes the American Federationist, Industrial
Management, and Epiletins of the Taylor Society were examined
with great care and available volumes covering a fifteen

year period were consulted.

1. H. S. Person, "Industrial Efficiency and the Interests of Labor",
American Economic Review, March, 1912, Vol.2 (supplement), p.124.
2. Ibid.

CHAPTER II
THE EFFICIENCY MOVEMENT

Efficiency may be defined as the power to produce
results. In business the results which are wanted are lower
unit costs of production. Anything which effects a change
of technique, organization, process, or method and which
lowers the unit cost of production is considered efficient.
Schemes or devices tending to produce these changes have
been integrated into a body of thought known as Scientific
Ianagements' The purpose of scientific management is to
further the principles of efficiency by educating employers
to its advantages. The growth and rapidly spreading influ-
ence of this new body of principles warrants it\ being called
a movement.

In the past efficiency schemes have been primarily con-
fined to the production side of business. That is, the prime
motive or objective seemed to be an attempt to increase out-
put without a proportionate increase in cost of production.
Little, if any, attention was paid to the methods of person-
nel control, or to the human side of the industrial problem.
How Efficiency May Be Obtaing.

There are two chief ways to obtain increased output.
First, output may be increased if the workers are induced

to increase their efforts and thereby produce more goods

1. See page 1.

within a given time. Second, output is increased through
the replacement of workers by machinery.

As was noted in the first chapter, the introduction of
machinery into industry has been in progress for many years.
The invention of labor-saving devices was the first form of
efficiency schemes to be put into practice. Organized labor
has often objected most vehemently to the use of these de-
vicesg' One of the reasons why labor organizations originated
was to meet the need of the workers for protection from the
evils of the machine?

As machinery became more commonplace and output increas-
ed, it became evident that a latent source of increased
output was present in the worker himself. Much could be
gained.if”waye could be devised to tap this source. To do
this, various plans of wage incentives‘were devised. For
the first time workers as a factor in the determination of
output were recognized. Since that time attention has been
paid both to the material and human factor.
gistogical Background of the Efficiency Iovgmgnt,

The wage incentive plan first used, and still very
popular, was the piece-rate system. It 'is a natural out-
come of the machine processes which involve the production
of many like units.':5 When workers are paid by the hour,
day, or week, due reference is not given to the individual
differences in'the quantity of output. Some workers have,
1. See feetnote, W.Wissler, Business Administration, page 61, 427.

2. The reasons for labcr's Opposition will be given in Chapter III.
3. J.D.Hackett, Labor msnagement, page 519.

through natural endowment, the ability to produce more
work than others in the same period of time. Justice was
not done under the old plan of wage payment. The faster
worker received the same wage as the slower. Thus he was
either penalized for his speed or part of his labor was
exploited by management.

To correct this evil as well as to provide an incentive
for greater production, certain managers devised a plan
whereby the workers were to be paid onthe basis of their
actual output. This was done, where the type of work per-
mitted, by placing a rate of pay upon each unit produced.
For example, say a rate of five cents was made for each
unit produced. If the worker could produce one hundred units
per day he would receive five dollars for the day's work.

If on.the other hand, he wanted to earn ten dollars a day
and was able to double his output, he could gratify his
wishes. Thus the worker received a more just share of the
fruits of his superior ability and increased efforts, for
the only limit to his earnings was determined by his ability
to produce. Management was favorable to this as the increase
in output lowered the unit cost of production; that is, more
goods were produced in the same amount of time with the same
amount of plant equipment and.capital outlay for overhead
costs.

The experience with such a plan is worth noting. The
workers increased their output to such an extent that their
earnings increased out of proportion to those paid other

workers. Employers could not afford to pay other workers,

K

<\"

p

whose output or efficiency had not increased, the same por-
portionate increase in wages. One of two things could
happen. If the earnings of the worker rose beyond the point
which management felt was the prevailing wage, the rate was
out. If the rate were set too low, workers wens discouraged.
In either case bad feeling was created on the part of the
workers}

Fredrick I. Taylorzattempted to correct these evils by
the scientific determination of the rate of wage payment and
measurement of the workers ability. The essence of his
principles are well brought out in the Hearings before the
Industrial Relations Committee in 1914.3 The? were found
to be: (1) reduction of rule-of~thumb knowledge to system
and scientific formulae; (3) scientific selection and
development of every man in the shop with the determination
to make each a better worker and a higher wage earner; (3)
bringing of scientific managementfmen and labor into relations
of friendly co-operation; (4) and a more equal division of
work between the employers and the employees, that is, re-
lieving workers of some of the details of their work by the
use of more men.

The precise way in which this was done was through the
use‘of time-and-motion study. This method determined how

much a worker could be expected to produce in a given time

at a maximum rate of speed which was not injurious to his

health or physical well-being. Upon the findings the

1. J.D.Hackett, op. cit., p.521.

2. For other wage incentive plans see Ibid., pp. 529-40; especially pp.538-9.
3. J.A.Fitch, I'Mutual Misunderstanding of Efficiency Experts and Labor Men",
Survey, April 25,1914, Vol. 32, p.92.

10

standard rate of pay was based.

Ir. Taylor felt that the most economical way of doing
a thing could only be determined by such a process. Further-
more, the current rate of wages would then correspond to the
best efforts of the workersQ' If the workingman were called
upon to find the best way of doing the job, demands would
be made upon his knowledge which he could not be expected to
have as young workers usually learn from older workers.
There was no proof that the methods of work of the older
workers were correct. In fact, it was often found that
each worker had .‘ different way of doing the same job. But
through scientific study and experimentation, a better way
was found. In addition, the worker could not be expected
to have had either the opportunity or the incentive to
study these things for himself. Nor did he have the chance
to come in contact with a sufficient number of methods which
would enable him to determine which way was best. For after
all, once one gets into the habit of doing a thing in a
certain way, inertia aids the individual to continue this
procedure in the future.

A corollary to this was thngreater compensation was
certain to follow when a better method of carrying out an
operation and a pay figured on a more equitable basis were
devised.2

Mr. Taylor thought he had found an answer to all

industrial ills. A 'fair day's pay for a fair day‘s work'

1. , "Labor Unions and Efficiency”, Outlook, ch.l,1913, Vol.105,
PPe467'8e

2. For instance, if 10 units of production could be turned out in a day
at the daily wage of $4., it stands to reason that anything which would
increase the output to ll units, at the rate of 40 cents a unit, would
give the worker and additional 40 cents a day.

11

could now be scientifically determined. He was, however,
severely disillusioned. Instead of settling the problem

of industrial unrest, Mr. Taylor's principles further aggra-
vated it. He had overlooked the fact that the worker who
could not do the set task would be dismissed and that workers
might so increase their output and their earnings that their
wages would have to be cut.1 Furthermore, workers' psychol-
ogy, change in industrial technique, and non-wage incentives
were disregarded as factors in the determination of employees‘

, att itudes .

;;f’:38istgrioal Background 9f Scientific Management,

\\ Out of the principles of 'Taylorism' has grown a scheme
causing a great deal of industrial unrest. This scheme really
embodies all other efficiency plans under the title of
Scientific Management. At the present time it is the pre-
dominant efficiency system in practice. It is particularly
toward this method and its various tools which the American
Federation of Labor has, until recently, raised such vigorous
objections. It has only been lately that a better under-
standing has been reached between labor and management.

J The principles of modern scientific management, in

\J" ,

}comparison to the principles of Mr. Taylor in the early days
of the mcvement, have been changed. His principles have
been broadened and extended in an effort to overcome those
features which were objectionable to organized workers.

The aims and purposes of modern scientific management are
well summarized by R. F. Boris:

“Theoretically, scientific management is an

- l.Pau1 Devinat, "The American Labor Mbvement and Scientific Management”,
International Labor Review, April,1926, Vol.13, p.468.

12

attempt through accurate industrial analysis

to discover and put into operation the object-
ive facts and laws which underlie true efficiency
in production. In its broadest and best applic-
ation it attempts through this process of
analysis to determine the best location and
structure of the shops for the particular manu-
facture designed; the most efficient processes
and methods of production in general and in
detail; the material, organic and human arrange-
ments and relationships best suited to further
the productive process; the most effective
character, arrangement and use of the machinery,
tools, and materials employed; the method of
selection and training of the workers and man-
agerial force most conducive to effic ency; the
character and amount of work which ed to be
performed by each member of labor and managerial
force; the payment to be accorded each individual
in the interests of efficiency and notice; and
in general it aims to discover all he materials,
organic, and human qualities, arrangements and
relationships which will result in greatest out-
put and lowest cost'.1-

The outstanding change in Mr. Taylor 's aims lies in the
recognition of the human factor in industry. Weight is
now given to the human element in the aims of scientific
management. It is not to be understood that the desire,
or chief aim, of scientific management is any different
from Mr. Taylor's. Both modern scientific management and
Mr. Taylor were primarily interested in the reduction of
the unit cost of production. However, this has been sub-
merged, on the surface at least, in an attempt to correct
one of the latter's errors - the ignoring of the human
element in industry. Time-and-motion study and job
analysis are still considered the best way to determine
the basis for a "day's work' and a 'day's pay“.

It is also to be expected, by the use of such a

l. R. F. Hoxie, Trade Unionism in the United States, pp.326-7.

13

policy, that if strictly adhered to on the part of manage-
ment, misunderstanding and suspiciousness by labor will
gradually be replaced by confidence. It is admitted
though, that in dealing with the human element of industry
much of the success will be in the hands of these men in
the time-and-mction.study department}

Greater faith is placed in time-and-motion study by
its advocates. They believe that such a method provides
a way in which efficiency can be increased. In fact time-
and-motion study is “regarded as the chief cornerstone of
scientific management, its main distinguishing features,
and the point of departure for any understanding and
judgement of its claims, especially with reference to its
scientific character and labor welfare"?

Under the original concept of scientific management
the union, as far as dependence upon it for the disseminat-
ion of craft knowledge is concerned, would no longer be
necessary. Experts would, by the assembling of all inform-
ation that was formerlythe 'tricks of the trade‘, supple-
ment the craft and craftsmanship of the special departments
of the union. 3

Active participation in job study by the workers would
eliminate the unsatisfactory effects brought about by mass
production. Workers would again possess the 'old initiative,
pride of craftsmanship, or whatever we choose to call it

that for more than a century they have been steadily losingdf4

1. O.C.Richards, "The Human Side of Time Study”,Industria1 Management,
June, 1923, Vol.65, p.353.

2. R.F.chie, op. cit., p.304

3. Ibid., p. 322.

4. G.C.Brown,"Wbrkerst Participation in Job Study",American Federation-
.igt, June, 1927, Vol.34, p. 704.

 

 

14

Furthermore, job study would allow the placing of the 'right
man in the right job.' It is contended by many that much
dissatisfaction today is due to the workers' not being able
to have the job which they like most, or the one for which
they are best fitted. The soundness of this argument cannot
be denied.

Labor leaders often overlook the fact that scientific
management does not necessarily entail the use of the piece-

1
work or bonus system of wage payment.

pfijpjgggggp§g1_!§ggggggnt As a Phase of the Efficiency Movgmgnt.

«N

 

Some efficiency plans go further than the mere adopt-
ion of scientific management. Through a Personnel Manager
a.co-operative attitude on the part of labor toward their
various attempts to increase efficiency is sought to be
enlisted.2 It is generally the duty of the Personnel Dir-
sets: to handle all the relationships between men and
management. In the absence of other assistants he acts as
the employment agent, time-and-motion study man, job an-
alysdst, and instructor. In addition, as a sort of balm
to the unruly spirits of labor, various welfare schemes are
instigated. by management and administered by the Personnel
Director in an attempt to correct the workers' grievances.

These plans vary in type and number from company
restaurants to free recreation facilities and from two or
three of these to scores. This type of incentive to in-
crease the output of the workers is very paterndlistic and

seriously objected to by many labor leaders and-unions.

.‘1. Paul Devinat, op.cit., p.485.
2. Today this movement is gaining force among the more progressive employers.

15

Thus, it is seen, from this general discussion of
efficiency that innumerable methods, systems, or plans are
used by employers and managers in an attempt to increase
output. And we have seen that the motive on the part of
management is an effort to increase profits through the low-
ering of the costs of production. Furthermore, any method
by which this can be obtained is designated as being an
efficient one. And finally, management has recently taken
cognizance of the fact that its goal can only be obtained
through the constant recognition of the human element in
\industry. [fa-~51?

M!-

E1 the aficigncz lovement is Predominantly an American
Igvggnt,

The efficiency movement seems to be primarily an

 

American movement. As yet it has made little progress upon
other industrial nations of the world. lurope, as has been
stated before,1 was the first ground on which the roots of
industrialism grew. It seems that of all places in the
world efficiency should predominate in this spot. Yet the
fact is that the United States, a relatively young and new
country, sxcells all others in studied application of
scientific industrial management.a

In a study by two British engineers, nine reasons were
found which designate the cause for the efficiency move-
ment's being strictly an American movement. They found that

“(1) the success of an enterprise, is, in a

lo Se. Chapter Is
2. This is borne out by the position held in manufactured goods of foreign
trade and commerce. Compare position of'United States in 1890 and 1920.

16

large measure, dependent upon a strict adherence
to the policy of rcmction of staff by merit and
ability alone, (2 it is more advantageous to
increase total profits by reducing prices to con-
sumers.... than by attempting to maintain or raise
prices, (3) rapidity of turnover makes for com-
paratively small requirements of both funded and
working capital...., (4) the productivity PER
capita of labor can be increased without limit
depending upon the progress made in time and labor-
saving machinery, (5) it is better that labor
should be rewarded by wages bearing some relation-
ship to output rather than by a fixed wage, the
amount of wages earned by any one man being in

no way limited...., (6) a free exchange of ideas
between competing firms...., (7) elimination of
waste is an essential factor in the attainment

of national prosperity, (8) every possible
attention (should) be paid to the welfare of

the employees, and (9) research and experimental
work are of importance to progresstl

Each of these were found to be in use in the United States
and to be peculiarly American.

In addition to these, other reasons seem to follow
which tend to make this predominantly'an.American.movement.
Trade unionism is not developed to the same extent in the
United States as it is in the industrial nations of Europe.
Two influences have resulted. Inthe first place, organized
labor abroad has objected, sometimes directly and at other
times indirectly, to the use of time and labor-saving
methods or to other attempts to increase efficiency. In
the second place,1he greater the membership of an organ-
ized body the greater is the opposition which it can offer
to any objectionable program. Although labor's objections
may be as keen in the United States as in Europe, its
relative weakness does not permit it to restrict success-
fully the introduction of efficiency.2 Furthermore,

1. Bertram.Austin and W.Francis Lloyd, The Secret of High Wages,pp.24-5
2. Ibid., ppelog-lOs

 

17

industrial disputes do not seem to be so prevalent in the
United States. Thus, the-frequency with which certain firms,
localities, or industries are paralyzed by'trade disputes is
much less here than abroad.

In the United States the development of a strong labor
movement has been more retarded by the readiness and will-
ingness of management to take their employees into their
confidence. The natural outgrowth of such a policy has
been a better understanding and a less uncompromising
attitude on the part of labor toward management and manage-
ment problems.

Progress in industry has been.more rapid in the United
States than abroad because of the difference in environment-
al factors. In comparison to European ccuntri es the United
States has had a scarcity of labor during the last fifteen
years due to the enforcement of strict immigration laws.
This situation has been an inducement for employers to sub-
stitute other agents of production, especially capital in
the form of machinery, whenever and wherever possible for
the expensive labor factor. Furthermore, in order to make
the best of the shortage of labor, all sorts of incentives
have been offered workers to increase their output. The
inevitable result of this has been a lower undt cost of
production and higher wages. These influences have
benefited industry through a more harmonious relation with
labor and a distinct cost advantage over foreign competitors.

Another reason for the efficiency movement being pre-

dominantly an American movement has been the reluctance of

18

some European manufacturers to re-equip their plants with

more modern machineryg' This, of course, is not conducive to
efficiency. In this country manufacturers have never hesitated
to junk equipment as soon as new and more modern equipment
offered greater profits?

A fact often overlooked in speaking of the greater
efficiency of American industry, is the affect of the World
Iar upon the European executive class. Initiative, enter-
prise, and energy are lacking in this group at the present.
This has been primarily due to the devastating results of
the war. A great many young menuiho would now be in execut-
ive positions were killed during the war. This has left
vacancies to be filled by older men‘whose attitude, as they
'grow older, is to 'rely more and more upon experience and
less upon enterprise in their endeavors to progress“.3 The
United States has had the good fortune to escape these great
losses.

The picture of the efficiency movement is visualized
too optimistically by those coming to the United States to
study it. American efficiency is spoken of by many as con-
scious rationalization on the part of management. The idea
is that all these things are accomplished with some lofty
goal in mind. This is an erroneous attitude. As one able
writer puts it, the rapid increase of American productivity
'is a result more of mechanical ingenuity and large capital

4
resources than of anything else.“ The United States has

1. Ibid., pp.120-1.

2. This also has been a distinct contribution to the rapid industrial
progress of the United States.

3. Ibid., p.121

4. , ”Union‘Management Co-operation in England", New Republic,
Jan. 4,1928, Vel. 53, p.181.

 

19

been fortunate to have these factors at its disposal.
Obstacles to the Growth of the Efficiency Movement.

a. Obstacles arising from management. However, there are
outstanding obstacles tcihe growth of the efficiency movement
in the United States. These retarding factors are the
attitudes of both employers and employees - particularily
trade unions .1 In speaking of management 's att ituds toward
efficiency, J. A. Estey points out that "it is but a minority
of employers that at any time see the light"? This condit-
ion may be because of technical difficulties, competition,
and inertia.

The technical difficulties may be of such a nature
that it becomes impossible to adopt the policies of the
enlightened employer regardless of how badly it might be
desired. Often the lack of sufficient capital makes it
impossible to advance the processes of production in keep-
ing with the accepted standards of the<iay. Or it may be
that business conditions do not warrant the expenditures of
funds sufficient to pay the costs and a reasonable profit.

Present conditions emphasize, as those of no other
period have, the results of competition. In this way,
employers who would like to adopt more efficient methods are
not permitted to do so. For example, I once heard an inr
dependent druggist say that he had rather compete with a

chain drug store than with an independent one, the reason

1. In the following pages when labor is spoken of it must be taken to
mean organized labor as ”organized labor is rather the organized ex-
pression of what labor in general would express if organized". See
J.R.Commons, "Organized Labor's Attitude Toward Efficiency" American
lbonomic Review, Sept. 1911, Vel. l, p. 472.

2. .T.A.Estpy, The Labor Problem, P- ,3,

20

being that the former always sold at a profit, although
small, and would thus allow him to continue at a profit.
Although this case was applied to the retail trade, it is
equally true in other branches of industry.

It has been relatively easy in the past to enter the
field of business in this country. Profits were easily
made from the tremendous natural resources. Many thus
entered the industrial field who could not otherwise have
done so. This condition has retarded the introduction of
more efficient methods of production into industry.

Similartly, energy, initiative, and enterprise have
not been at a premium. It has only been recently that these
factors have been demanded. Until these old inefficient
methods have been discarded, either through education or the
force of competition, efficiency cannot reach a plane of
universality.

Labor's attitude toward efficiency and the efficiency
movement is of primary importance to its success. The im-
portance of such an issue to labor has been shown. It was
also shown that labor organized for the purpose of protect-
ing its own interests. As expressed by one writer, 'union
men believe that their interests are mutual and are best
cared for by association and collective action'.1 Therefore,
anything which threatens this has been strenuously opposed.

b. Obstacles arising from labor. lanagement's effort to

1. A.J.Portenar, "Centralized Labor Responsibility From a Union Point of
View", Annals of the American Academy of Political and Social Science,
Mhy,1917, Vol. 71, p.196. See also H.B.Drury, "Labor and Production",
Annals of the American Academy of Political and Social Science, Sept.
1920, Vbl. 91, p.80.

21

increase output and lower costs threatens the stability of
the union. The efficiency policies of vital interest to the
unions may be considered as being: (1) the adoption of the
piece-rate, bonus, and premium systems of wage payments and
other similar methods of wage payment, (2) the minute sub-
division of labor in an attempt to reduce skill to a point
where a sufficient amount of it can be quickly developed,
(3) the greatest possible use of unskilled labor including
women, and (4) utilization of labor-saving machinery?’ To
state more specifically, labor and management differ over
conditions of work, hours, base rate of wages, methods of
distributing profits (efficiency rate basis), methods of
conciliation and arbitration, tenure of employment, and

the question as to the determination of what is a sufficient
supply of labor.

Iorkers feel that they have certain rightsz in industry.
Among these are the right to organize, to bargain collect-
ively, to have a voice in the determination of the conditions
under which they work;<7means of expression through rep-
resentation; and the right to an ever increasing standard
of living.‘5 In.ths brief this is the philosophy of labor.
They base all their policies, activities, education, and
aims upon the various aspects of the multitude of issues
which arise out of their relationships with management.
This philosophy is a result of years of experience with
l. G.H.Sheppard, "Industrial Representation and the Fair Deal",

Industrial Management, Feb., 1922, Vol. 63, p.81.

2. See Chapter IV, p.62.
*3. Hugh Frayne, "Will Greater Production Cure Social Unrest", Annals of

the‘AmericanAcademy of Political and Social Science, Sept. 1920, Vol.91
pe 58-90

23

capitalism. It has demonstrated to their satisfaction to
be the only philosophy which they can conscientiously
follow in the protection of their interests.

Not only is this philosophy the outgrowth of experience,
but also of the teachings of American democracy. Opposit-
ion from workers arise when they do not find the same
conditions existing in the industrial world as they found
in the political world. This attitude is expressed by
R. L. Cornick, a workers‘ representative in the Watertown
Arsenal Orders Branch of the Ordance Department, when he
says , "Of what avail is freedom of thought or speech to a
people unless they control the shaping of their destiny?"1

However, political conditions have less influence
upon the lot of the workers than do the economic conditions.
For this reason the philosophy of labor does not pertain
to the political side of their life. Its vital interest is
in the economic factors surrounding it which have a direct
bearing upon its mode of living. Nevertheless, F. T.
Carlton feels that organized labor today is an efficient
conservator of American democracy as it aids in teaching
the American people the principles of democracy.2

Each of the above mentioned issues is consistent with,
and rises from, this philosophy of labor. Workers maintain
that civilization is the result of labor and exists only
through the efforts of toil? .And in accordance with this,

society is essentially a co-operative enterprise in which

1. R. L. Cornick, ”Organizing the Shop for Production", Annals of the
American Academy of Political and Social Science, Sept., 1920, Vol.91, p.39.
2. F. T. Carlton, Organized Labor in America.

3. , "The Workers' Point of View", Monthly Labor Review, March, 1926,

Vol. 22, pp.555-6.

23

the status and rights of each factor depend upon the function

they perform; grievances of labor are, therefore, a claim

to rights and not to charity?' Upon this labor bases all its

policies of resistancgatoward management and its doctrines?
Furthermore, labor leaders feel that the assumption

that capital takes all the risks of loss and is therefore

entitled to all the profits of industry is erroneous.

Whiting Williams says in respect to this that

Iit is true that the worker has the preferred
position over the capitalist because he gets
his dividends on the investment of his labor
before the capitalist does - and that is an
advantage which many workers do not appreciate.
0n the other hand, by closing down this or

\ that department when orders are shy....,
the claim of labor may be completely side-
stepped for the period, whereas capital
continues to run its bill; it may have to
wait and take a chance for the bill's payment,
but the charge goes on and into the bill to
be met some day. And every day's close down
spells the same old thing to the chaps work-
ing with the shovel and even those with the
drill press".4

So we see, that efficiency is a movement which attempts
to lower the cost of production for management. We have
examined its background and some of the important methods
which it uses to obtain its goal. We have discovered that
it is principally an American movement and the reasons for
this. Even though Europeans worship our industrial effi-
ciency, serious obstacles exist which hinder its growth.

1. F. T. Carlton, op.cit., pp.267-8.

2. The Policies alluded to here will be discussed in Chapter IV.

3. Wm. Crozier, "Labor's Interest in Administration", Annals of the Amer-
ican Academy of Political and Social Science,_Sept., 1920, Vol.91, p.154.
4. Whiting Williams, "More Production? -- Say Where D’ya Get That Stuff?",
Annals of the American Academy of Politicaland Social Science, may, 1920,

Vol. 89, p.185, Cf. B.M.Jewell, "Union—management Co-operation -- Recent
Extension of Collective Bargaining, pamphlet, 1925.

24

And finally, an attempt has been made to depict the
philosophy of labor and a more or less brief and general
statement of labor's attitude1:oward efficiency methods and

'the efficiency movement has been presented.

25

CHAPTER III

BASIC CAUSES OF LABOB'S RESTRICTIVE PRACTICES

The reasons for labor's restrictive practices and
attitudes may be traced to a general state of fear. This
may be the fear of change, of anxiety for the future or
fear of joblessness, or of a loss of status. Fear of
change may be accounted for by the workers' ignorance of
management or it may be due to the general suspicion on
the part of the workers toward any proposal of management.
Anxiety for the future is present in the minds of all
people, but much more so in the minds of the less secure
group among the working class. Workers are particularly
fearful as they are solely dependent on their job as a
means of livelihood; wages which they receive are often
inadequate to allow the accumulation of sufficient financial
reserves to tide them over periods of stress such as un-I
employment, sickness or old age. Finally, for workers as
a group, social status is measured by the nature of the
job which they hold. Anything causing a change of job or
the lowering of its skill lessens the labor's social status.
This accounts for a great deal of the unrest among the more
skilled workers.

Fear of Change as a Basic Cause.

The fear of change is partly psychological and partly

26

the result of past experience. In itself, change is a dis-
turbing factor for it contains much that is unknown. The
worker does not know what effect the outcome of a new method,
device, or apparatus may have upon him. That change may be
advantageous to labor is never considered until the change
becomes a reality. Professor Leiserson's studies of labor's
attitude convinces him that it is not the machine the men
fear, but the change which is brought by it.1 And in the
case of scientific management, labor fears the changes
accompanying it because of the adverse results which might
come about.

In.addition,'workers' objections to efficiency are the
result, to a great extent, of their experiences with it in
its experimental stages. These aspects which made an ever-
lasting impression upon their minds were its bad features.
The‘workers were impressed with rate cutting which eventu-
ally followed excess production. They also obeerved that
the greater part, if not all, of the profit from such in-
creased producticn was taken by management. They saw,
therefore, that such efficiencycievices were pure exploit-
ation. Because of this and similar experiences, labor has
assumed a suspicious attitude toward all plans which involve:
changes that are sponsored by management.

In addition to this attitude, labor's opposition is
also due to the ignorance of the aims and character of the

proposed efficiency plans. This has led to further distrust

zl. WIN; Leissrson, "Collective Bargaining and Its Effects On Production",
Annals of the American Academy of Political and Social Science, Sept.,
1920, v01. 91, pp. 4g'6e

87

of management as well as to efficiency in general}. It has
not been customary to take labor into management's confid-
ence; so when a change was proposed,the workers had no
knowledge of its possible outcome. As a result they have
endeavored to protect themselves through opposition to all
efficiency proposals. This ignorance on their part has only
increased general distrust and suspicion toward all employ-
ers and their aims.

Fear gf Joblessngss.

The tremendous importance of job security to labor has
been taken out of the realm of conjecture and placed in the
realm of reality by the recurrence of depressions. Workers
fear the loss of Job because they have no *way to protect
themselves. They are forced to turn to their meager savings
and to public charity. The inadequacy of these and the
humiliating influence of the latter, are the basis for this
fear.2 This situation has led to the adoption of policies
directly restricting output, as well as to the multitude of
rules which, although aimed at something else, indirectly
places prohibitions on more efficient methods of production.
The direct methods of restriction in this case have acted as
a sort of informal unemployment insurance. This restrictive
policy’has been used to delay lay-offs and to stabilize
earnings.3

rear of Loss of Status.
The opinion in which workmen are held by their fellow

 

1. J..L. Fitch, cp. cit. p. 92.
2. Paul Douglas, Standards of Unemployment Insurance, p. 11.
3. S.B. Mathewson, Restriction of Output Among Unorganized Wbrkers, p.86.

28

men is determined by their industrial position, thus workers
Jealously guard their own skill. This fact is often over-
looked by management. Whiting Williams points out that
labor's desire to preserve its social status is one of the
fundamental motives for its opposition to efficiency.1 For
'almost numberless factors and 'conditions' of the job line
up along the dollars and cents per hour to make a man's work
the final, the supreme measure of the man himself'.2 Among
the property class of society, a man's social status is
measured by the extent of his property holdings. But, in
the case of the great property-less class, the absence of
such leaves only the 'conditions' of the job to designate
the social status of the worker and his family:5

. To sum up this general discussion, it can be said that
the roots of labor's opposition to efficiency are based upon
the fear of the threatened weakening or downfall of some
particular bulkwark of its life.

Abusgs Arisipg From the Efficiency lovemggg;

The early experiences which workers and unions had with
scientific management have also provided them with a basis
for apposition. ’The essential elements of this movement in-
cluded time-and-motion study. With its use higher standards
of output were required of all workers. These methods com-
bined with incentive‘wage payment plans‘tapped the potential

labor power which workers frequently possess. Excess earn-

ings were followed by rate cutting in so many instances that

- l. Whiting Williams, Mainsprings of Men,
2. Ibid., p. 39.
3. Ibid., ppe 56-70

29

labor leaders did not hesitate tordeclare that
- . Wtime-and-motion study is....simply and solely

an instrument for task setting and efficiency

rating, used thus, in the main, to determine

how much can be done by a workman engaged in

a given operation within a given time, and

therefore, to set the maximum task accomplish-

ed by him and the group of laborers to which

he belongs.'1

In addition, the engineers and technicians, who set
up these tasks, introduced constant change in the methods
of work. Scientific managers in American shops thirty years
ago were almost uninformed on workers' psychology. The
'human engineering“ aspect of the job was quite completely
overlooked. The old idea of "doing a thing in a clean,
competent fashion without necessary fuss or waste" became
I'dcing a thing in a machine fashion and in disregard of
2
all human factors". The degree of confidence placed in a
given efficiency system was so great that it was believed
by its advocates that all labor troubles and conditions
under which trade unionism could not function successfully
3
would be automatically corrected. In view of this, the
roots of dissatisfaction readily sprouted. At present the
more progressive of efficiency advocates recognize the
importance of the human element and have adopted it as part
of all efficiency schemes.
Expgrimenting With the Wgrkers.
John P. Frey, one of the best informed American labor

leaders, cites an additional reason for labor's skepticism

1. Carl C. Barth, "Scientific Management - Hearing Before House of Rep-
resentatives", Bulletin of the Taylor SocieH,Oct.,l929, Vol. 14, p.505.

2. I.M.Tarbell, "Fear and Efficiency", Independent,.l'uly 7,1917, Vol.91, p.19.

3. J.P.Frey, "Labor's Attitude Toward Methods of Management", Annals of

the American Academy of Political and Social Science, Sept. , 1920. Vol.91, p.143.

30

toward scientific management.
‘ 'Labor has objected in the past and will
object in the future, whenever it believes
that it is being experimented upon and ex-
perimented with by others, without having
a voice as to the necessity, value, or the
character of the experiments taking place
during a period of change".l
It is not so much the actual experiment to which the unions
object as it is to the fact that they have so little control
over the process of experimentation. That is, the results
of the experiment are entirely out of their hands.

Labor has learned that when things pass out of their
control, advantage is taken of the workers by profit-seek-
ing employers. They are no longer able to protect themselves.
For example, it may be found through time-and-motion study
that the work now done by twenty men, under slightly alter-
ed conditons, can be done by fifteen. If these extra five
men are separated from their jobs without any provision for
future employment, the entire cost of the change is borne
by labor. Hanagement has in this case reaped the benefits,
and labor has paid the cost.

G. c. Brown also offers support to the contention that '
the lack of voice or control in an industrial experiment is
a fundamental reason for labor's objection to the efficiency
movement. He contends that “anyone who brings an open mind
to its review (labor's objection) will admit....that it
contains an element of truth and justice.'2
Lessened Productivity.

During the early years of the efficiency movement

' lo Ibide, Pel4le

2. BuC. Brown, ”Werkers Participation in Management", Bulletin of the
Taylor Society, Feb., 1929, Vbl.14, p.13.

 

 

31

organized labor believed that methods used did not increase
the productivity of the plant. The reasons, acquired from
past experiences, for this attitude were that the complexity
of such systems demanded an increase in the number of clerks
and supervisors. That is, the elaborate records and function-
alised management necessary under such plans necessitated an
increase in the administrative personnel. This affected
productivity in two ways; first, any savings arising from
the increased output of the workers would be off-set, to
some extent, by the necessary addition of administrative
clerks and supervisors; second, the possibility of inter-
rupting the smooth flow of production would be enlarged by
the increased complexity of the manufacturing process. For
instance, if orders had to pass through the hands of ten
people'where eight were-formerly required, the speed of

this process had to increase twenty per cent if additional
time were not consumed. Therefore, providing the first
assumptions of labor were correct; the conclusions were not
without foundation.

Insincgrity of ygnagement When Speaking_gg_;pg£pased Output.
Another reason for labor's objection‘to efficiency
schemes was the belief that management was not sincere when
speaking of its desire to increase the productivity of the
plant. Two facts presented themselves which substantiated
this attitude. First, management itself restricted output,

second, the inefficiency and wastefulness of management

contradicted a favorable attitude toward increasing pro-

ductivity.
lanagement's desire to increase output at a given time

32

1
was usually due to the prospects of large profits. As

soon as the demand fell and profits decreased, employers
instinctively sought to slow up production.

Ir. Thorstein'Veblen in his Theory of Business Enter-
prise, pointed out that there were two forces present in
industry which were diametsrically opposed. One sought to
increase continually the physical output of the plant and
was interested primarily in decreasing the unit cost of
production. The other sought to restrict output and was
primarily interested in the maintenance of profits.

Ianagement's disregard of its own inefficiency and
wastefulness has been somewhat responsible for labor's
antagonistic attitude. The early forms of the efficiency
movement were primarily concerned with an attempt to decrease
thewastefulness of the workers. The commission appointed
for a study of the waste in industry found that labor was

responsible for less than twenty-five per cent of the waste
while over fifty per cent could be directly traced to manage-
ment.2

So, when presented with these two facts,‘workers
seriously doubted the sincerity of management when it des-
ignated a favorable attitude toward increased productivity.
Neither could the workers understand why management should
be allowed to continue its restrictive and inefficient
policies while they were censored for having attempted to
protect their own interests by the same policy. This

~‘1. HTMtKimballQWhat the workers Think About Capital", Industrial Management

March, 1920, Vol.59, p.245.
2. Committee on the Elimination of Waste in Industry of the Federated

American Engineering Societies, Waste In Industry, p.9.

33

situation has been a fundamental factor in labor's opposit-
ion to all proposals on the part of management to increase
productivity. '

Specific Reasons for Labor's Opposition.

The specific reasons for labor's objections to the
efficiency movement can be classified into two groups -
those which affect the workers as individuals and those
which affect their organization. The former are of a
personal nature and affect the organized and unorganized
workers equally. These objections to efficiency schemes
have a direct bearing upon the life of the individual,
that is, the rights or liberty of the individual, irrespect-
ive of his union affiliations. The second group only
affects the organization and is either a threat to collect-
ive bargaining power or to the solidarity of trade unionism.

The first group includes the tyrannical and arbitrary
control exerted by employers. Workers also believed that
they were speeded up and sweated, unemployment was increased,
and a general lower wage level was brought about by efficiency
schemes. Further, efficiency robbed the job of its skill,
led to rate cutting, aided in the use of the blacklist,
and stressed quantity rather than quality work. Finally,
efficiency methods accumulated information which could be
used against the workers, built up class consciousness, and
the welfare plans included in these schemes savored of
charity.

Individual Reasons;

a. Tyrannical and arbitrary control by employers. The

34

free will of the worker has been subjugated by the increase
of the supervisory staff and the minute subdivision of the
work. The increased use of machinery has made the old handi-
craft expert a machine operator. in individualistic attitude
can no longer be taken toward work. The worker has become a
mere cog in the machinery of industry. This fact has been
of greater importance to the American worker than tothe
workers of any other country; The workers here have been
taught since birth to believe in the equality and freedom of
all men. Yet when these very ideals are usurped in indust-
rial practice, the worker can not be expected to accept the
results.

Besides being contrary toishe American.democratic ideal,
specialization does not allow for the increase in mechanical
knowledge which the workers think is their right. Specific-
ally, they object to specialization on three grounds. First,
it does not provide adequate education for apprentices from
which competent mechanics can be developed. Second, it keeps
the worker at one job so long that its monotony numbs his
mind. Third, by such a process, functional mechanics are
made which can work effectively only under functional foremen
and supervisors provided by the system?’ In this way workers
have become so specialized in their knowledge that they can
do only one type of work regardless of consequences which
might arise. Therefore, workers have objected to all phases
of the efficiency movement.

b. Worker is gpeeded up and sweated, A second basic

1. J. P. Frey, "Relation of Scientific'Management to Labor", Journal of
Political Economy, May, 1913, Vol. 21, pp. 409-10.

35

objection to the efficiency movement has been that it was
merely a subtle way of over-driving the workers. Essentiallm
time-and-motion study is interested only in ascertaining
whether or not the particular operation or job can be done
more rapidlY. In reality it is only an attempt to speed up
production. The objection in this case, as one union offic-
ial puts it, is not so much the objection to increased
efficiency of workmanship or production as it is to "the
so-called efficiency systems which gauge the workman's use-
fulness as a productive agent by mechanical rules and
devices which do not embrace the safeguarding of life,»
health, and welfare of the worker".1 Here, then, lies the
whole crux of the objection to greater speed.

Labor leaders also felt that the use of the stop
watch was an attempt on the part of management to speed up
the workers. By means of this instrument, the worker would
be forced to work beyond the limit of endurance. It was
enough to lower the age limit of hiring in industry with-
out forcing the laborers to work at such a pace that the
hiring age would have to be lowered still more. Further-
more, the stop watch in conjunction with time-and-motion
study was construed as a plot on the part of management to
take from the workers the 'tricks of the trade' which had
heretofore remained solely in the hands of the unions and
union men. In other words, it was a sort of usurpation of
power. Job security was further threatened in that the use
1. Mathew W011, ”Industrial Relations and Productions”, Annals of the

American Academy of Political and Social Science, Sept., 1920, Vol.91
p.19.

of the blacklist made it harder for those workers classified
as inefficient to obtain other employment.

Speeding up has been keenly objected to on another ground
- increase of industrial accidents. This fact can not be
questioned as sufficient statistical proof supports it.1
Furthermore, the worker's dependence upon his job makes any-
thing*which might lessen his earning power of vital interest
to him. For instance, if due to an accident, earning power
is diminished fifty per cent, no'way is presented to supple-
ment this loss other than through the medium of compensation
provided by law. This compensation is often inadequate?

So workers have strenuously objected to any method, system,
or device whose primary purpose has been to speed them up.

c. Iggggasgd unemployment. Organized workers have also
felt that unemployment was increased by efficiency schemes.
Skilled.workers were displaced and cheap labor was utilized
in their place. Ihen.workers were speeded up, it was found
that fewer workers could do the same amount of work as before.
This meant that some were immediately displaced unless the
demand increased sufficiently to take up the slack.

For instance, in the case of the cigarmakere, workers
were displaced because of the introduction of cigar making
machinery into the industry and were forced to find a new
occupation. In the case of the typographical workers, the
elasticity of the demand for printed matter was such as to

permit the rehiring of the workers displaced by the

1. E.E.Cummins, The Labor Problem in the United States, pp. 80-1.
20 Ibid"Ppe 727-30e

37

introduction of the linotype. As has been mentioned before,
the possibility of being rehired is of little significance

to workers. Therefore, their attitude of opposition has been
based partly at least on the fact that efficiency methods
tend to displace workers and thus increase unemployment.

Efficiency schemes also create unemployment in another
manner. lhen specialization is put into full practice, the
skill necessary to carry on an operation is so diminished that
less skilled workers can manage production. Although other
workers are hired in place of the more skilled at a lower
wage, unemployment is created for the highly skilled group.
Furthermore, through these highly skilled organized groups,

a united opposition is offered to all methods, devices, or
plane which will in any way substitute cheap labor for the
more expensive, skilled labor.

A good example of this is the inflow of Hexican labor
into many of the northern industrial centers and the result-
ing displacement of workers who have ability to demand
higher*wages for their labor. This, it might be mentioned,
is the reason for the stringent apposition labor offers to
the free immigration policy adopted by the United States
until a decade ago.

As will be seen in chapter four, labor strongly
Opposes the introduction of labor-saving machinery. R.L.
Cornick speaks of this in the following manner:

'Labcr sees in labor-saving agencies and
machinery, factors vitally affecting its
immediate employment. It is certainly

not reasonable to expect labor to co-operate
in carrying out a program that might bring

into existence a growing class of unemployed,

38

or to co-operate in the administration and
furtherance of a system that lessens the
self-respect and undermines the independence
of the worker by making his work more and
more mechanical'.l
In this statement lies the basic reason for labor's Opposit-
ion to the machine. The fear of loss of job and the
consequences which follow are two very forceful factors in
shaping the attitude of labor. This fear of unemployment
is one of the most potent factors in labor's dissenting
Opinion.concerning’efficiency.2
d. Lowers general wage level. Another reason for labor's
opposition to efficiency has been in the belief that wages
are lowered by speed and a higher degree of specialization.
Employers are reluctant to see employees receive high wages
resulting from wage incentive plans and quantity productionf5
If wages rise beyond the point which employers feel the
prevailing wage, the rate is cut, and the workers are forced
to expend more effort for the same amount of pay. Workers
also think that management is taking all the profits
accruing from their increased efforts. Such an opinion is
not illogical when considered from this point of view.
Another argument is used in connection with the lower-
of wages. In times of prosperity management often shows
labor that its wages are higher than at previous times.
These higher wages are called counterfeit, for regardless
of their dollars and cents size, they will not buy the
necessities and meager luxuries of life which.the higher
1. R.L.Cornick, ”Organizing the Shop for Production", Annals of the
American Academy of Political and Social Science, Sept.,1920, Vol.91.
2. W.Haber, "Workers' Rights and the Introduction of Machinery in
the Men's Clothing Industry", Journal of Political Economy, Aug., 1925,

Vol. 33, p.595
3. J.R.Commons, Labor and Administration, p.131.

 

 

39

cost of living in prosperity dictates. Neither are they
great enough.to allow for modest provisions required by old
age. In other words, they "have too little value when
1
measured against the purposes for which wages must serve".
This fact is often overlooked when labor is criticised for
requesting still higher wages.
s. Robs job of its skill, The new labor demands of

scientific management also affect the workers as

'scientific management tends to shift the

demand from labor which is already skilled

to that which is teachable. It draws its

labor supply not so much from those equip-

ped with the usual store of trade knowledge

and technique as from those with the

aptitude which enables them to respond more

quickly and effectively to the intensive

training in newer methods". 2
This, in the opinion of the workers, was done in such a
manner that those who wererdisplaced through the loss of
their job stood to lose their skill as well. With the
advent of the new workers who were less skilled, the
demand for workers of the old skill began to decrease. Thus,
the expense of rehabilitation was placed on the workers'
shoulders - the ones least able to bear it.

Furthermore, it no longer becomes necessary to pay
high wages demanded by skilled workers. Thus, two results
arise from the increased specialization and use of machinery.
First, wages are lowered, and second, skill is reduced to
an almost negligible factor. lorkers feel.that the old
pride which existed in workmanship has disappeared and
l. E.E.Hunt, Scientific'Management Since Taylor, p.242.

2. G.B.Thompson, "Relation of Scientific Management to Labor" Quarterly
Journal of Economics, Feb., 1916, Vol.30, p.315.

monotony has taken its place. Work then becomes a burden
and a real task instead of a pleasurable occupation.

In addition to this, social status is lowered when the
skill required by a job is decreased. The 'conditions' of
the job are no longer desirable. As was mentioned earlier
in this chapter, the loss of social status is in reality
a great loss to the working class.

f. fitgggsed_gpantity rather than quality work. Similar-
ly labor leaders thought that the speed which a piecevrate
system of wage payment required work to be done, did not
permit sufficient time for production of the best quality
of work. That is, the advocates of these schemes were not
interested in the quality of the work as much as in the
quantity. The greater the quantity, the lower the unit
costs of production and the greater would be the probabil-
ity of high profits. Thus were all care and pride of
workmanship obliterated.

g. Patgrnalism of industry savors of charity. Many
efficient plans, scientific management for example, include
some paternalistic policies. 'orkers resent this as

"no self-respecting workman expects something
for nothing. He does not want charity and
shrinks from it. He realizes that the one
certain way to obtain benefits and privileges
is to be worthy of them-1

furthermore, labor leaders felt that if sufficient

compensation were received, workers would not require welfare

aid.

1. F.B.Hazzard, "Industry's Handicap of Fear", Industrial Management,
April, 1923. Vol.65, p.234.

41

Labor has also objected to welfare on the grounds that
it tends to create a feeling of dependence upon the employ-
er. Company welfare creates the feeling that individual
liberty is ourtailed in the pursuit of those desires, likes,
and dislikes which go to make up individual liberty.1

Glass consciousness is fostered by efficiency for it
increases the dependence of the worker upon his job, de-
creases his skill, and thus reduces his social status.
Dependence arising from lower wages, which usually follows
a decrease in skill, is continually embracing a greater
number of workers. lore workers are replaced or forced to
relinquish their independence and submit to inferior jobs.
is the superior class becomes smaller, an attitude is
generally built up that places a greater barrier in the way
of an easy access from one group to another. Thus, labor
strenuously objects to efficiency because it lowers the
status of the‘worker.

h. nghibits the practice of restrictign_gf output. The
commonly known practice of workers and unions to restrict
output in order to protect the wage rate and unemployment
is much interferred with by a plant conducted according to
the principles of scientific management. This situation
gave labor an additional reason for opposing scientific
management.

As long as restriction of output could be used, it
acted as a sort of informal unemployment insurance. It

also acted as a guarantee of the maximum rate of pay in

1. reTe carlton’ Op.01t., pe296e

respect to the amount of effort expended. The only other
method available to labor for protective purposes is the
strike. It is less advantageous as it necessitates a
separation from the job which is of little avail in times
of slack work. Therefore, it is believed that restriction
offers the best method of proteCtion.

It can be concluded from the foregoing discussion
that labor's objection to the efficiency movement has been
the result of fear and that its most effective and trust-
worthy weapon may be denied it.
Efficiency Schemes Endanger thegnipn.

The second group of reasons why labor opposes the
efficiency movement includes two main divisions: first,
a threat to the collective bargaining power which in turn
includes the scientific settling of all questions; and
discrimination against union men by allowing open shops,
by promoting company unionism, by preventing free represent-
ation, and by destroying protective union rules and the
breaking down of standards of employment; second, a threat
to union solidarity which is affected by a breakdown of
craft lines. Finally the unions have opposed this movement
because of union propaganda and the inadequacy of union
knowledge concerning its aims, methods, objects and benefits.

Efficiency has affected the solidarity of unionism by
breaking down craft lines and standardizing labor according
to the speed of the fastest worker. This is of vital
importance to unionists as experience has proved that the

trade union is the best agent to represent the workers in
collective dealings. In other words, without the union no

43

way of protection which is not restricted in some fashion
remains for the workers. This will be considered in the
discussion of the specific reasons for organized labor's
otfiections which are to follow.

The efficiency movement is incompatible with trade
unionism. This is because the former can only function
successfully on the basis of constant and indefinite change
while the latter functions on the basis of fixed, maintained
industrial conditions.1 The obsolesence of collective bar-
gaining would leave labor without an instrument by which it
could protect itself in.case fair treatment were not accord-
ed the workers. The only thing upon which they had to
depend, under the early phases of scientific management,
was the word of the employers. Experience had caused them
to be suspicious of this. It was not until several years
later that their attitude changed toward the managers of
industry. A
ggficigncy Injures Bargaining Power.

a. "Sgientific"settlingpof alliquestions. Labor has
denied the 'scientificness' of scientific management as
'progressive trade-unionists are very sure
that no system of management that addresses
itself solely to the increased production of
physical goods, neglecting in the meantime
the human factors of production, can seriously
be taken as scientific“.
This was undoubtedly true of scientific management in its
early stages. However, the advocates of scientific
l. R.F.Hoxie, Trade Unionism in the United States, p. 541, and R.F.Hoxie,
"Why Organized Labor Opposes Scientific Management," Quarterly Journal of

Economics, Nov., 1916, Vol.31, p.78.
2. G. C. Brown, ”Labor's Principles of Scientific Management", American

Federationist, Feb., 1950, Vol.37, p.194.

 

 

44

management feel that the worker is not in a position to
determine a better way to do the jobJ' ‘With such an
attitude present, unions and unionists feel that the only
way in which justice can be done to labor is to bargain
collectively over these questions.

b. Discriminate against union men. Another reason for
labor's opposition to the efficiency movement is in the
discrimination against union men. This has arisen through
the open.sh0p policies, instigation of company unionism,
withdrawl of the free right to representation, and destruct-
ion of protective union rules.

1. Allows open shop, Efficiency schemes can only
function smoothly when an abundance of labor is present
from which managers may select their workers. Unions are
composed of fast, slow, and average workers. If the avail-
able labor supply must be restricted to union men only,
one hundred per cent efficiency can not be expected. There-
fore, efficiency schemes cause the doors of a plant to be
thrown open to all workers in an attempt to get all who are
able to work at a maximum speed.

‘Unions want closed shops, for if all the workers of a
plant are not organized, the power of collective bargaining
is injured. When bargaining with the employer, the Effect-
iveness of-complete concerted action does not exist. This,
then, does not place labor on an equal footing with the
employer. Therefore, organized workers object to the

efficiency movement when it favors an open shop policy.

1. See Chapter II, page 13.

45

8. Leads to company unionism. In many cases efficiency
leads to company unionism in preference to trade unionism
because employers can control their workers better under such
a system. The unions dislike this control and therefore
Oppose all efficiency schemes. Company unionism usually
arises as a sort of pacifier when labor troubles are present-
and the employeirwishes to avoid open conflict. Such unions
have the appearance of including all the features and advant-
ages attainable by a union independent of a given plant or
company. In reality they are more likely.to be only a means
of dividing the workers and furthezrweakening their bargain-
ing power. This is done by the control which the company
management can exert over the union leaders and the lack of
any possible outside assistance to the workers in case of
a strike.

The trade unions Oppose this because it does not allow
the workers an independence and freedom of expression. Then,
too, it weakens their bargaining power by not leaving a way
for the use of outside assistance such as employers provide
for themselves in their trade associations. The primary
objection in this case is based on the injurious effects to
collective bargaining. Bargaining power-varies directly
with the strength of the union. Company unions definitely
limit the number that can be included under such a group.
Therefore, the unions feel that company unionism is not an
agent of their best interests.

3. Egggrnot allow free representation. Furthermore,

under company unionism, the power of representatives chosen

by the workers is lessened as they are themselves employees.
The risk of being discharged is always present if too strong
an opposition is put against some plan of management. Under
'free' unionism the workers have a choice of their represent-
atives and these are usually the officers of the organization.
As a rule the officers are not employees of the company with
which they bargain. Thus, their power is in no way incrim-
inated for the threat of discharge is not operative. Labor
leaders can not see why employers who secure lawyers to

look after their best interests should object to employees
doing the same.

4. Qggtroys protective union rules. Labor leaders feel
that efficiency destroys protective union rules. This
reason is a sort of corollary to the last one. When the
threat of dismissal is held over the heads of unionists,
they are not inclined to obey rules which may be of a
restrictive nature. In this case the fear for the future
is a more powerful motive force than the union principle
or ideal. Unions fear that if even one thing, efficiency;
for example, is conceded to the opponent others will soon
be demanded.. The possibility of this continuing until the
organization falls to pieces is always present.

If the opponents of unionism are once successful,
prestige of unionism drops in the eyes of organized as well
as unorganized workers. It then becomes harder to control
existing members or to get new ones. With the realization
of these facts the unions have continued a policy of op-

position toward all intimations of more efficiency.

47

c. gmeaks down the standards of employment. Labor has set
up a great body of rules which limit the membership of the
union. This is done to create a monopoly over the labor
supply of a particular type and thus place the favored
workers in a better bargaining position. When this situat-
ion is threatened, bargaining power is likewise threatened.

Efficiency threatens such a situation by widening the
labor market and by encouraging exceptional workers to set
as fast a pace as possible. The latter'has no bad affects
on labor as a whole if properly used, but the tendency is
for employers to accept the rate of output of the fastest
workers as the standard. This, by creating dissension in
the ranks of the union, tends to weaken the bargaining
power.

Ihen the labor market is widened to such an extent
that unorganized workers compete with the organized, bargain-
ing power is likewise weakened. In this case when disputes
arise the unorganized workers may or may not stick with the
organized. Neither have the representatives of the organ-
ized group any authority to act for these workers nor have
they any assurance that their decisions will be accepted.
Threatens the Solidarity_of Unionism.

a. Breaks down crafttglpes. Craft unionism itself is
seriously threatened by the efficiency movement as it tends
to make craftsmanship obsolete. Mr. C. B. Thompson com-
mented on the results of this as follows:

'In.short, the effect of these features of

scientific management is to breakdown the

traditional lines between craft grou a while
at the same time they develop in ivi ual

48

differences and individual abilities to the

‘utmost and thus establish a new grouping on. 1

the basis of inherent and acquired capacity".
The breakdown of craft lines was a thrust at the very found-
ations of trade unionism. The destruction of this would
eliminate all the benefits which accrue to the individuals
as members of such organizations._ Of course, there is the
possibility of organizing the machine operators of these
machines, but many unions have been unwilling to adopt such
a policy.

b. Labor standardized according to speed‘of fastest worker.
The purpose of unionism is to protect the interests of the
majority of its members. When output of the fastest worker
is accepted as a standard, efficiency tends to place the
majority at a disadvantage. Therefore, it is a direct threat
to unionism for if the unions are unable to protect their
.members, affiliation with a union is of no practical use to
the individuals; furthermore, the essentiality of the union
lbs in the fact that it can control the actions of those who
are affiliated with it. In other words, bargaining power is
derived from union control of workers. In this way the
power of collective bargaining is threatened when union sol-
idarity is adversely affected. Thus, there is a double
motive for opposition to efficiency.

Unions are opposed to efficiency schemes for another
similar reason. If the standardization of human life is
brought about, all individual differences will be disregard-

ed. The attitudes of the unions toward standardization are

1. C.B.Thompson, op.cit., p. 316.

49

often misconstrued. Their policy of opposition is directed
toward the standardization of human life1 and not toward the
standardization ofiwages, hours, and working conditions.

c. Efficiency tries to regugate number of workers in given
industry. Efficiency schemes attempt to regulate the number
of'workers in a given industry by making changes in technique
and processes which require the services of only the most
sffective*workers. This, at first glance, should not seem to
be opposed by the unions as both the unions and industry
are interested in this. There is, however, a difference in
the two views. The advocates ofeaffioiency want the number
of workers to be limited only to the extent that there will
always be a supply of the most efficient workers. The unions
are interested in limiting the supply of‘workers to the
extent that a scarcity can be assured. This gives them more
power and allows them to demand and receive many things which
would otherwise be refused them, for example, high wages, shorter
hours, or time and a half for overtime may result.

The inability of the advocates of the two groups to
become reconciled has led to a great deal of controversy
and labor trouble. If efficiency were allowed to have its
way, average and sub-average workers in the unions would have
little chance of employment. Thus in the attempt to protect
the less superior unionists, union leaders have strenuously
opposed and objected to all efficiency proposals.
Union Propaganda Against Efficiencyy,

Unions have pursued an active policy of propaganda against

1. Mathew W011, "Standardization", Annals of the American Academy of Political
and Social Science, May, 1928, Vol.13’7, p.47.

50

efficiency. R. F. Hoxie maintains that the rank and file of

the union members are quick to distrust their own leaders
1
when their opinion does not coincide with that of the workers.

This becomes important when it is remembered that the rank
and file would not accept the propaganda of their leaders if
they had not had experience which led them to believe the
words of their leaders. Because the workers have faith in
their leaders, the officials are re-elected. Therefore, the
experience of the workers must have been such to have sub-
stantiated the belief that efficiency was contrary to the

interests of the‘workers and their organizations.

From the foregoing analysis it can be said that labor
has opposed the efficiency movement for many reasons. The
basis far these object ions have been either of a personal or
union nature. In each instance workers have felt that the
methods, devices, or instruments of efficiency schemes have
violated some of their rights. In this respect William Green,
President of the American Federation of Labor has said,

“I am confident that we can minimize industrial
controversy through a proper regard and recog-
nition of the rights of both the employees and
the employers. The right of the employer to
manage his industry, to control it, and to
receive a fair profit upon his investment should
be maintained and recognized. The right of the
employees to organize, to bargain collectively,
to be represented in conference with employers
through their chosen representatives, is a right
which should be readily accorded and completely
recognized. A religious observance of these
rights will do more to minimize industrial
controversy than the application of any rule
or formula" . a

l. R.F.chie, Trade Unionism.in the United States, p.335.
2. wm. Green, Unions Reduce Industrial Waste, (pamphlet), pp.1l-12.

51

Mr. B. M. Jewell has given a similar opinion of the
rights of babor by showing that labor and capital both
have rights in industry. In his exact words:

"Each of the above groups(capitalists who
invest their surplus dollars and labor,

who invests their human lives) are entitled
to the fullest possible protection on the
preservation of their actual investment,
and in addition they are each entitled to

a fair return upon that investment, invest-
ors of surplus dollars or capital, must
organize to protect their investment and

to secure a fair return upon the same and
they must be privileged to organize in

the same manner they themselves determine
will best protect their interests and by
the same reason workers, investors of

human lives, must also organize for the
protection of their investment, as they
shall determine best....Neither group of
investors have any right to dictate, or

in any manner control or influence the
other group in the manner of how they

shall organize or how they shall govern
their own self-Organizations, or who

shall represent them, or how such represent-
atives shall be selected".l

Therefore, it can be said that labor's objections to the
efficiency movement have been made in defense of some

right whether that right was a personal or collective one.
Its attitude in this respect has been no different than
those of any other group. All people and all groups always
have and always will attempt to protect their own interests

to the best of their ability.

1. B. M. Jewell, op.cit., p. l.

52

CHAPTER IV

TYPES OF LABOR RESISTANCE T0 EFFICIENCY METHODS

The restrictive policies of labor unions may be
classified into two groups - general or indirect and specific
or direct. By general or indirect restrictions we refer to
such aspects of any union policies and methods as produce
adverse results on efficiency and managerial methods. They
have reference to rules and regulations of the union which,
although aimed at something else nevertheless retard the
introduction of various methods of increasing efficiency.

By specific or direct we mean such policies as are definitely
aimed at a particular method, machine, device or practice.
The policy actually restricts the efforts on the part of
labor in an attempt to prevent the increase of output.

A careful analysis of the general types of efficiency
restrictiOns reveals a multitude of rules and regulations
governing almost every operation performed by laborers plus
almost all relationships with employers. . .

The general objeCtives of unions may be said to include
policies which seekl (l) to protect individual liberty in
the shop, (2) to protect the organization, (3) to maintain
or increase bargaining power of the men, (4) to guarantee
the security of job tenure, and (5) to increase and protect
the older workers' chance of promotion. In developing

policies to achieve these objectives restriction may result.

53

Indirect Policies.

a. Spurs of wprk in relation to restriction. Union policies
regarding hours of labor are not generally thought of as
hearing on efficiency. But such relationship is readily
established. The motives for the shorter-hours policy are
three in number, namely,(l) the speed with.which present
industry is operated causes a worker to reach the exhaustion
point more quickly, (8) higher wages received by workers
demands more leisure in which to spend them, and (3) over-
time plus regular hours required for the average working
day makes the day too long.

One method by which employers can increase production
is to lsngthen.the number of hours of work. A small increase
in the output of each worker makes quite an aggregate
difference. To off-set this, workers have sought to reg-
ulate the hours of the job by limiting their efforts.
However, employers learned through experience that "by
restricting the number of hours, the employers get unrestric-
ted output per hour'.1 The truth of this is borne out by
the fact that prior to 1840, laborers worked twelve hours
or more per day. This has been reduced generally to ten
hours by 1890, and in 1925, to nine hours. In spite of
this reduction the efficiency of the American workman has
increased. Undoubtedly some of the increase has been due
to the introduction of labor-saving machinery. Nevertheless,
the fact remains that now the worker can do the same amount

of work in nine hours that he formely did in twelve.

1. J. B. Cannons, labor and Administration, 1). 134.

54

b. Speed in relation to restriction. Limitation of speed
also acts as a restriction upon output. In this case, union-
ists are endeavoring to protect the security of their job
rather than to restrict directly the output. This attitude
is also based upon the lump-of-labor theory. The idea is
that as the amount of available work is fixed and the faster
men work, the more quickly such work will be completed. To
insure as much employment as possible, union leaders often
require workers to limit their speed of production.

c. Qypppime in relation to restriction. It has been ex-
pressed by one student, and believed by most, that when
hours are reduced and overtime is paid 'time-and-a—half'
the workers tend to slacken their speed during the regular
hours in the expectation of receiving overtime wages.‘I This
is somewhat doubtful. In periods of prosperity workers
are rather steadily employed and earnings are fairly high.
Any overtime would lessen the time available for rest and
recreation. And further, the need for additional compensat-
ion is not so pressing. In times of depression little, if
any,overtime is required, although the workers would probably
accept it if offered the opportunity.

However, the subject of overtime is important in relation
to restriction of output.- Workers object to overtime on
the grounds that it allows fewer men to do the available
work by working longer hours. This threatens the security
of the job in two ways. From an individual point of view,
the workers complete all available work in a shorter time

and are thus not as steadily employed. Furthermore,

1. W. B. Catlin, The Labor Problem in the United States and in Great Britain
In 371.

55

the additional hours required to do the additional work are
taken at such a time that there is a resultant interference
‘with the health and welfare of the worker. From a general
point of view, fewer men are required to do the available
work and thus some are unemployed.

d.;Qpion foremen in relgpion to restriction. Many unions
have rules and regulations favoring the use of union fore-
men in plants. This is primarily due to the feeling that the
workers‘ immediate superior is in a position to demand and
enforce upon them what he thinks to be a fair day's work.

If this judgement is contrary to union policy, a greater
daily output may be demanded than unionists think is to
their best interests. Therefore, if foremen are union men,
and in sympathy with union ideas, the amount of work re-
quired.will not be out of line with that which is felt just
by the workers. This policy, then, acts as a restriction
upon production.

e. Vegas in relation to restrictgpp, lags policies have
been formulated to protect all workers in general and the
slower'workers in particular. These wage policies have a
restrictive influence upon production even though not
created with that aim in view. The policy of the standard
wage and the opposition to wage cutting are specific ins
stances of policies formulated to protect standards of living.

Labor leaders feel it to be only just for two men who
perform approximately the same task to receive the same wage.
In light of this, unions have tried to discourage the various

wage incentive plans used by mangement to increase output.

Labor's plans embody the payment of a flat rate for similar
work. Although the more able workers are penalized under a
flat wage rate, they are not tempted, by the possibility of
great er earnings, to increase their output beyond the point
which will cause the rate to be cut.

Labor leaders also feel reductions in pay are justified
only in exceptional cases and under abnormal conditions. To
them reductions would seldom be necessary if management
itself were more efficient.1

f. gpppgrshipand apprenticeship rules in relation to
restriction. Similarly, union policies on apprenticeship
and union membership are also related to efficiency and out-
put. For efficiency to be a success, its users must be
allowed an abundance of labor in order that they may have
the most efficient workers possible. Any way in.which the
unions hinder or limit the labor supply restricts efficiency
and output. Therefore, union policies governing apprentice;
ship and membership are related to the efficiency movement.
Labor leaders are aiming at vocational or craft education
by the adoption of apprenticeship regulations. The attempt
in this case is to make the union worker a better laborer
than the non-union workera and thus aid union men 'in gaining
a preference over non-union men.a By restricting the number
entering the trade, the supply of that particular kind of

labor becomes relatively scarce and results in a demand for

1. C. C. Brown, 'Workirs'.Participation in Management", Bulletin of the
Taylor Society, Feb., 1929, vol. 14, p. 11.

2. J. B. Cannons, op. cit., p. 123.

3. In the electrical industry the management accepted the apprenticeship
system because its educational superiority was demonstrated to them.
This is, however, the exception rather than the rule. See J. H. Hooley,
."What Co-operation Has Done for the Electrical Industry", Journal of the
We D9909 1930s Po 681-

 

57

greater wages.

The aim of membership rules is to protect wages and job
security, which have been done by requesting a large initat-
ion fee. This has kept out many who would otherwise be
competitors for jobs. The success of the regulation has been
mostly confined to localities in which the unions have had

a fairly complete control over the market.1

Specific Types of Restrictions

Union Opm‘sit ion to Machinery

Since the introduction of machinery into industry on
a large scale, several policies have been followed by
different unions. These are: '(l) prevention of the intro-
duction of machinery, (3) increase in the amount of work
going to hand labor by reducing the wage rate, (3) enlarge-
ment of the field of employment for the hand£Worker by
placing him as a machine operator, (4) reduction of the
inflow of the workers into the trades, and (5) wider distri-
bution of the amount of work left to hand~1abor.z

The first policy involves the use of any one of
three methods. The unions might prohibit their members
from using the machine; they might formulate and enforce
rules against shipping of labor-saving machinery from one
place to another; or, they might restrict the number of
machines which could be used in proporation to the number
of workers on the job.
1. This type of restriction is primarily confined to the building trade
crafts where the unions dominate the market and the employer - especial-

ly Chicago and New York.
2. G. E. Barnett, Chapters on machinery and Labor, pp. 140-1.

58

The Stonecutt ers' Unionl practiced each of these three
methods in an endeavor to combat the introduction of the
stone planer. At first the planer was ignored. When the
rapidity of its use became alarming, the union, in regions
where the union was particularly strong, excluded planers
as well as all plane-cut stone. In other localities where
the planer was already in use, control was attempted by
entering into an agreement with employers. In the agreement
an attempt was made to limit the number of planers in pro-
portion to the number of workers. Provisions were also
made for limiting the number of hours and days which the
planers were to be worked. Later the unions tried to compel

3 None of these

the use of stone¥cutters as operators.
methods, however, were successful in preventing the intro-
duction and use of these machines.

Difficulties were also encountered when unions
practiced the policy of reducing wages so that hand workers
could compete with the machines. The inability of the union
to get the workers to accept wage reductions did not allow
this policy to be carried on successfully. Machine-made
products could be sold in localities where the pay had not
been reduced. Some of the unions met with this experience.
Mr. G. I. Barnett has said that the policy of reducing wages
was only resorted to when self-preservation.was necessary.3

Three advantages were gsi ned w the unions which adopted
1. The Stonecutters' Union, Typographical Union, and Mbldere' Union are
gpod examples of the use of these five policies. For this reasml the fol-
lowing pages will be confined to the experience of these unions.

2. G. E. Barnett, Op. Cite, pp. 36-7.
50 Ibid.. p. 218.

59

the policy of enlarging the field of employment to include
hand workers as machine Operators. First, the amount of
displacement of workers from hand work was reduced by the
number of machine operators which could be used; second,
danger of a surplus of skilled men could be avoided;
third, union control could be maintained over the entire
trade. It might be well to add that the extent to which
displacement was avoided by adopting the policy of enlarg-
ing the field of employment to include hand workers as
machine operators was inversely proportional to the dis-
placing power of the machine.

Contrary to the results of many unions in their
attitude toward the introduction of machinery, the Typo-
graphical Union was very successful in its policy. It
accepted the linotype at its first appearance and succeeded
in.getting many of its members placed as machine operators.
Where other unions that opposed the introduction of machin-
ery into their trades lost their strength by a policy of
opposition, this union gained strength by acceptance.

The reduction of the inflow of workers into the trade
has not been adaptable to the United States. In this country
control over apprenticeship has been in the hands of the
local unions rather than in the hands of the national organ-
ization. Each local has striven to protect itself regardless
of the results of its actions on other local unions. If all
locals of'a national union co-operated, displaced workers

in one region could have become machine operators in another.1

1. This was possible as the introduction of machinery was gradual.

80

Iith the introduction of the linotype machine the
Tyopgraphioal'Union distributed the available hand work by
rotation of employment, that is, by voluntary lay-offs of
one group of workers, another group was allowed to get a
portion of the available work. The working time of each
individual was also reduced, thus more men.were employed.
In other trades the three-shift system was adopted.

The employers were satisfied as the plant did not have
to be run as long as before. This entailed no additional
cost to the employer. In fact it lowered his costs, for a
greater quantity of goods could be produced in the same
time, or an equal amount in less time.

The Iolders' experience with the molding machine has
been similar to that of the Stonecutters and the Printers.
At first they tried to ignore the introduction of the
umlding machine, but its introduction soon gained sufficient
momentum to cause alarm. After much debate and the<adoption
of several short-lived plans,the national union adopted the
following policy:

'1. That the future policy of the union should
seek to establish jurisdiction over the molding
machine operator and all those who work in the
various subdivisions of the trade of molding.
8. That they advise and instruct their members
to accept jobs on molding machines and to
endeavor to bring out the best possibilities.

3. That the officers of the organization ask
the codperation of the foundrymen in forwarding
their plan, and in other ways to seek and
devise meaps of putting the new policy into
practice."

The molding machine was objected to on the grounds
that under the reduction of the piece rate, wages became

l. M. L. Stecker, ”The Founders, the Molders, and the Molding Machine",

Quarterly Journal of Economics, Feb. 1918, vol. 52, p. 287.

61

less in relation to the expended effort. This is illustrat—
ed by assuming that under old conditions a rate was paid

of seven cents per flask and with a daily output of sixty
flasks, a daily wage of 84.20 was possible. Under the new
situation (use of the machine and a rate of 8% cents) it
would be necessary to increase the daily output to 165
flasks in order to continue the old daily wage of $4.20.
This meant that 2% as much sand had to be mixed; 2% as
many flasks had to be shaken out; and 2% as much metal had
to be poured.

The point that the proponent of this objection over-
looked is that the machine absorbed some of the labor that
was formady carried on by the worker. For instance, the
molding machine sucks up the sand and rams the mold by means
of air pressure. In addition to this, the machine used on
large molds either removes the flasks, or mechanical lifts
of some kind are provided for such work. The amount of
additional effort saved by these means may not equal the
additional effort required by the increased output necessary
to maintain the former wage, but, at any rate, the addition-
a1 effort required is not in proportion to the increase in
the number of flasks made.

Rggtriction of Output.

Restriction of output, spoken of earlier in this

 

chapter, has been one of the most effective methods used by
organized labor in opposition to the efficiency system.
Restriction of output is defined as being ’the conscious
withdrawl of productive effort by the workers’. Although

68

few instances present themselves in which restriction is
advocated as a direct policy by trade union literature, it
is used by individual members. Its use is not only prev-
alent among organized workers but equally so among unorgan-
ized labor.

Iorkers have thought for many years that each individual
had a 'right' to some job. Whenever one was deprived of a
job, the right of the worker was violated. Much of trade
union philosophy has been based upon this theory of vested
interests.1 In other words, the workers have objected to
being deprived of their jobs in an arbitrary and unjust
manner. With this belief deeply ingrained in the minds of
all workers, restriction of output has become a normal
action of labor.

Furthermore, managers of businesses have sought to
protect their interests by limiting the supply of their
products. It has become one of the accepted and legitimate
phenomena in business. In fact, 'the governments sanction
such practices and the courts protect the practioners'.z
Ihen.workers have sought to protect their interests by such
practices, they have beenssverely criticized by the public
and have often been fired by management. Union leaders feel
that as long as employers are allowed to restrict or limit
the supply of their products in an attempt to profit by
such action, workers should be accorded the same treatment.
.1. Sidney Went, Industrial Democracy, pp. 562—72.

.2. L..Ardzronni, "Philosophy of the Restriction of Output“, Annals of the

American Academy of Political and Social Science, Sept., 1920, wol.91,
p. 700

63

Specifically, these policies seek to protect job
security. In the long run, displaced workers may be re-
employed. But, as unions are primarily interested in the
immediate interests of a small group, and not in the welfare
of labor as a whole, policies of this nature are not contrary
to the business philosophy of trade unionism.

Hanagement has criticized the unions for practicing
restriction of output. They think that the unions, by so
doing, are holding back the energetic and ambitious worker.
J. R. Commons says this is only a half truth and adds, "The
other half is in the circumstances of modern industry which
_ take away from the more energetic workman the fruits of his
energy and drive the slower worker beyond the point of en-
duranoe."1

In spite of this criticism there have been occasions
in which employers have entered into collusion with employ-
ees in an attempt to limit output.‘ This has usually been
done when the employer wanted to uphold the quality rather
than the quantity of work done?

The practice of the restriction of output is much
greater in scope than is commonly assumed by most people.
In speaking of organized workers and restriction Hr. G.S.
Iatkins makes the statement that x

'for many years unions have established a
frank policy of controlling output in order
to increase their power; to stretch out

available work; to avoid reductions in
piece rates, and to protect the worker from

1. J. R. Commons, op. cit., p. 129.

3. C. D. Dwight, "Restriction of Output", Nbrth American Review, Nev. 2,
1906’ Y°1e 1839 De Bees

3. J. R. Commons, op. cit., p. 129.

undue expenditure of energy. Such restrict-
ion is well exemplified in the limitation of
the number of bricks by the bricklayers' union;
in the refusal of the painters' union to allow
the use of a brush wider than four and a half
inches; in the demand by the plumbers'union
that pipes be cut and threaded on the job....'1
Little statistical data as to the amount of restrict—
ion of output among unorganized workers have been available
until recently. Formerly the assumption was that very
little restriction was carried on by other than union men.
Mr. I. S. Viteles cites a study which found restriction
present among unorganized workers. Out of 350 cases "823
instances were found of obvious restriction. These were
found in 105 establishments in 47 localities, representing
85 classified industries and 14 miscellaneous industries.'2
This clearly indicates that restriction among unorganized
workers is not only widespread, but very much in evidence.
The forms which these restrictive policies have assumed
are many. They have been in opposition to the use of
machinery, to the rules governing the type of tools used,
and to the regulations concerning the methods of operating
the machine. Frequently it was a limitation of effort or
refusal to work under the piece rate system of wage payment.
The policies pursued in defeating efficiency schemes were
uniform rates, shorter hours, restriction of the right to
hire and fire, admission and entrance to the trade, and
various jurisdictional policies. Finally, they often
culminated in an aggressive policy embodied in the strike.
Iorkers have felt that with the introduction of the

1. G. S. Watkins, The Labor Prohleg, p. 470.
2. M. S. Viteles, Industrial Psycholog, pp. 562-3.

65

machine and other labor-saving devices, the number of
employed workers in that particular trade was decreased and
unemployment resulted. Under such a system any benefit
which arose could go to the employer or to the consumer at
the expense of labor. The fact that any decrease in the
cost was reflected.in the price of the commodity was of
little consolation to the workers out of a job for they
were in no position to take advantage of the reduction.
Eventhough displaced workers might, in the long run, be
replaced in other industries, no method or device was present
to tide them over this period.

One method adopted by the unions for self-protection
from such an evil was to limit their output per unit of time.
Output was limited to the available work on hand by setting
a maximum, formally or informally agreed to, which no worker
was to exceed. This policy of restriction although not
created to limit output directly, did have such an affect.

Again the workers have attempted to protect their inter-
sets by using the strike. As aiule, it was used only to
enforce a collective agreement or to win a dispute over a
basic issue which vitally affected the 'rights' of the workers.
The strike has been the most effective weapon of the union.
It is generally used when all other policies have failed.

Gppositionrto_the free use of management's power to
hire and fire is also related to efficiency and output. The
aim of this opposition is to prevent competition between

workers for jobs. Competition rises when a given plant in!

creases the efficiency of its workers by hiring only the

66

most efficient. Other firms, in order to compete, are forc-
ed to out wages. After a general cut in the wage rate, the
more efficient firm may also out the wages of its employees.
Thus, in either case a vicious circle is organized which
operates to the disadvantage of the workers. For the same
reasons unions have proposed a uniform rate of wages for all
labor of a given kind. Unless a uniform rate can be estab-
lished, management might use unsuspecting workers to 'beat
down' the wage rate.

Jurisdictional differences are related to efficiency.
Anything which demands the use of two men to do the work of
one is a failure to utilize the efforts of both men to the
maximum. Difficulties have risen through technical changes
in industries. The unions feel justified in abiding by
favorable decisions handed down in such issues because skill
is protected and workers are prohibited from performing the
less skillful tasks of skilled trades.1

A glance at some of the unions' experiences with the
restrictive policies will throw light upon the forms taken
by these rules and regulations. A great body of such rules
is in force in the building trades. These rules have been
set up to protect the workers from the dynamic changes which
arise from methods of production, business conditions, and
management. The influence of such rules is to

'Check the progress of these changes, to
make the introduction of machinery gradual,

to standardize the operations of management
and to prevent a sudden shift in the workers'

1. For a more complete and detailed discussion of the effects and inefficien-
cies arising from.jurisdictiona1 disputes see, E. E. Cummins, The Labor
Problem in the united States, chapter 7,especially pp. 245-53.

67

status. The rules are, in theory, there-
fore, conservative and Eppear to favor the
.status quo in industry".

The Stonecutters go so far as
"to forbid any member receiving more than
the other men on the same job. The officers
defend this rule on the ground that it is
the only”way to prevent a few men in return
for twenty-five or fifty cents more a day
from setting a swifter pace for the others
and so increasing the day's output demanded
for the minimum wage. Unless all men on the
same job receive more than the minimum, which
rarely occurs, except when men are in great

demand, this prohibition amoupts to making
the minimum a union maximum".

During the war, the pressers in the Rochester Cloth-
ing industrwaanted an increase in the weekly wage rate.
An agreement was finally reached betwen men and management
that if the pressers would increase their output ten per
cent, wages would be increased a like amount. This example
indicates two things: first, the‘workers were able to
increase their output thereby designating that restriction
was practiced; second, that where the workers can be shown
or guaranteed that their wage rate will not becut after
efficiency has been increased, they can and will increase
their efforts.3

Hr.‘lhiting Williams recites a case in which a union
worker told him that he paid a fine of 825.00 to his union
for working too hard and too fast .‘ Although this is not

a common practice of all, or even.the majority of unions,

1. Sumner Slichter, 'Labot'Policies and Industrial Output“, Social Science
Research Council, Hanover Conference, 1926, p. 198.

8. D. A. MbCabe, "The Standard.Bate in American.Trade Unions", John.Hopkins
‘University Studies, 1912, vol. 30, p. 312.

3. W. M. Leiserson, op. cit., p. 44.

4. Whiting Williams, "Let's Try'Going Along With 'EmP, Collier's, July 5,
1984, vol. 74, p. 12.

68

it is hardly an exception to trade union practice. The
ilsual method is merely to warn the individual worker who
‘thus exceeds the limit.

Attitudg 9f the English and German Workers Toward Scientific
Hanag gment . fl, ,

Before closing this chapter it might be well to indicate
'the attitude of IEnglish and German trade unionists toward
scientific management. In England the workers will have
nothing to do with such a program.1 The answer as to why,
lies partly in the natural conservativeness of the English
people and partly in the strength of the English trade unions.
British unionists have‘watched with great interest the ex-
perience of American labor with scientific management. In
spite of the strength of the British unions, they fear the
change which migit be wrought if scientific management were
adopted and practiced.

In Germany the Opposite tendency is found. Labor is
willing to accept more efficient methods of production
providing workers are properly safeguarded in any proposed
change. The situation is different in Germany than in the
United States or Great Britain as efficiency "appears as
a.central scheme of industrial dealing and co-operation is
formulated in the law of the land.“ 3 This, of course, is
due to the devastating affects of the war on.German industry
and an attempt on the part of Germany to regain her former

position in the industrial world. As a great part of

1. C. H. Northcott, "Scientific management in England", Industrial Mhnagg:
Mt, July, 1020. De 57s

2. B. Mk Selkman, "Recent Trends in Industrial Relations in Great Britain
and Germany", Bulletin of the Taylor Society, Oct., 1928, vols 13, p. 186.

69

Germany‘s industry was rendered useless by the War, it has
been relatively easy for her to begin on a new footing with
the inclusion Of more up-to-date methods of efficiency in
rebuilding her industrial system.

anclusions.

So we have seen the types, forms, and kinds of

efficiency'restrictions practiced by labor. This has also
included a recognition of the more prominent objections

of unions to efficiency systems. It has shown that there
are both.direct and indirect types of restrictions to
efficiency. 0f the indirect types the more outstanding ones
were concerned with hours, wages, apprenticeship, standard-
isation, union membership, and the attempts to control the
labor supply. 0f the direct types, two kinds have been dis-
cussed, - namely, Opposition to machinery, and the conscious

withholding of productive effort or restriction Of output.

70

CHAPTER V
THE NEW POINT OF VIEW

The views set forth in the last chapter were those of
labor's early opposition to the efficiency movement; this
chapter seeks to present the new point of view. This new
attitude is one of co-operation with management in an effort
to increase the productive factors of industry. It is in
sharp contrast to the old attitude of opposition and restric-
tion toward the efficiency movement.

It should be noted early in the discussion that this
co-operative attitude was notxredominant throughout the
whole of organized labor. However, labor is continually
becoming more and more imbued with the co-operative spirit
and idea. So far, only the more progressively minded organ-
isations of a few industries have adopted the new policy.
Gustave Geiges, President of the Full-Fashioned Hosiery
workers of America, constrasts the old and new attitude when
he says,

'The essential difference....between the
worker today and the workerft on years ago,
is....that the average worker now realizes
that the 'boss' is not the industry, but
sees the industry first, with the boss as
part of the picture. Not only is the
worker beginning to see industry as a whole,

but he is beginning to see his trade as 1
part Of the entire social and economic system.‘

I1. G. Geiges, "New Relations Between Capital and Labor", (phamplet).1925,
p.6.

71

This idea is borne out by the present attitude of organized
workers toward scientific management.’

This is such a radical change of thought that an an—
alysis of its raison d'etre is necessary.

As has been mentioned before, the leading efficiency
plan in the United States has been scientific management.
The war has been one of the major factors in explaining
labor's changed attitude. This explanation can be found in
the close proximity in which labor and scientific manage-
ment were thrown during this period. Because of the great
demands required of production in these times, every avail-
able means for increasing production was demanded and enfor-
ced. Harmony and co-Operation between all factors of
production were compellent. This forced labor to associate
and work with management.

‘Effects of the War on Labor's Attitude.

Labor observed several things when coerced to work
under scientific management plans. First, employers who
followed the principles of scientific management were most
consistent in regarding and promoting "labor's interests
and....to conserve labor's gains after the war".2 Second,
many of labor's former policies were found to be false.
Third, Observation also proved that machinery did not work
to the disadvantage Of labor. And fourth, time-and-motion

study was found to be a minimizer of effort.3

1.B.S.Person, "Future of the Workers Under the New Industrialism",

The Painter and Decorator, Jan., 1931, Vol. 45, p.2.

2. H.S.Person, "Scientific Management", Bulletin of the Taylor Society,
0013., 1928, VOle 13, Pe204e

3. Ibid.

72

These discoveries were in direct contradiction to
former attitudes. The change in each case was due to a
better understanding on the part of labor of the aims, object,
and purpose of scientific management and a better understand-
ing on the part of mangement of labor's aims and purposes.
This led to a change in the attitude of management as well as
as a change in the attitude of labor. This fact must be borne
in mind throughout the remainder of this chapter.

Changes in the Philosophyof_Labor.

The change in the philosophy of labor should be con-
sidered as it designates the completeness with which the
attitude toward the efficiency movement was altered. The
new philosophy is also important as it is the basis for the
attitudes which will be discussed a little later.

The change in the philosOphy has led to a new outlook
upon the subject of efficiency. This change has been recog-
nized, not only by the leaders of organized labor, but also
by the American Federation Of Labor in convention. This
shows the rather widespread influence of the new attitude
among labor as a group.

Attitudg of the American Federation of Labogand Its Leaders.

As the conventions of the American Federation of Labor
determine the policy Of the organization, any change they
take cognizance Of is of the highest importance. Besides this,
the President of the American Federation of Labor, as
chairman of the Executive Committee and editor of the offici-
al publication, is placed in a powerful position in forming
the attitude of the members. For these reasons it is

necessary to observe any changed attitude of the organization

'73

or its leaders.

Co—operation with management was first recognized by
the American Federation of Labor in 1918 when it went on
record as favoring two features - namely,

"First a committee of the workers would
regularly meet with the shop management
to confer Over matters of production, and
second, such committees could carry beyond
the foremen and superintendent, to the
general manager or the president, any
mportant grievances which the workers may
have with reference to wages, hours, and
conditions”. i

This shows that the first thought on the part of labor was
that co-operation could be useful in Obtaining a fuller
recognition of their desires. No attention was taken at
the time of the fact that the efficiency of the labor force
could be brought into this scheme without ill effects upon
the workers.

The attitude of the American Federation of Labor
Convention of 1925 did recognize this point. It went on
record as follows:

"We hold that the best interests of the wage
earners as well as the whole social group
are served, by increasing production in
quality as well as quantity, and by higher
wage standards which assure sustained pur-
chasing power to the workers and, therefore,
higher national standards for the environment
in which they live and the means to enjoy
cultural opportunities. We declare that
wage reductions produce industrial and
social unrest and that low wages are not
conducive to low production costs. We urge
upon wage earners everywhere, that we oppose
all wage reductions and that we urge upon
management the elimination of waste in pro-
duction in order that selling price may be

1. Mathew W011, "Industrial Relations and Production", Annals of the
American Academy of Political and Social Science, Sept., 1920, Vol.91, p.9.

74

lowered and the wages higher.

_ Social inequality, industrial instability,

and injustice must increase unless the

workers' real wages and the purchasing

power of their wages, coupled with continu-

ing reduction in the number of hours making

up the working day, are progressed in pro-

portion to man's increasing power of production." 1

This is really a remarkable change in the attitude of labor
when it is considered that in only seven years (1918-1985)

the organized workers officially changed their outlook on

the question of efficiency and increased production.2

Samuel Gompers, late president of the [American Feder-
ation of Labor, in his later years believed in the principle
of co-operation. He thought that co-Operation, as a form
of industrial self-government, could be worked out so as to
protect or preserve all which was valuable in individualistic

industry and, at the same time, assure better adjustment of
3

the individual worker and the industrytn the new industrialism.
lilliam Green, the president of the American Federation
of Labor noted this change in point of view and commented:

'.Many of our concepts are giving way to newer
and more progressive points of view. The
relationship of management to labor has
changed and is changing. The mental attitude
of labor toward industry and industrial processes
is undergoing adjustment. Management is under-
standing more and more that economies in
production can be brought about through the
co-operation of labor and the establishment
of high standards rather than.through the
automatic control and exploitation of labor.
Labor is understanding more and more that high
wages and tolerable conditions of employment
can be brought about through excellency of
service, the promoting of efficiency and the

l. Hm. Green, 'New and Advanced Position of Labor", Industrial Management,
April 1926, Vol.71, p.221. Cf. wertheim Lectures on Industrial Relations,
p.27.

20 360 Fe 73

3. F.T. Carlton,op. cit., p.2.

75

elimination of waste. It is becoming more

clearly understood that high.wages and a

higher standard of efficiency in industry

are correlated, and that the industry that

is best managed, most ecomonically controlled,

where workmanship il'of the highest order

under satisfactory conditions is maintained, 1

is the industry that can pay the highest wages."
The attitudes of the American Federation of Labor and its
two leaders have been quoted at some length as they ex-
emplify best the change in viewpoint.
Specific Reasons for Change of Attitude.

The attitudes of both management and labor have changed.
Labor's attitude has changed because (1) the aims and purposes
of management are better understood, (2) industrial condit-
ions are changing, (3) the cost of strikes is beginning to
be realized, (4) certain losses have been incurred by old
policies, (5) eduction has shown old policies to be erroneous,
(6) interests of labor are similar to those of management,
and (7) science could aid laboras well as it could manage-
ment.

Management's attitude has changed because (1) the
human element in industry is more fully recognized, (2)
time-and-motion study has begun to consider individual
differences, (3) the dynamic conditions of industry are
recognized, (4) the aims and purposes of labor unions are
better understood, (5) experimentation has indicated
fallacies of older scientific management views, and (6)
the advantages of co-operation have been demonstrated. Each
of these reasons will be considered in the following para-

graphs.

\1. Paul Devinat, op.cit., p. 487.

Changes in Labor.

As stated before, this change in attitude has not
filtered through the minds of all organized labor. The new
attitude prevails only among the more progressive leaders and
members. This situation or condition is to be expected only
when one considers that the American Federation of Labor is
a very large institutionf'and consequently affected by
inertia or lag.

"Changes in policies and ideals of a necessity
came slowly. Many of the leaders in the
organization have been such for the greater
of its career. They can not be expected
hastily and joyfully to repudiate their past
actions. It is to be anticipated that they

will insistently cling to terms and phrases
after the original significance has vanished.

,2
From this statement it can be readily seen why the co-
operative ideal has not been accepted in a relatively short
time by the whole of organized labor. As time passes and
these older leaders are replaced by the younger men, the
new point of view will probably become more prevalent and
more deeply ingrained into union structure and philosophy.
a, Change in'thg attitude toward£ggnagement. William Green
has demonstrated that the attitude toward management has
changed? The War forced labor to come into closer contact
with the leaders of the various efficiency schemes. They
saw during this period that when the plans functioned properly
labor was benefited as much as management. Labor leaders
felt that in certain respects, the efficiency movement was
1. The membership according to the Official Proceedings of the American
Federation of Labor for 1931 was 2,889,550.
2. F.T.Carlton, "The Changing American Federation of Labor", §gzzgz,

Nev., 21,1914, V01. 33, p.191.
3. See pages 82 - 83.
4 5

77

not contrary to the aims and wishes of the unions. That is,
they found that through lowering the costs of production,
a larger industrial income was left to be distributed to the
various factors of production. With their power of colleCt-
ive bargaining, workers were in a position to demand a fair
share of such increase. 80, anything which would increase
the income of industry made it possible for labor to demand
higher wages, shorter hours, and better working conditions.
This led to a higher standard of living in still another
way. Through lowercosts of production and through a keen
form of competition between manufacturers, the prices of
goods were often decreased. As labor was also the buyer of
the products which it made, it indireCtly benefited from
any decrease in price. This then, gave the workers a
higher standard of living. Thus labor was certain to benefit
in two ways — higher wages and lower cost of living.
b. Change in industrial conditions. The philOBOphy of
labor is of a dynamic character. Its beliefs rest upon
or are determined by surrounding conditions. This is appar-
ent in trade union history; when no other means than open
revolt were present to aid labor in maintaining its ends,
strikes resulted. Now that management is assuming a diff-
erent attitude toward labor, it is no longer necessary
except in unusual cases to use such an extreme method.
Thus the change in conditions has brought with it a change
in labcr's attitude.1

The dynamic character of the attitude of groups is a

1. E.E. Hunt, Scientific Management, p. 225.

78

factor of fundamental importance and its presence is so
common that few take notice of its powerful influence. It
is operative in influencing the minds of management as well
as labor. Its importance can not be too strongly stressed.
Iilliam Green declared that trade unionism has passed

through distinct periods or phases of thought. He says,

“The trade union movement has been passing

through that period when physical controver-

sies and the tactics of force were most

effective; it is now in a period when its

leaders seek the conference room, and there,

by exposition and demonstration, convince the

conferees of the justice and wisdom of labor's

opposition'.l
This indicates that the conditions in which labor finds
itself have changed. It also indicates that labor is aware
of these changes in conditions and has changed its attitude
to the extent that it is now willing to co-Operate with
management to increase the efficiency of industry in a
peaceful fashion.

0. Cgst of strikes realiggd, Labor leaders have begun to
realize the tremendous cost of strikes. This change is
apparent when one considers the fact that unions have to
rely less upon the strike and more upon co-operation in
dealingvdth industrial problems. That is, they have turned
to co-Operation as the best method of protecting their
rights and power of collective bargaining.2

The cost of strikes in dollarsisand in intangible
losses becomes apparent for the first time. Although the

former is hard to measure, the latter is almost impossible,

1. Paul Devinat, op.cit., p.473.

2. wm. Green, "Changing Conditions", American Federationist, July, 1928
vol. 55, pp. 785-6.

3. E.E. Cummins, The Labor Problem in the United States, pp.335-4

for the intangible losses suffered seldom show up quickly.
If the workers are fortunate enough to win a strike, a
feeling of emnity remains on the part of management toward
the unions. This may be concealed to a great extent, but
its presence is a deterring factor to any peaceful negotiat-
ions. In the future, management is less likely to concede
anything to labor unless forced to do so; the first
Opportunity to injure the unions will be grasped and used
by management.

The strike is also very hazardous, for, if lost, the
job usually disappears with it. Unions often hesitate to
resort to its use because if the strike is lost, the union,
as an organization, is ruined in that particular locality.
It may take several years to regain strength both in
members and dollars. These facts have caused labor to
think well before calling a strike.

d. Losses from old policies, Some of the assumptions on
which labor's former policies were based have been.found to
be fallacious. Thus, it has come to be realized that (l)
the introduction of machinery could not be prevented, (2)
high wages were not brought about by restriction of output,
(3) skill was not decreased by machinery, and (4) job "
study was not detrimental to labor. All of these have
resulted from experience with various efficiency schemes.

Bet only has labor found the policy of opposition to
machinery to be futile, but it has also found that the
pursuance of such a policy “delays or makes impossible,

the adoption of measures which may mitigate the hurtful

79

effects of the introduction of machinery".’ The realizat-
ion of this is quite revolutionary when it is remembered
that a decade ago a serious objection was made to the
introduction of labor-saving devices.

This change in attitude has been slow in coming for
”the old feeling ground into workers by short-sighted em—
ployers, that the harder a man worked the less work there
would be for him to do, could not be eradicated overnight."2
In some of the unions the old antagonistic policy is still
followed. 'Ihis is particularly due to the fact that its
leadership is in the hands of narrow-minded leaders who
have been unable to see or profit by the experience of
some of their fellow unions.a

Labor has also discovered that when forced to work
with labor-saving instruments, wages have increased in pro-
portion to the increase in the productivity of the worker.
This has been contrary to the union teachings. In the face
of this, faith in the old idea of decreased earnings brought
by the increased productivity has been shattered. Although
the immediate effects of the introduction of machinery might
have been injurious to the workers, sufficient time has
elapsed to prove that labor gains from its use. The attitude
of the employers also changed; during this transitory
period those who had been short-sighted and had taken the
profit of the workers' increased productivity for them-
selves began to realize their mistake.
1. G. E. Barnett, "Chapters on machinery and Labor: Trade Union Policy",
Quarterly Journal of Economics, Feb., 1926, Vol.40, p.214.
2. G. Geiges, ”New Relations Between Capital and Labor", pamphlet,

American Federation of Labor, 1929, p.4.
3. G. E. Barnett, Chapters on Machinery and Labor,passim.

 

81

It was found that instead of there being a decrease
in skill by the entrance of the machine, a shift of skill
resulted. In place of the old handicraft-skilled worker,
a new class of workers was rising. These were machine
operators who possessed a different kind of skill. It was
necessary for these workers to be alert, competent, and
skilled in the use of machinery if efficiency and safety
were to be maintained.1

This loss of skill, which worried many unionists, was
nothing more than the replacement of the old handicraft
technique by that of the machinist. It did have a harmful
and injurious effect upon the unions that did not see the
futility of opposition. They soon began to lose members,
and it eventually caused the disintegration of the union.2
The unions that were more farsighted, or had leaders who
were, immediately began to organize the new class of workers.
Eventually the unions that followed this practice had, in
many cases, the majority of their membership composed of
this group. Thus, some unions profited by this condition
while others lost.3

Finally, organized labor was forced to change its
policies because it found that job study was as great an
aid to workers as it was to employers. Laborers found that
by means of job study, inequitable conditions of the work "*%~

were corrected, safety was increased, strength was

*1. R.w;Bruere, "Lost - $44,000,000, or the Human Cost of Speeding Up:'
American Federationist, 0ct.1928, Vol.55, pp.1204 -5.

2. This was the experience of the Cigarmakers"Union. Cf. D.J.Saposs,
“Realism.in Labor Strategy", American Labor monthly, Oct. 1924, Vbl. , p.26.
3. The Cigarmakers' lost while the Typographical Union, by its accepting
the machine and organizing its Operators, avoided ruin.

82

economized, and the best interests of labor were promoted.

The inequalities which job study corrected were those
arising fromtthe unequal distribution of work among the
men. For example, two men performing the same task might be
doing unequal amounts of work for the same pay. This [as
attributable to the guesswork fashion in which work was
passed out. By scientifically determining the amount of
work demanded of each man, the use of job study removed this
inequitable condition.

Similarly , physical inequalities between men were
readily seen from job analysis. By such a method a less
able worker could either be transferred to a job more
suitable to his physical abilities, or less than the stand-
ard amount of work could be requested from him, In either
case these inequalities were shown up and provided for by
the use of the job study.

safety could be increased, for the dangerous features
of production were brought to the attention of management
in the reports of the job study men. For example, if a
particular operation involving the use of a punch press
were investigated, the danger to the operator's hands and
arms became conspicuous. When brought to the attention of
management in this way, guards were more quickly provided,
and it no longer became necessary for an injury to occur.

Ihen management began to recognize the presence of the
human element in industry, greater precautions were taken
toward anything which might lessen the efficiency of the

labor force. Thus, the tremendous cost of industrial

83

accidents began to penetrate employers' minds. Management
saw for the first time that it was adversely affected by the
loss of the services of experienced workers whose injuries
might have been prevented had proper precautions been taken.
Any measure to lessen accidents was favorable to labor as

it had previously borne the cost of any unfortunate occur-
rences.

Furthermore, the strength of the workers was economiz- k’
ed by the scientific determination of the task. They found
that job study was not necessarily used tospeed them up and
sweat them, but it was rather an attempt on the part of
management to find the maximum speed at which workers could
be expected to produce with the least physical and mental
exertion. This was quite contrary to the old idea. It is
to be remembered, however, that the experience which was
the foundation of the old attitude was the result of abuses
to which iabor had been subjected in the early days of the
efficiency movement. As it passed from the experimental
stages, the greater part of these abuses also passed.

0. Education as a cause for a change‘in_attitude. The
first realization of the advantages of a co-operative
policy was found to be among the few prominent leaders of
the unions. The only way in which this attitude could be
spread among the rank and file of the workers, and less
prominent leaders, was through an intensive educational
program. This was promoted in various ways, through the

official organ, the American Federationist, various other

union periodicals, and through personal contacts by means

84

of speeChes.

Not only was the new attitude transmitted to the rank
and file in this manner, but through such an educative O
policy the leaders of labor saw for the first time, effic-
iency schemes in their true prospective. The leaders were
educated to the new aims and objects of the efficiency move-
ment and they in turn, passed them on to the unionists by
the same~medium. This program - education - now plays a
prominent part in all union projects.

The importance of such a policy is well expressed in
the following quotation: The road to successful unionism
lies in the workers, '80 educating themselves that they
will be able and willing to do morerwork in return for larg-
er pay, rather than in fighting to do less work for the same
pay or the same work for larger pay:1 This policy has been
adopted by the more progressive members of organized labor.

f. Mutuality of interests between:;ebor and management
realized. Labor leaders have begun to realize that em-
ployers' interests were also labor's. This has been an
important factor in labor's abandonment of old policies and
attitudes of opposition toward the efficiency movement.
Workers see for the first time that the ills of the laborer
were the same as the ills of the industry? and that the
success of management meant the success of labor. 3 That
is, labor is beginning to see that even though management
adopts and has adapted more efficient methods of production

for their own protection and gain, the benefits of such a

1. Paul Devinat, op.oit., p.471. (quoting Charles.M. Schwab)

2. G. Geiges, op. cit. p.8.

5. , "Labor's Idea Concerning Management”, monthly Labor Review,
March 1926, Vol.22, p.554 (quoting William Green).

85

procedure are equally advantageous to labor.

The advantages accruing from such a policy are trans-
mitted to them in the form of higher wages. This necessarily
happens because their productivity is increased by such
schemes; therefore, management can not only afford to pay
higher wages to get the more efficient workers, but is
forced to do so in face of strong competition. Labor,
through its power of collective bargaining is placed in a
favorable position to take advantage of this condition.

g. geieneecould aid labor was realized. Labor, until the
Iorld Iar, had looked askance at anything which pertained
to or hinted of being scientific. This was the result of
experience with the early forms of scientific management.
But, after being forced into contact with various forms of
scientific management during the War, labor soon came to
the conclusion that it could be used to their advantage as
well as to that of management's.

This led to the new point of view - co-operation with
management. It has now reached the point where labor em-
ploys the services of efficiency experts and production
engineers - a thing undreamed of twenty years ago. As
I. O. lichtner puts it, "Its leaders (labor's) have failed
to appreciate that science could be of service to them as
well as to capital”.1
Reasons For Change in Management's Attitude.

So we see the change in labor's attitude has been

»psrtioally a result of causes directly traceable to fallacies

l. W. O. Lichtnsr, ”Time and Job Analysis in Management”, Industrial Man-
ement’ septo’ 1920’ V01. 60. p0 2020

 

of some of their former assumptions. As mentioned before,
another set of causes has been present which have been in-
strumental in changing labor's attitude - namely, changes in
management's attitude. These must also be considered if a
complete picture of labor's new point of view is to be seen.

Employers have changed their attitude both toward unions
and efficiency schemes. Changes wrought in the latter have
been in specific phases of the movement, harmful to the aims
for which they were created. These changes have in turn had
great influence in<causing the attitudes of the unions to-
ward the sfficiency movement to change. Each of the reasons
previously citedlare of sufficient importance to warrant a
separate discussion. With this brief introduction an analysis
of these reasons follows in the next few pages.

a. Rggognition of the human element in industry. Employ~
ers have found that desired efficiency can not be obtained
without the aid and consent of the workers regardless of the
adoption of labor-saving machinery. Human efficiency is
essential to mechanical efficiency. Human hand and mind are
its control. Workers with an amiable feeling toward the
management turn out better work than those who hold a resent-
ful attitude. Thus, if workers are not taken into considerat-
ion, the success of efficiency schemes will be limited to a
great at ent .2

This change in management has been important from the
standpoint of organized labor. Workers no longer feel that

management is solely interested in selfish desires for ways

1. See pages 88-4. ”7

2. "The Way to Real Efficiency", American Federationist, April,
192 , v0 . 36, p. 402.

87

are now sought ty which the health and welfare of the em-
ployees may be protected. This, then, has aided the changing
in the attitude of all workers toward the instruments, aims,
and purposes of the efficiency movement.

b. Change in management's attitude toward unions. Manage-
ment's attitude toward unions has been instrumental in
changing the attitude of the workers toward efficiency plans.
Hanagement has learned that it is to their advantage to
bargain collectively withtheir labor force, as the decisions
agreed to by both parties can be relied upon by management
in the future. That is, if an agreement is reached concern-
ing wages, management knows that no trouble will develop
over the question during the life of the agreement. Further-
more, it is easier to deal with the men as a group than to
bargain with them individually.

Experience has also proved that a much better feeling
is created among the men toward management when they are
allowed an independent form of organization. While company

unions could give management the advantage of dealing with
the workers as a group, agreements reached are less satisfact-
ory, for the workers sometimes feel that they have been
coerced. This does not provoke fair and impartial treatment
of labor. As long as a strained feeling of this sort exists
on be part of workers, efficiency is hampered.

Employers have also found that when speaking of science
in management of men, its best examples can be found among

labor leaders.1' These leaders represent a large body of men

1. E. E. Hunt, op. cit., p. 223.

88

and, if these leaders are to remain at the head of their
unions their position demands clever and adroit handling.
Real science is management, especially management of men,
is to be found in the standard unions. Such leaders must
not only convince these outside organizations of the value
of a given plan, but must also satisfy all the members that
their actions have been the proper ones.

A reflection of this favorable change in the attitude
toward labor unions rises from the unions themselves. In
any discussion of the causes for labor's change in attitude
toward efficiency, it is essential for favorable change in
the attitude toward labor unions to be given due credit.

0. Recognition of the dynamic character of industr . In
the past, management failed to recognize adequately that
industrial conditions were ever changing. The action of
management conveyed the idea that they believed once an
improvement was accepted and incorporated into business, no
other changes ever became necessary. This was very much in
evidence in their treatment of labor. If a rise in wages were
accorded the workers, no further attention was paid them.
Prices of the commodities of living might rise ever so high,
yet management took no cognizance of that fact when the
laborers wanted another advance in wages. This was the
complete ignoring of two factors - namely, the human factor.
and changing conditions. The former has been discussed
previously and needs no more than to be mentioned in this
connection.

Changes in industrial conditions make alterations in

89

policy necessary. This, many managements failed to do by
making their industry too highly functionalized and stand-
ardized.1 By adepting such a policy, the duality of
flexibility was lost to industry. This made it cumbersome,
unweildy, and hard to adjust to ever so slight a change in
conditions. Thus, this same attitude was often carried
over in dealing with the labor problems. tit only encouraged
a similar attitude on the part of labor toward management
for it felt a fight was necessary in order to obtain any
concessions demanded by a change in industrial conditions
which affected them. Management's realization of this has
had a similar affect upon the attitude of the organized
workers and has been refleCted in their attitude toward the
efficiency movement.

d. Attitude toward experimentation changed, Experiment-
ation has been a decided factor in the formation of
organized labor's attitude toward efficiency. Although
this has been<3arried on by management, it has had a pro-
found influence upon the workers. Hanagement learned
through several years' experience with various efficiency
schemes, that true efficiency can not be brought about with-
out the aid of the workers themselves.z It forced them to
eliminate the objectionable features of efficiency schemes.
They have found, in spite of all ideas to the contrary,
that certain features of efficiencyto which workers objected

caused the failure of the whole plan.

1. L. A. Wood, Unionsmanagement Co-operation on the Railroads, p. 8.
2. G. C. Brown, "Workers' Participation in Job Study", American Federa-
tionist, June, 1927, vol. 34, p. 706.

90

-For these reasons, employers now believe that it will
be easier to deal with the organization of the workers that
is intimately acquainted with the problems of industry than
‘to be forced eventually to deal with governmental agencies
that know nothing about industrial conditions and problemsfi'
As has been mentioned before, this co-Operative attitude on
the part of management has been met by a similar one by labor.‘
This change in the mind of each group has mutually affected
each other.
e. Recognition of the advantages of co-operatigg. All
of the reasons discussed in the preceeding pages have cul-
minated in management's realization that a policy of co-
operation carried on between it and organized labor has
definite advantages of mutual benefit. A pursuance of this
policy can be of value to management, for an alliance of this
sort with the powerful organizations of labor will create a
favorable frame of mind toward efficiency policies. For
example, unrestricted output will be given if the workers
are allowed a voice in the control of industry and a share
in thslnnefits derived from their increased productivity.
The need of restrictive policies would no longer be necessary
to obtain the desired ends and would therefore rm discarded.
Furthermore, when the aid of organized labor is enlisted,
a potential source of salesmen will be available.” Other
union men will.be urged, through the many union publications,
to purchase the goodsof co-operating employers. Until recent-

ly this fact was not appreciated by management. The

l. G. Geiges, op. cit., pp. 2-3.
2. O. S. Beyer, Jr., "That Acid Test - The Ledger - Indicates Success",
Journal of the Electrical lbrkers, Dec., 1930, p. 669.

91

reOOgnition of it has led to the adoption of a more favorable
attitude toward trade unions.
Some New Views ombor.

Several new labor views are worth considering at this
time. They will demonstrate the<complete “about-face"
which labor has made in regard to the efficiency movement.
These are in relation: (1) to wages, (2) to standardization,
(3) to scientific management, (4) to restriction of output,
and (5) to the knowledge of management's financial position.
Each of these in the past has been more or less bitterly
defended and thought of as being irreconcilable with effic-
iency schemes.

' Iorkers formerly believed that the only way in which
wages could be maintained, or raised, was through restrict-
ion of output and other defensive and restrictive policies.
A new attitude has appeared in place of this. Labor is now
strongly convinced that wages can only be maintained and in-
creased by the elimination of waste and the introduction of
economy processes.1 Only in this way can wages continue to
rise in the face of falling costs of production. Further-
more, increase in the efficiency of the workers and
management are compulsory if standards of living are to
cpntinue rising.

Howeger, a compensatory feature is present in the
fact that more efficient workers will be attracted by the
high wages. 'This in turn, "is reflected in the volume of
productivity, and in many instances in the quality and
character of the manufactured article.'2 It is, indeed, a

1n.IMu Green, “Unions Reduce Industrial Waste”, ggmphlet, 1929, p. 4.
2. Ibid.

revolution of labor's attitude.

Labor formerly looked askance at any proposal to intro-
duce standardization into the plant. This idea has been
supplanted by a more favorable attitude as the workers now
believe that they "benefit through whatever makes for more
economical production because less of the income of industry
is spent in liquidating losses".]' This is of benefit to labor
as a greater part of the income of industry is left from
which wages can be increased. Indirectly efficiency may have
a beneficial effect. If the savings thus derived are trans-
mitted to consumers by lowering the price of the manufactured
article, the increase in the physical volume of output caused
by increased demand3 will require more men to be hired and
possibly higher real wages. While the monetary rate of
wages may not increase, the increase in the physical volume
of goods may lead to more steady employment which, in turn,
is a greater aggregate wage for workers so affected.

Labor has also changed its mind in respect to scientific
management for two reasons. In the first place, it sees for
the first time that science can be of value; that is, the
old method of guess work is replaced by collected, recorded,
and correlated facts.These facuzin the hands of labor are
Just as useful to them as to management. In the second
place,

“Labor is interested in the successful man-

agement of industry because it reasons that
with the introduction of economy processes,

1. Wm. Green, ”Effect on Labor of the New standardization Program of
American Industry", Annals of the American Academy_of PoliticalL and Social,
Science, May, 1928, vol. 137, p. 43.

z. The assumption is that demand is elastic.

93

in the development of efficiency and

increased production, the cost of manu-

facturing and production can be reduced

without lowering the standard of the

workers or reducing wages".l
This is quite a contrast to the attitude as set forth in
the last chapter.

Labor has dropped all its objections to scientific /¥
management and "Taylorism" except its objection to the bonus.
This change has been very radical and in many instances the
unions have taken the initiative in promoting more efficient
methods of production in a given plant or industry.2

In addition to the favorable attitude now assumed by
labor toward scientific management, requests are made by
labor for knowledge in the determination of business policy.
That is, the workers want to know about costs, supplies,
the source and the reliability of the supply, all the about
the product and overhead, and Operating costs:5 These seem
to be unusual requests of workers, but labor thinks these
demands are justified as they are of vital importance to the
workers' life. Furthermore, if organized labor is to com-
pete with management in the elimination of waste and the
reduction of production costs, it becomes necessary for it
to have a knowledge of these things.

Furthermore, labor leaders feel that science must
return the 'conditions' which steam power took out of their
lives. They refer particular here to the loss of pride of
workmanship, decrease in the rewards for skill and ingenuity,
1. Wm. Green, "Unions Reduce Industrial Waste", Eaa22l2331929: p.6,.

2. This will be pointed out in the following chapter.
3. S. Gompers, "Union Labor and the Enlightened Amployer", Industrial

Management,L April, 1921, Vol.61, p.239.

94

and the host of similar 'conditions' which the workers of
the handicraft stage have lost to the machine.

Finally labor has changed its mind in respect to its
previous policy of restriction of output. They have for
some time recognized the evils. But, in order to prevent
an increase in production at the expense of the worker it
has been necessary to continue this policy. Labor now feels
that if fair treatment is guaranteed, it is perfectly will-
ing to co-operate with management to increase output.1

This attitude is reconciled by the fact that the unions
are now ready to, and will if allowed, assume responsibility
for the maintenance of output .2 That is, they are willing
‘to be held accountable for output if management will guar-
antee that the costs of such increase as is obtained will
not entirely be borne by the laborers.

Eggmsof Q;ganized_Labor's Change in Attitude.

The change in the attitude of organized labor toward
the efficiency movement has also caused a change in its
methods and policies. In place of the old policies or rules
which acted as a check to any attempts to increase output,
new policies have been substituted which are in strict accord-
ance with such plans or schemes. These new policies or
methods of encouraging efficiency are: (1) research, (2)
elimination of waste, (3) programs for increasing product-
ion, and (4) Union-Management Co-Operation.

Research is the method used by scientific procedure
1. R. F. Eerie, "Why Organized Labor Opposes Scientific management”,

Qparterly Journal of Economics, Nev., 1916, vol. 31, p.74.
2. I. M; Leiserson, 0p. cit., p. 45.

95

in the investigation of union and industrial problems.
Previous to this change in attitude, the advantages of such
a usage had been neglected and ignored. And similarly, the
problem of waste had received little attention or recognit-
ion from unions. From the results of research and studies
invvaste elimination, programs are formed for increasing
plant efficiency. These may act as a.direct or indirect
encouragement to the workers for increasing the physical
volume of output, or they may be confined to pointing out
to management where its own efficiency may be increased.
Thus, both efforts and materials may be conserved.

Finally, labor has adopted a policy of co-operating
with management in programs to increase the efficiency of
industry. In this chapter co-operation will be treated only
so far as its object, necessity, the basis for co-operation,
and the gains, results, or accomplishments are concerned.

In the following chapter specific causes will be given along
with a more complete and detailed discussion.

a. Research. For the first time unions are beginning to
gather statistics, analyze and measure the trends of many
of their problems. For example, the most reliable inform-
ation concerning unemployment statistics is compiled by the
American Federation of Labor. These figures are gathered
by the local organizations of the affiliated unions and then
sent to the headquarters of the American Federation of Labor.
lonthly figures of the total number of unemployed unionists
are compiled and printed in the official organ, the American

Federationist. The trend of unemployment is also measured

 

96

and closely watched. With the aid of this, the unions are
informed at all times of actual employment conditions. In
this manner facts are substituted for guess work.

This procedure is forming an attitude, on the part of
the labor leaders at least, which is nrationalistic, thought-
ful, and social toward all union problems....and all forces
affecting the industry in which the worker finds himself".1
The formation of such a scientific attitude on the part of
labor leaders is making a factual basis possible upon which
their actions and policies may be founded. It places labor
in an impregnable position when bargaining collectively
with employers or in other pursuits of its aims and desires.

The American Federation of Labor practices the policy
of research and has created a Research Department which
employs the services of labor economists, technical engin-
eers, and statistical experts. Some of the other large
unions have also formed a Research Department. Notable
among this group is the Brotherhood of Railway Carmen of
America whose research department has done a great deal in
aiding the co-operative movement on several of the railroads.
They carry on a continuous study of ways and means of in-
creasing the efficiency of these railroads.

b. Elimination of West . Many volumes have been written
on the waste which is present in industry. Criticism of
this tremendous cost has created an agitation sufficient to
bring its attention to organized labor. They have begun.to

realize that if waste could be eliminated, wages even in the

l. M; H. Hedges, "Door to Labor‘s Future", American Federationist,
My, 1932. V01. 39s, P. 741e

97

face of falling prices may be maintained, or even raised.
Previously, wages have been out when prices fall.

Labor leaders have not confined themselves to a pro-
gram of the elimination of material waste only. They
recognize two other wastes - namely, human and spiritual
waste. In their attack.upon waste they point out the 9“
enormous loss of human life through industrial accidents
and the dulling affect which specialization has upon the
minds of the workers. Loss of life due to accidents in
the United States is estimated to be in excess of 83,000
per year} The thing which unionists object to is that
many of these accidents are preventable. For example,
deaths due to mine dust explosions, a thing which makes.
mining a hazardous occupation, can be prevented by the use
of rock dusting.

Spiritually industrialism of today does not give the
worker a chance to express himself in his work. He is con-
fined to a few operations which are repeated times without
_number. A waste occurs here, for such a stupifying effect
is created that the attitude is carried over into the
worker's social relations. fthen, too, no provisions are
made for taking advantage of the ingenuity of the workers.
That is, suggestions which might improve the process or new
inventions which might be offered by the workers, are often
not allowed. Some plants offer prizes and other incentives
to encourage suggestions but for the most part if suggest-

ions are allowed they are not encouraged. All in all, a

l. E. E. Cummins, op. cit., p. 94.

98

great waste of the spiritual or mental efforts is present in
modern industry.

This attitude toward waste in industry has become rather
widespread among organized labor. The Atlantic City Con~
vention of the American Federation of Labor of 1925 went on
record as urging upon "management the elimination of waste
in production in order that selling prices may be lowered
and wages higher".1 This policy is now firmly established
in trade union action. Many more unions in several ind-
ustries are actively engaged in trying to eliminate waste.

0. Programs foréiggreasingproduction. Since the War,
organized labor has pursued a policy of trying to increase
production. This move has been comprised of two phases.
Some of the unions are in the first phase, others in the
second, and some have not yet begun action.

The first step, or phase, consists of an open declar-
ation favoring such a policy. This must also include an
educative program which will convert workers of a dissimilar
view to accept and practice this policy. The second step,
or phase, consists of the adoption of an actual program
for increasing production. This must include three things.
First, all strikes and disputes must be eliminated from
industrial relations as they are wasteful in themselves as
well as contrary to efficiency. Second, labor must consider
'an abundance of good work well done' as a desirable end,

because no other attitude can lead to successful increased

1. Irving Fisher, “Labor and Scientific management", American Federationist,
June, 1927, vol. 34, p. 694. _

99

production. Third, unions must contribute toward improv-
ing the technique of industry. Only in this way can output
continue to be increased.1

Labor leaders who sanction this policy are aware that
labor gains in two ways from such a policy. First, the labor
gains as workers, because its wages can continue to rise
with the increase in its productivity. Second, the workers
gain through a lower selling price of the goods for their
increased productivity lowers the unity cost of production,
and, in the face of strong competition, prices can be lower-
ed.

It should be added here, and the fact stressed, that
this attitude is not universal throughout organized labor.
It is only the more progressive unions such as the Brother-
hood of Railway Carmen of America, the Amalgamated Clothing
Workers of America, and the Amalgamated Hosiery Workers of
America that have adopted or will submit to such a policy.
Unions having progressive leaders are the only ones that can
see merit in efficiency programs. As yet even the leaders
of other unions, either very conservative in nature or led
by less broad-minded men, are not convinced of benefits which
may be derived from increasing production.3

d. Union-Management Co-operation. The fourth form which
organized labor's changed attitude has taken is Union-Man-
agement Co-Operation. Previously we have spoken of it as
‘unions co-operating with management'. This term, along

with 'co-operative management', will be used interchangeably

1. Perl Devinat, op. cit., p. 472.
2. The reasons for this may be found on pages 83-4.

100

in.the following pages.

Union-Management Co-operation has been defined by J.H.
IBooley, President of the New York Electrical Contractors'
Association, as

"Co-Operation on the basis of sympathetic
understanding on the part of each (labor
and management), of the problems of the
other....which demand....organization,....
conference,....compromise,....self—subird-
ination, (and)....indiv1dual courage”.
In view of what has been said of early union and management
relations, this has demanded a different attitude from each
of the parties. Neither, until recently, has been willing
to co-operate with the other.

The extent of this new relationship is not very great.
Widespread co-operation in this country does not exist for
three reasons? First, many of the important industries
of this country are not even partially organized. Second,
where organization is present only a few co-operative
proposals have been made and accepted.' Third, the policies
of many executives which include a favorable attitude toward
co-Operation are the exception rather than the rule.

The object of co-operative management is to improve
operating efficiency of the plant or industry; to intro-
duce new machinery or to improve the old; to reduce operating
costs by the elimination of waste and the introduction of

economies; to raise the general level of sanitation and

safety of the plant; and to increase the skill and efficiency

1. J. H; Hooley, "What Co-Operation.Ehe Done for the Electrical Industrlfi,
Journal of the Electrical Workers, Dec., 1930, p. 966.

2. , "Unionthnagement Co-operetion.in.England', new Repgblic,
Jae, ‘. 1928. '01s 53. De 181m

101

of theworkers.1

Each of these aims or objects is beneficial to labor
and management. All tend to increase the working efficiency
wand thereby increase the total income of industry. Manage-
znent profits in the form of lower costs of operation and
less labor trouble, and so this allows management a larger
profit. The workers gain through increased wages, better
'working conditions, and more harmonious relations with
employers. That is, few strikes and less disputes will arise.

Organized labor has a critical function in industry
which is brought out to its fullest extent under co-operative
plans. This function is critical both as to position and
as to judgement passed. In the case of the former, by
assuming a share of responsibility for the effective conduct
of industry, labor is placed as a governor upon production
and the effectiveness with which it can force management to
operate to the best advantage is a foregone conclusion. In
the case of the latter, organized labor can aid management
in improving the working processes as the workenaactually
do the work and are more liable to know the results of the
various processes of production. This means that the workers
can assist management by suggesting improvements which other-
wise would never be known.

Co-operative management is essential to industry. This
is true for maximum production can not be obtained where a

possibility of confusion, misunderstanding, and friction

l. Bureau.of Labor Statistics, “Beneficial Activitiesof American Trade-
Unions‘,‘U. S. Department of Labor Bulletin.£465, 1928, p. 154.

102

exist.1 The maximum of public service can only be given
when costs of production and prices are as low as possible.
Anything which interferes with this is contrary to the
good of society. Therefore, if co-operation between labor
and management will decrease friction, increase production,
lower costs and prices, it acts in the interests of society.

If Union-Management Co-operation is to be successful,
it must be placed on a sound basis. It becomes necessary
also, for both management and organized labor to cencede
certain things. Management should (1) allow the workers
to organize, (2) be willing to accept the representatives
of the unions for purposes of negotiation, (3) regard the
unions as helpful and necessary, (4) see that a definite
agreement exists as to mutual benefit, (5) stabilize employ-
ment as far as possible, (6) allow labor to share in the
gains of co-operation, and (7) establish co-operative
machinery . a

On the other hand, labor should (1) be well organized,
(2) have a clear conception and knowledge of what good
management is, (3) found its policies upon facts rather tha n
guess work, (4) agree to assume only a constructively
critical and co-operative purpose, and (5) agree that control
is not to be dual or joint, that is, the final decision must
always rest with management.3

Each of these acts which management and labor must do

are concessions on their respective parts. In each case a

1. Mhthew Noll, 'Industrial Relations and Production", Annals of the American
Academy of Political and Socigl Science, Sept., 1920, vol. 91, p. 9.

2. O. S. Beyer, Jr., I'Lailor's Contribution to the Scientific Organization of
Industry", American Federationist, Jan., 1928, vol. 35, p. 34.

a. c. c. Brown, op,[ cit., p. 12.

103

:full endorsement of these conditions must be acknowledged
‘by both and abided by. Further, these conditions are the
chain.of co-operation. It is no stronger than the weakest
of these points. The success of co-operation.depends upon
'the confidence which is inspired by the men and management
between each other. If either fails in that which it
agreed, co-operation can not be a success. This fact can
not be too strongly emphasized.

The machinery of co-Operation is the same as that for
collective bargaining?’ The only difference is that more
responsibility is placed upon the existing agencies under
co-operative management thus compelling them to be more
efficient .2 That is, unions have assumed responsibility
for certain things which they did not under collective
bargaining minus co-operation - for instance, they have
assumed a measure of responsibility for production. Manage-
ment assumes responsibility for fair dealings with labor -

a proportionate share in the increased profits, better
working conditions, and so on. With such a basis conscient-
iously adhered to, Union-Management Co-operation can hardly
avoid success. 9

So far co-operative management has only been an exper—
iment, but the success justifies further experimentation
along the same lines. The gains or accomplishment of co-
operation may be divided into three groups. First those
1. The machinery of co-operation will be discussed.more fully in the fol-

lowing chapter. Here it is only mentioned with reference to its importance
to the basis of co-operation.

2. O. S. Beyer, Jr., 'Railroad Unionémanagement Co-operationP, Pam hlet
American Federation of Labor, 1925, p. 9.

104

which are of a general nature, comprising a change in the
mental attitude of the productive forces of industry,
establishment of confidence and understanding, and better
service reflected in lower prices. Second, certain gains
arise which are of a direct advantage to management; .;or
instance, new effectiveness and economy of industry, ins-
urance against further labor troubles, and a new stimulus
to cast aside the old negligent and inefficient practices
which burden many industries. Third, those gains which
are of direct benefit to employees. These are a better
grip on the rights which the workers have already succeeded
in obtaining, higher wages, better working conditions, a
new interest in the job, and new affiliations with the
engineering profession. Each of these groups are of import-
ance to demand a detailed discussion.

Although the policy of Union-Management Co-operation
is not and has not been promoted for altruistic reasons,
its greatest accomplishment has been one of a decided be-
nefit to society.’ This has been the creation of a new
mental attitude on the part of both employers and employees.
The results which have accrued to society as a whole have
been accomplished through mutual effort rather than antagon-
ism, that is, through peaceful negotiations rather than
industrial war. Where every bit of ground is gained by the
exertion of force in the form of strikes, lockouts, and boy-

cotts,the cost of such are passed on to the consumers. The piano

1. U.S.Bureau of Labor Statistics, op.cit., p.155.

105

in general, through ignorance, has often taken an attitude
opposed to organized labor, one of the best methods for
reatifying such conditions.

Another great cost is passed on to society. Every
business failure means waste of human effort, materials tied
up in idle equipment, and loss of capital funds. Often such
losses are caused by misunderstanding and lack of confidence
between men and management.1 Co-operation tends to correct
this situation by promoting amiable feelings. Of course,
this demands several years of co-opsration, for the other
attitudes are deep seated and can only be overcome by a
demonstration of their fallacy.

The elimination of these unnecessary costs of industry
allow prices of goods and services to be lowered. In this
way society benefits directly. There are also indirect gains
to society which are not measurable in terms of money. The
savings in human life, the creation of better spiritual
attitudes of the workers and the<3arrying over of these
changed attitudes into social life can not be weighed in
monetary values, yet their social value is tremendous.

Management gains from the pursuance of.a co-Operative
policy by obtaining an organization which operates more
economically and which has a greater productive effective-
ness in proportion to the amount of effort expendedtz

Ebonomy exists through the conservation of material effort,

1. In. Green, 'Labor's Ideas Concerning management", Bulletin of the Taylor
Societ , Dec.. 1925, vol. 10, p. 243.

2. G. C. Brown, "UnionsMhnagsment Co-operation Committee", American Federa-
tionist, June, 1930, vol. 37, p. 675. See also 0. S. Beyer, Jr.. ”Three.
'Yeare of the B. and O. PlanP, New Republic, Aug. 4, 1926, vol. ‘7, p. 300.

106

lives, money, and spiritual values. These savings culminate
in the form of greater effectiveness of organization, which
permits greater profits. As stated elsewhere, this is the
real measure of value as far as management is concerned.

Economy and effectiveness are fostered in still another
way. A more amiable attitude on the part of labor toward
management encourages workers to take more care of materials;
to call fewer strikes; and to give unrestricted output.

Co-operative management also forces employers to cast
aside their lethargic attitude as organized labor acts as
a check upon all the'wasteful methods. Workers offer
suggestions for better methods of production and the correct-
ion of inefficiencies. In this way, many things of which
they would otherwise have been ignorant are called to the
attention of management.

Employees gain from the use of co-operation as they
are placed in a stronger bargaining position. That is,
management recognizes them as a collective group and defers
to their wishes more frequently than under any other system
of industrial relations. Organized labor thus gains in two
ways. They have succeeded in holding the rights obtained
before. co-operative management was adopted1 and they are in
a better position to demand fulfillment of other rights.
Furthermore, as co-Operation increases productivity, wages
become higher, and working conditions better.

The offering of rewards for suggestions from workers

has encouraged them to feel that they are no longer more

, l. B. M; Jewell, ”Recent Extensions of Collective Bargaining", Eggphlet,
American.Federation of Labor, 1925, p. 7.

107

machines. A new attitude of interest and pride in their
work is gradually being built up. They are given the
opportunity to share in the development of their jobs and
of themselves. As personal development progresses, social
status of the workers increases. This acts as compensation
for the additional effort which has been expended.

Finally, laborers gain from their affiliations with
the engineering profession. The usefulness of this profess-
ion eminates from the technical improvements which they can
point out to the unions and the unions in turn to management.
As mentioned before, any decrease in waste brought by im-
provements in the productive progress culminates in increasei
wages or better working conditions, or sometimesin both.

It should be emphasized before this chapter is closed,
that Union-Management Co-operation is not a panacea for
all industrial ills. This movement is, as yet, in its
experimental stages and too Optimistic conclusions should
not be drawn. Mistakes have been made in the past and will
be made in the future. However, the expectations of
Union-Management Co-operation are great for the change in
attitudes of the two groups concerned has demonstrated
that, so far, each is sincere and will not be discouraged
by reverses and setbacks. With such an outlook co-operat-
ion can not do otherwise than succeed as long as it is

pursued on sound and rationalistic grounds.

108

CHAPTER VI

‘UNION-MANAGEMENT CO‘OPERATION - SOME TYPE CASES

In the predading chapters we have designated the types
of organized workers' restrictions against the efficiency
movement, the reasons for such practices, and the new or
more recent view point and the forms in which it expounded
itself. The present chapter will show in what ways the
new attitude has worked and what its results have been.

It should be kept in mind that as yet this plan, Union-
Management Co-operation, has been confined to a few firms
in a relatively small number of industries. The most prom-
inent groups that have adopted Union-Management Co-operation
have been the railroad industry. As a result most of this
chapter will be devoted to a discussion and analysis of
this plan. It should be remembered that the cases depicted
here are yet in their experimental stages and that state-
ments made in connection with the policies, mechanism, or
rules follwed by the various co-operative plans can not be
taken as conclusive. There is much to learn from these
experiments before definite statements can be made or
before Union—Management Co-operation can be called a success
in industry.

The plans to be considered in this chapter will be

the Baltimore and Ohio plan of the railroad industry; the

109

Chicago clothing trade, Full Fashioned Hosiery trade, and
the Pequot Mills plans of the textile industry; the
Philadelphia Rapid Transit plan of the street railway ind-
ustry; and miscellaneous plans of other industries. As
mentioned before, emphasis will be placed upon the Baltimore
and Ohio plan since it has been in Operation longer than
any of the others.
Baltimore and Ohio Plan.
a. History. The first cognizance given co-operation by

any of the railroad unions is found in the preamble of
the constitution of the Brotherhood of Locomotive Engineers
organized in 1864. It says:

"The interests of the employer and the employ-

ee being coordinate, the aim of the organization

will be the codperation and cultivation of

amiable relations with the employer and to sub-

mit questions of differences to arbitration

when an agreement can not otherwise be reached

and to guarantee the fulfillment of every

contract made in the name and by the use of

every power vested in it....' 1
However, it took sixty years for this aim to be realized.

The next move toward co-operative management came dur-

ing the World War. It was to the Director General of the
railroads that the proposal for co-operative management
was made and it met with favorable consideration. However,
the War ended before definite plans could be formulated or
put into practice. Immediately after the War, difficult-
ies were encountered in replacing the railroads upon a

peace time basis. Therefore, there was no opportunity to

do anything with the co-operative prOposals.

«1. B. M. Jewell, "Union-Management Co-operation in the Railroad Industry"
Bulletin of the Taylor Society, Feb., 1926, Vol.11, p321.

110

With the return of the railroad management to private
hands, the deflation movement which followed was borne chief-
ly by the federated shOpcrafts. This culminated in the
strike of 1922 which further indicated the need and advanta—
ge of co-operative management between the unions and
management. The unions felt that if management would cease
to fight them and use their energy for elimination of waste
and increasing the efficiency of the tools and machinery of
the company, all difficulties which led to the waste and
inefficiency would be alleviated.

In the spring of 1923, a union spokesman appreached
the president of the Baltimore and Ohio Railroad with a
co-operative proposition. Its feasibility being evident,
the president of the railroad agreed to give it a trial in
one of the shops.

b. Formulation of plans. Because the Glennwood shops of
the Baltimore and Ohio had long been a most irritating spot
both from the point of view of management and labor, they
were selected for the experiment. The specific irritations
in this shop before co-operation was tried can be character-
ized in somewhat the following manner. For several years
lay-offs over long periods of time had caused hard feeling
between men and management. Agitators succeeded in making
conditions worse. Petty intrigues were prevalent, and
grievances were not settled satisfactorily. Little money
was Spent by management for repairing or purchasing tools

and equipment. In fact, every time slack work presented
itself on the railroad, the Glennwood shops were affected

111

first. Because of the high costs these shops were used
only as emergency repair shops. In addition to these con-
ditions, jurisdictional disputes were prevalent among the

\

1
workers and living conditions were anything but ideal.
luggestions from the workers were not highly regarded, and
voluntary action on the part of the labor force was not
encouraged}a Management had much of its repair work done,
especially on locomotives, outside its own shops. Thus,
Union-Management Co-Operation was started in a shop in
which labor and management were at great odds. In fact,
there was a total lack of harmony.

In the formulation of this co-Operative plan Mr. Daniel
Willard represented the management; Mr. William H. Johnson,
the workers; and Mr. O. S. Beyer, Jr. acted in the capacity
of technical expert and remained neutral in the negotiations.

c. The plan adopted. The object of the plan adopted by
the Baltimore and Ohio is well indicated in the preamble to
the agreement accepted and signed by both parties. It states
that,

"The welfare of the Baltimore and Ohio Railroad
and its employees is dependent on the service
which the railroad renders the public. Im-
provements in this service and economy in
Operation and maintenance eXpenses result
chiefly from willing oo-operation between the
railroad management and the voluntary organiz-
ations of the employees. When the groups
responsible for better service and greater
efficiency share fairly in the benefits which
follow their joint efforts, improvements in
the conduct of the railroads are greatly en-

couraged. The parties to the agreement
recognize the foregoing principles and agree

”1. Ibid., pp.5-7
2. L.A.WOod, op.cit., p.2

112
i
to be governed by them in their relations“.
Thus the chief object on the part of each party was to
promote better service to the public. This inoidently was
expected to increase the income of the railroad and each
party agreed to share equally in the benefits.

Management was particularly interested in gaining the
OO-operation of labor unions because 65 per cent of the gross
revenue was spent for labor costs}3 Anything which would
lead to the conservation of labor or to increasing its
efficiency would be an asset in lowering the expenses of
the railroad. That is, management was interested more in
making the human factor efficient than in introducing
machinery and mechanical improvements.3

The labor unions were primarily interested in the
continuity of employment? They had seen from experience
that opposition did not gain for them the fulfillment of
this desire. Therefore, if management could guarantee them
a maximum amount of employment, they were willing to aid
management in increasing their own efficiency.

To increase the regularity of employment the Baltimore
and Ohio plan proposed to modernize and rebuild certain
types of locomotives in their own shops. In this way it
was felt that any unemployment which might result from the
increased efficiency of the shopmen would be supplemented

5
by this kind of work in slack times.‘

1. Quoted by 0.8. Beyer,Jr., "B. and 0. Engine #1005", Survey, Jan.,l,
1924, Vol. 58, p.315.

2. B.M.Jewell, "Recent Extension of Collective Bargaining", Pamphlet,
A.F. of L., 1925, p.5.

3. D.J.Saposs, "Realism in Labor Strategy", American Labor Menthhy,

Oct., 1924, p.25.

4. H.W.Thornton, "Union—Menagement Co-operation in the Railroad Industry"
Bulletin of the Taylor Society, Feb., 1926, Vol.11, p.13.

 

113

Additional steps taken to stabilize employment were the
systematic and scientific forecasting of revenues, the
systematic and scientific budgeting of expenses, establish-
ment Of a clearing house for furloughed employees, mileage
and hours were made flexible for each pay period, extra-
boards were created to hire extra men, and special conferences
between management and union representatives whenever it
became necessary to curtail expenses to the extent Of affect-
ing employment were heldE- By such a procedure the unions
assured their members that any Of the fears arising from
increased efficiency would not become a reality.

Similarly the workers were protected in regard to the
legitimate rewards which they considered themselves entitled
to for any increase in their efficiency.» In other words, by
means of co-Operation and agreement, the workers were guar—
anteed a fair share in the increased returns arising from
their increased efforts.

The extent of Union—Management Co-Operation in the
railroad industry is widespread. In 1927 there were 64,000
men and one sixth the total mileage of the railroads in
the United States and Canada operated under co-operative
schemes.3 Four large railroads — Baltimore and Ohio,
Chesapeake and Ohio, Canadian National, and the Chicago and

4
Northwestern - now have co-Operative plans affecting seven

unions - International Brotherhood of Boilermakers, Iron

1. O.S.Beyer, Jr., "Union-management Co-operation in the Railroad Industry",
Bulletin of the Taylor Society, Feb., 1926, Vol.11, p. 15.

2. Ibid, p.22.

3. O.S.Beyer, Jr., "Management and Labor Co-0perate on the Railroad",
Industrial Management, may, 1927, Vol.73, p. 264.

4. O. S. Beyer, Jr., "Three Years of the Baltimore and Ohio Plan",

New Republic, Aug. 4, 1926, Vol.47, pp.298-300.

 

114

Ship Builders and Helpers of America, International Brother-
hood Of Machinists, International Association of Sheetmetal
Workers, International Brotherhood Of Electrical Workers,
International Brotherhood Of Stationery Firemen and Oilers,
and the Brotherhood of Railway Carmen of America}1 Such
rapid progress since 1922 shows how the co-operativs move-

' ment has spread and indicates the widespread influence of
the new attitude of organized labor. Whether this plan will
become the accepted and become the common form of railroad
industrial relations or not remains to be seen.

The basis upon which this plan was formulated consisted
of seven principles. (1) Full and cordial recognition was
given standard unions as the properly accredited agents to
represent the employees of the railroad unions. (2) Manage-
ment accepted these standard unions as helpful, constructive,
and necessary in conducting the railroad industry. (3) Wages,
working conditions, and the prompt and orderly settlement of
all grievances were to be governed by an agreement between
the men and the management. (4) Co-Operation was to be
carried out for the bettering Of the service and the elimin-
ation Of waste. (5) Employment was to be stabilized. (6)
The gains of co-operation were to be measured and shared
fairly between men and management. (7) Joint Union-Manage—
ment administrative machinery was to be perfected as quickly
as possible?

Each of these principles were concessions on the part
1. B. M. Jewell, op. cit., p. 1.

2. O.S.Beyer, Ir., "Union-Management Co-operation in the Rail‘oed Industry”,
Bulletin Of the Taylor Society, Feb., 1926, vol. 11, p. '7. V

115

of both parties. However, management conceded more in prot-
ecting the unions from evil consequences which might arise
from the increased efficiency. Previously the only way the
unions had of maintaining the ground gained, or to secure
new concessions from management, was by force and threat of
strike. With the adoption of the principles of this new
plan, the old policies were no longer necessary.

Although the concessions granted in this plan seemed to
be entirely on the part of management, the unions conceded
their restrictive policies and promised to aid management.
in the elimination of waste and other inefficient practices.
This in reality was the forfeiting of traditional methods
by which the unions could protect themselves and their
members, thus the real or fundamental basis Of Union-Manage—
ment Oo-Operation was confidence.

The machinery set up to administer this plan consists
Of local, regional, and system conferences between the duly
accredited representatives of management and the Unions.1
Each side appointed its own representatives. The local con-
ferences were held every two weeks and system conferences
every three months.

The authority of these committee was not sufficient
to allow them to make decisions. This authority still
rested in the hands of the management as it assumed the
responsibility for the operation of the railroad? However,

local and regional committees were allowed to appeal cases
t.1.. In the case of the unions their representatives are the officale of

the Railway Employes' Department of the American Federation of Labor.
2. B. M; Jewell, op. cit., pp. 6-7.

118

to the next higher committee. A better understanding of
the duties of each of these committees is gained if the
subjects which they discussed are examined.

Local conferences considered job analysis and standard-
ization, methods of improving tools and equipment, proper
storage, cars and delivery of materials, economical use of
supplies and materials, proper balance of forces and work
in the shop, co-ordination and scheduling of work in the
shop, training apprentices, recruiting new employees, im-
proving the quality of the work, conditions of the shop and
grounds, securing new business for the railroad, securing
new work for the shops, measuring output, and stabilizing
employment.1 In each of these cases it can be seen that the
subjects discussed were purely of a local nature and interest.

Regional conferences were limited to similar subjects
of discussion. In these, the subjects were either of a
regional nature or were review causes of the local confer-
ences. The emphasis here was laid on the co—operation
between the various departments under the jurisdiction of
the regional representatives.

The system conferences were primarily interested in
the co-operation of the various groups of the entire rail-
road.2 They also took up with the management the grievan-
ces of a broader and more inclusive type such as wages,

l. 0. S. Beyer. Jr., op. cit., pp. 11-12.

8. The railroad unions also carried on an educational program for the trains
in; of committeemen, system.representetives, and union Officsls in the civics,
history, and economics of the railroad industry. This insured that the con-
fsrsnces, so far as the union representatives were concerned, would be cer-

risd on in s business-like fashion. Ignorance of the subjects and problems
'nndsr consideration was not present. (see B. M. Jewell, op. cit., p. 25).

117

hours, general working conditions, and the like. It was
also this group that signed any agreement and enforced its
provisions.

d. Results of union-management co-operation on the rail;
393$, Before closing the discussion of co-operation on the
Baltimore and Ohio Railroad it would be well to sum up its
results in the Glennwood shops and the results to the unions
and management in general.

It will be remembered that the introduction of co-
operation into the Glennwood shops was merely a test of the
principles of this scheme. Until the Glennwood experiment
was put into Operation, co-operation was only an idea whose
practicality was unknown. After its trial there, the basis
of co-operation, as spoken of previously, was further
developed and held to be fundamental. In other words, it
was found in this trial that for Union-Management Co-Operat-
ion to be successful, unions must be given full recognition;
must be considered necessary and useful; better service,
elimination of waste, and stabilization of employment must
be its purpose; both parties must share fairly in the
gains; and adequate co-operative machinery must be develop-
’ed.1 Thus the basis of co-operation in industry was
developed from actual experience rathex~than from theoretic-
al sources.

The committees to the System Federated Conventions of
the Baltimore and Ohio and Canadian National Railroads

testified:
' 1. 3. M. Jewell, Op. cit., p. 4.

118

"That co-Operation had resulted in a decided
improvement in the relationship between
management and men, thus strengthening the
morale of the service; that substantial
improvement in the tools and working con-
ditions had been affected, enabling increased
output Of better quality; that considerable
progress has been made in stabilizing em-
ployment and so increasing wage income; that
satisfactory progress had been made in dev-
eloping a sound understanding of the
co-operative idea among employees and officers;
and, that the causes ordinarily making for
grievances had been greatly reduced while
the settlement of grievances which did arise
had been greatly expedited"}'

In addition to these the Machinists' Union at its National
convention held in Atlanta in 1928, said that co-operation
had given them time and a half for Sunday and holiday work,
vacations with pay, and had increased their wage income.3

The two most important features which organized labor
has been interested in were increased employment and wages.
On the Baltimore and Ohio about one month's extra werk
was given to the entire force through the repairing of their
own rolling stock.3

Management gained by the reduction Of friction between
it and the unions. This allowed it to utilize the efforts
formerly used in opposing the unions in a more constructive
manner. The reserves formerly applied in opposition are
now used to promote efficiency in management. Management
also gained materially in the increasing of efficiency of
the industrial organization through suggestions offered it

by the workers. These were of a distinct benefit for

under policies other than co-operation, suggestions were

1. O. S. Beyer, Jr., ”Three Years of the Baltimore and Ohio PlanP, Egg
Be ublic, Aug. 4, 1926, vol. 47, p. 298.

2. Wertheim.Lectures on Industrial Relationg, op. cit., p. 6.

5. B. M; Jewell, op. cit., p. 6.

119

not allowed or recognized. The employer had no way of know-
ing or discovering these improvements as he had no direct
contact with the work. Finally, management has benefited
because allihe purposes for which co-Operation has been
created have been, and still are being realized. That is,
the efficiency of the road has been increased. New business
has been secured by employees and the repair of their own
rolling stock in their shOps has lowered the cost of such
work.

In general it may be said that the presence of another
group, intimately acquainted with the problem and work,
has stimulated management to look after its own efficiency.
No longer is management able to increase its own profits
through the lowering of wages. This has forced it to look
to the real sources of waste and inefficiency. The em—
ployees, through their suggestive power, always stand ready
to prod management, and to watch its methods of work as
well as those of the employees}

Therefore, it can be said, with respect to Union-Manage-
ment Co-Operation of the Baltimore and Ohio Railroad, that
co-Operation has proved successful as it has stabilized
employment, increased efficiency, lessened the causes for
disputes, prevented waste, prevented inefficient and un-
economical practices, and has stabilized production in the

2

shOps. It has also improved the morale of the workers,

1. For further information on the gains from efficiency from.the labor point
of view as well as from.management point of view, see 0. S. Beyer, Jr.,

”The machinery of Co-operation”, American Federationist, NOv., 1929, vol,
36s PP. 1316-70

2. O. S. Beyer, Jr., ”Management and Labor Co-operate on the Railroad”,
Industrial management, may, 1927, vol. 75, pp. 269-70.

120

service, and the quality of the work}' all of these factors
are reflected in the financial statement of the railroad.

So far, co-operative management on the Baltimore and Ohio
Railroad can be termed a successful venture.

Canadian National~glan.

In the case of the Canadian National Railroad, certain
conditions existed in the system which were unfavorable to
the ready development of Union-Management Co-operation.
These were: (1) lack of system and deepatch in the settle-
ment of grievances, (2) lack of a definite conception as
to the status and functions of the unions concerned, (3)
inadequate union representation on some sections of the
railroad, (4) dissatisfaction in some of the shops in which
the bonus system of wage payment was used, and (5) the
irregularity of employment .2 With the exception of the
third, these problems were~not materially different from
those of the Baltimore and Ohio in the Glennwood shops.’

A compensating feature to these conditions did exist in
the case Of the Canadian National, for it could profit by
the experience of the Baltimore and Ohio.

However, in the case of inadequate union representat-
ion, the Canadian National was faced with an entirely new
problem. The question of union organization had until
recently been one of a controversial nature between men and
management. The employer had always been in a strategic
position to aid or hinder, if not actually prohibit, the
l. , ”Result of Co-operation of Workers and Management on the
leilroads", Monthly Labor Reviel, July,1927, vol. 25, p. 30.

2. Wertheifl Lectures on Industrial Relations, op. cit., p. 8.
I. For this reason no discussion Of these will be given here. See pp. 111-2.

121

workers from organizing}1 That is, through his power to hire
and fire, he could discourage unionization, but, if favorable
to the unions he could do a great deal in aiding them.

Before co-Operation could become an accepted practice on the
Canadian National, it was necessary for sufficient organizat-
ion to take place that the employees would be properly re-
presented. However, this was not a difficult thing to do
and did not retard the plane to any great extent.

The object of co-operation on the Canadian National
was to develop better relationship between the railway and
the employees; to improve output and thereby reduce unit
costs; to provide for the utilization of the brains and
ingenuity of the men in the shop; to insure continuity
of employment; and, to promote a more accurate conception
on the part of management and men of the other‘s point of
view?’

The plan adopted and the machinery set up for its
administration was the same as that for the Baltimore and
Ohio. In fact, it was closely patterned after their plan.
Furthermore, its results and achievements are closely
allied to those of the Baltimore and Ohio.

Cezgperation in the Textile Industry.

a. ghggago Clothing trade. While the Chicago clothing
trade has had collective bargaining since 1910, co-operative
management was not adopted until after 1920. In 1910, a
1. By refusing to hire union.men or to allow any worker to remain in the
employment of the anti-union employer, workers could not continue to be
employed unless they were willing to give up their present Job. The
importance or dependence Of workers upon their Jobs has previously been
discussed. When this fact is duly considered, the strategic position.of

management in.prohibiting workers from organizing can be seen.
2. Henry Thornton, "The New Partner - the New Labor Era", American Federa-

tioniat, Oct" 1929. ”Is 36, p. 1308.

122

strike covering almost all the workers and employers of the
market resulted in the formation of a new clothing workere'
union - The Amalgamated Clothing Workers' of America. This
union has become the official agent of the workers in all
negotiations with management.

The co-operative plan.under operation at the present
time has been developed from early collective agreements.
The first agreement1 covered only the settlement of griev-
ances by arbitration. In later years it has grown to
include all relationships between the workers and management
In principle the co-operative plan includes the joint deter-
minationcf time-and-motion studies, joint determination of
the piece rates, and all phases of the workers' relationships
with machinery. Furthermore, the customs in work are like-
wise duly considered and protected.

The machinery of administration consists of a Joint
Board, elected by the thirteen local unions of Chicago, and
an impartial chairman appointed by both workers and employ-
ers. All grievances and interpretations of the existing
agreement are passed upon by the general chairman. In
contrast to the oo-operative plans found in the railroad
industry, final decisions of all employer-employee relation-
ships lies in the hands 01 this one individual.

The difference between these two industries in respect
to authority can be explained in the dissimilarity of the

organization of the industries. The clothing industry

1. JOint Board Of Amalgamated Clothing Workers of Chicago, The Clothing
Workers of Chicago, pp. 1—120.

123

is composed of a large number Of employers some employing a
few workers and others a large number. In the railroad
industry a very few employers employ all the workers in the
industry. For this reason authority has been placed in the
hands Of an impartial chairman in the clothing trade while
the railroads continue to place authority in the hands of
management.

Another reason is also present for the differences
found in the administration of these two industries. The
railroad workers have been organized for a much longer time
than the clothing workers and are, therefore, in a better
position to protect themselves. That is, a greater unity
exists between them as they are definitely of their power.

The clothing workers seek to proteCt hours, wages,
security of job, individual freedom, their organization,
health, and working conditions. By taking part in the
determination of the piece rate, wages are protected as
well as the health of the workers. By jointly determining
time-and-motion studies the workers are able to protect
security of their job, health, and.working conditions.
Grievances as to the working conditions can be settled
through complaints registered with the impartial chairman.
Furthermore, the organization is protected by an agreement
that union workers will be given a preference over non-
union workers although the employers are not prohibited from
using non-union workmen when unionzren are not available.

The unions protect the workers :from the displacement

of men by labor-saving machinery. This is done by the

124

provision in their agreement that no change in the technique
or improvement in the process can take place to the dis-
advantage of the workers.1 If change in technique or _
process is desired and takes place, the displaced workers
are either transferred to another department with approx-
imately the same pay or are placed in another company in the
same type of work. Thus, normal expansion of business
remains about the only outlet for a change in technique or
process.

The unions are thoroughly informed on the technique
of shop management. This was illustrated with the failure
Of the David Adler and Sons Clothing Company of Milwaukee.
The union in order to provide employment for its striking
members entered into the manufacture of men's clothing.
They made a contract with Hart,Schaffner, and Marx Company
of Chicago. Although this measure was adopted only as a
temporary expedient, it became so profitable and worked so
well that the experiment has been continued. Thus, the
union is well versed in the technique and problems of
management. This has been an aid in negotiating with man-
agement.

Definite co-operation between unions and management
was begun in 1925. At this time it became necessary for
Hart, Schaffner, and Marx Company to change the styles of
their garments. Formerly they manufactured medium and high
priced suits which demanded high grade workmanship. Just

previously to 1925 the demand changed in favor of a lower

1. we. Haber, "Workers' Rights and the Introduction of machinery in
the men's Clothing Industry", Journal of Political Economy, Aug., 1925,
Vol. 55, p.398.

125

priced suit. If they were to remain in business it was
necessary for them to change their styles and put out a
cheaper garment. But as they Operated under an agreement
with the workers, it was not possible to make the required
changes without the sanction of the union.1

With the aid of careful research by both management
and the unions, it was agreed to try the production of a
cheaper garment under an entirely new plan. This new plan
was known as the "X Plan“ and was carried out in a separate
shop. In.the new venture the company recognized the union
as a co-operative agent in production by allowing it many
controls which had heretofore been retained by management.
The unions were now given all the authority over discipline,
establishment and maintenance of standard of work, and were
allowed to help design the new garment. Furthermore, the
unions were allowed to plan the layout of the new shop and,
although the labor costs were jointly determined, the unions
were given the right to determine the distribution of this
to the workers.2

In return for these new responsibilites the unions
gave up many prevailing cuetomséin.order that efficiency
might be increased and piece rates lowered, although the
hope was that,due to the increased efficiency, weekly earn-

ings would remain the same. The reason for this attitude is

found in the words of Mr. T. Holland:

1. The cheaper suits would necessitate a lowering of labor costs. This
//in turn meant a_lowering of the wage scale which could not take place

without the sanction of the unions.

2. T.Holland, "The X Plan in the Clothing Industry", New Republic,

Aug. 7,1929, Vol.59, p.307.

3. The impartial chairman has always upheld the unions' use of these

Customs as being the powers of the union and thereby a right which

justified protection. (See T.Holland, op.cit., p.307)

186

"Under the X plan, the union won, at a single
stroke, much of the control that had been

its aim in building up this network of customs,
and since they were no longer necessary as a
war measure against management, they were
eliminated in the new shop".l

One way in which the efficiency of the new shop was
improved was that the layout of the work was taken over by
the clerical force. This allowed the discharge of 150
cutters. Each of these received a dismissal sum of $500.2
which was to tide them over until new employment was found.
This was acceptable to all concerned and brought very
satisfactory results?

Although the Rochester and New York clothing markets
are organized on a basis similar to that of the Chicago
market, they have not adopted Union-Management Co-operation
in its true form. The basis of union and management
relations in these two markets is collective bargaining.

' Many advantages have been gained both for the employers

and the workers, but the large benefits which rise from
co-Operation have not been reached. The scope of the
Rochester plan is as inclusive as that of the Chicago plan.
waever, while more men are affected in the New York

market , than either in Chicago or Rochester, the market

is not as completely organized.

b. gall-Fashioned Hosiery trade. Although a formal co-
Operative plan does not exist in the Full—Fashioned Hosiery
trade, the relations between the unions and the plants have
1. T. Holland, loc. cit.

2. Ibid., p.508

3. This sum was created by management contributing two-thirds and the
union one-third. (See T.Holland, loc.cit.)

127

encouraged co-operation. The basis of this union is of a
militant nature. Gustave Geiges, the president of the
American Federation of FulloFashioned Hosiery Workers'Union,
stated that, "management will become more efficient when-
ever labor is militant, educated, progressive and shows a
willingness to co—operate with management in operating
labor-saving services"3' Such a policy has been adopted by
this union and an extensive educational program for the
promotion of more efficient work by its members has been
carried on.

The union has attempted to teach its members the prOper
use of materials and a sense of responsibility toward
industry. This educational program has included the new
union attitude toward machinery as well as efficiency.
Gustave Geiges also stated that, 'in our industry we feel
that the'willingness of our organization to try out new
machinery and methods at all times, has, in the long run,
added to our earning power and has probably done even more
to add to the employers' earning power."2 This new attitude
is also reflected in the policy toward hours. The union
leaders feel that the workers can work at a high speed with
the minimum number of mistakes for only so many hours:5
Any additional time required of them is done at the expense
of efficiency; that is, more mistakes will occur which
leads to a greater percentage of inferior work.

Furthermore, the union has carried on an intensive

l. G.Geiges, "The Full-Fashioned Hosiery Industry", American Federationist,
June, 1927, Vol.34, p.671.

2. Ibid.

3. Ibid., p.672.

 

128

study of the market to see the possibilites of glutting it
and to gain more reliable information as to the true con-
dition of the industry. They realize only too well the
influences of such conditions. The union is also trying to
educate the employees to the evils resulting from overpro-
duction. Overproduction is trying to be overcome by the
use of the workers as an aid in securing new business from
firms using the open-shop policy. Similarly, the union is
trying to educate the workers to adapt themselves to changes
in styles. That is, such changes influence the workers as
different methods of work are required when styles are
changed.1
c. Pequot Mills Plan. In the Naumkeag Cotton Mills of
Salem, Massachuetts, a co-Operative plan has been adopted
by management and the union. The object of this agreement
was to remove "as far as possible, all causes for misunder-
standing and friction and (to promote) to the greatest
possible degree the mutual helpfulness of the two organ-
ixations".2 This consisted of the recognition of the union,
a minimum wage for women workers, provisions for collective
bargaining, collection of union dues in the mills, and a
shop committee and foremen conferences to adjust grievances.3
The expression of the union point of view, of its aims,
and the success the plan has had is well put in the words

of J.P.O'Connell, the Union Business Manager in Salem.

1. J.P.O'Connell, ”The Naumkeag Experiment - the Union Point of View",
Bwlletin of the Taylor Society, Apr.1930, Vol. 15, p.67

2. Ibid.,pp.675-4.

3. Ibid., p.67.

129

Co-operation, he says,

"means participation in the subject of
wages, hours of labor, shop conditions,
shop discipline, engagement, transfer,
and discharge of employees, application
of shop rules and working conditions,
supply of work, introduction of new
machinery, improvement in the industrial
processes, organization of industrial
research with industrial experiments and
scientific management. Union-Management
Co-operation, with its participation plan,
differs from company unionism, or sham
Industrial Democracy plans inasmuch as
it acknowledges that the workers are allowed
and should have a share in the control of
all those conditions and processes which
affect them directly or appreciably and
about which they possess some helpful
knowledge.

No one group in industry has a monopoly
of all the brains, if industry can see
eye to eye with the plans of the trade
union participation movement as I have
outlined, there can be harnessed for re-
lease a tremendous latent power! 1

From this statement can be seen the similarity between it
and the object, aim, and results of other co-operative
plans which we have discussed. The administrative machin-
ery in this plan is very much like that adopted by the
Baltimore and Ohio. We are beginning to see that the
machinery of administration of the industry depends a
great deal upon the particular organization of the industry
or firm concerned although the purpose and results of all
co-operative plans are in most cases identical. This
should be kept in mind from now on.

Due to competition from unfair employers, the Pequot
Mills were placed at a competitive disadvantage with the

more selfish textile employers. When the unions failed to

"1. J.P.O'Connell, "Address on Union-Management Co-operation in the Pequot
Mills", The Textile Worker, pp. 21-2.

130

organize the latter's workers, an appeal was made to the
American Federation of Labor to induce its members to buy
the products of the Pequot Mills in preference to other
goods.1 This method has become a very common practice for
unions that appreciate the dangers arising from the pur-
suance of a policy of strike or boycott.

Competition became so great in this industry that it
was necessary to reduce the wages of the employees. The
merits of co-operation became evident at this time and
warrant mention. An appeal was made to the workers and they
voluntarily sanctioned a reduction of their wages? This
fact is quite remarkable and speaks well of the co-operat-
ive movement; especially when one realizes the sacrifices
the workers made.

The Philadelphia Rapid Transit Flag.

The Philadelphia Rapid Transit Company began collect-
ive bargaining with its employees in 1911. AS the Mitten
management spread to other cities, the same form of indust-
rial dealings was carried with it. In 1929 the Mitten
management signed an agreement with the unions whereby union
sanction was given to this particular form of co-operation.
It was further agreed that all unionists who came under the

Mitten management in the future would accept collective

1. Ibid., p.16.

2. In this case, 2,000 workers voted two ten per cent reductions in wages
within six months. (Ibid., p.161). Another case of this is cited in the
case of the Convention of the Full-Fashioned Hosiery workers which urged
their members to accept reductions even in the face of threatened stability
of the organization. This is further evidenced in the official organ of
the Textile workers when it states that "this action of a large division

of our membership bears out our statement made many times, to theeffect
that workers, through organization, can do more to accede to facts, when
they are placed before them fairly and squarely, and to reductions in

their wage scales, when the conditions of the industry warrant such action".
I "Rnw‘onti fin Unnnaewen‘t in Don innation Wi th the Trade Union Move-

131

bargaining in this form. This agreement was known as the
Mitten-Mahon agreement.

The Mitten form of collective dealings with its em-
ployees consisted of many paternalistic policies which are
of such a nature that their soundness and possibility of
long run success is doubted. D. D. Kennedy is of the opinion
that the success of the Philadelphia Rapid Transit plan was
too dependent upon the personality of Mr. T. E. Mitten;
that the plan was too paternalistic; that little arbit-
rary control was present; that the workers had little control
over things other than those pertaining directly to them;
and, that the attitude of the men was contrary to the
success of the plan as three distinct groups were present
in the organization. One group favored the plan, a
second opposed it, and a third.was not at all interested
in collective bargaining} Such a situation was not con-
ducive to the co-operative spirit and idea of the previously
cited plans.

In the case of the Philadelphia Rapid Transit Company
we find a plan formulated on other than a trade union basis.
While those plans which are founded on co-operation between
management and a union have been a success, this one has
many defects. It would seem that such a situation tends
to lead toward the decision that co-operation on any other
basis than between managements and unions is not as desirable
as it should be.

1. D.D.Kennedy, "The Philadelphia Rapid Transit Plan", Industrial
Management, Dec., 1924, Vol.68, pp.371-2

 

 

132

ngirIndustry_.

Union~Management Co-operation in the coal industry was
tried in the Rocky Mountain Coal Company of Colorado.’ A
co—Operative plan was set up to allow for a more favorable
competitive position with local companies. It was found
through co-operation that the productive efficiency of the
workers was increased and industrial peace assured.2 Co-
operation has not been applied to this industry to any
great extent, but a very fertile field for such plans is
evident.

Printing Industry.

 

No plans have been instigated in the printing industry
between union and management; co-operation has taken a
different form. The International Printing Pressman and
Assistants' Union has established a department which reads
the daily editions of a great number of newspapers and
offers suggestions to their managements. If so desired by
any management the union will send a technican to examine
the plant and point out where its efficiency can be improv-
ed.3 The cost of such a service is borne entirely by the
union which feels that it is repaid by thus making possible
the payment of higher wages to the pressmen and their
assistants. The success of this service is evidenced by
the many letters of appreciation received from foremen and
publishers.4
1. This company is organized under a Wyoming charter but does business
in Colorado. See Mbody's Financial Reports.

2. , "Union-Management Co-operation in Coal", American Federationist,
Sept., 1929, Vol.36, p.1046.

5.'U.B.Department of Labor, "Beneficial Activities of American Trade Unions",
Bureau of Labor Statistics, Bulletin #465, p.161 (1928)

4. Far other miscellaneous plans see‘U.S.Departnent of Labor, op.cit.
pp.162-76.

 

 

 

133

Co-operation in European Countries.

Co-operation in England during recent years has been
stimulated by the success which was seen in the United
States. The severe distress of English industry has also
been favorable to this movement as management is willing
to do almost anything which will relieve itf- This move-
ment has taken the form of 'works councils' which are
similar to our shop committees. In 1927 there were 47
such councils covering 3,000,000 workers.8 Their periods
of meeting were irregular; the subjects which they con-
sidered were fact finding, welfare, seeking better
legislation, standardization of wages, hours, institution
of vacation schemes, andthe.improvement of factory condit-

3
ions.

Co-operation has been carried farther in the railroad
industry in England. A committee, known as the Whitely
Committee, was appointed to look into the industrial
relations of the English railways and make recommendations
for the promotion of bettering the situation. This commit-
tee "urged that a national council be established for the
whole of an industry, a district council for each of its
territorial divisions, andfwdrks committee for each of its
individual plants".4 Furthermore, management and men were

to have equal representation on all matters of common

industrial interest and all such matters were to come up

 

l. , "UnionAManagement Co-operation in England", New Republic,
Jan.4,1928, Vol.53, p.161.
2. B.M.Selkman, "Recent Trends in Industrial Relations In Great Britain",
Bulletin of the Taylor Society, Oct., 1928, Vol.15, p.180.

5. , "Union-Management Co-operation in England", loc.cit.

4. L.A.Wbod, op.cit., p.2.

\

134

before this committee. The plan was to be operative only
where trade unions existed.

The London, Midland, and Scottish Railway Company, the
largest in England, adopted a form of co-operation proposed
by its General Manager, Sir Josiah Stamp. Its conferences
were devoted to the efficient handling of transportation
services and economies in maintenance of buildings, road-
ways, and repair of cars and locomotives. Little, if any,
time was devoted to the discussion of grievances. So it
can be seen that the English co-operative schemes differ
to quite an extent from American and Canadian plans.
However, rewards for suggestions of merit were given.

So far the success of co’operation in England has
been somewhat limited as labor will not co-operate unless
given a share in management and English manufacturers are
unwilling to concede this. In spite of a great mutual
distrust between management and labor the co-operative
movement is beginning to receive some recognition. The
movement is also retarded to a great extent by unions whidi
are fully organized and therefore very powerful. Then,
too, the democratic spirit and idea is not ingrained into
the minds of the British workers as it is in the minds of
the American and Canadian workers. It has, however, great
possibilities if placed on a sounder foundation, for British
labor is fully organized and therefore Union-Management Co-

/
operation can have a more widespread influence.

1. Ibid., p.294,50
2. Ibid., p. 181.

135

‘Works councils' in Germany have become compulsory,
providing the workers demand it, for all establishments
employing twenty men or more?"This has been a part of the
great social legislative program which has been developing
in Germany for years. The rationalization of industry,
which has been instigated since the World War, has been
instrumental in placing both management and workers in a
frame of mind conducive to co—operation.

In general, the workers in European countries have
turned to politics in order to find an adequate outlet
for self-expression. This has promoted a feeling of sus-
picion and mistrust between employers and employees. As
long as this situation exists a favorable attitude toward
co-operation will slowly develop.

In concluding it can be said that the co-operative
movement is predominantly American. Although not present
in American industry to any great extent, it is rapidly
gaining ground. Furthermore, such experiments as have been
tried indicate co-operation as a successful method of promot-
ing industrial peace and increasing the efficiency of
industry as a whole. Again, one should not ignore the
fact that the relative newness of this movement will not
warrant dogmatic statements as to its probable success and
desirability; it does indicate that a better approach to the
problem of industrial relations and.the efficiency movement

is being presented to industry and trade unionism.

1. M.L.Cooke, "Some Observations on Workers Orcanizations", Bulletin
of the Taylor Sociejy, Feb., 1929, Vol.14, p.9.

136

CHAPTER VII
AN EVALUATION

The preceeding chapters have shown the development of
the efficiency movement in the United States, and have in-
dicated why it has been largely confined to this country.
The objections of organized labor to the methods, devices,
instruments, and programs of the efficiency movement have
been discussed and analyzed. From this analysis the
reasons for the workers disapproval of efficiency schemes
have been noted. Chapter five indicated the new point of
view of the unionists as well as the forms which this new
attitude has taken. Finally, the co-operative management
programs and other forms of Union—Management Co—operation
were discussed at some length. These chapters have also
raised the question as to the kind of a program which is
necessary to win the goodwill of labor. Chapter seven
seeks specifically to answer that question.

The interest of society in the efficiency movement is
to search for a higher standard of living. It is also in-
lterested in obtaining industrial peace. This interest is
not fanciful. It is vital. Therefore, anything which
interferes with the progress of the efficiency movement
tends to raise the prices which consumers pay for goods

137

and lowers the social standard of living. It is for this
reason that the attitude of labor toward the efficiency
movement is of vital social importance. Furthermore, society
has the right to demand that industry subserve its intent.
After all, the only reason why industry exists is to satisfy
the demands of the public. Therefore, this chapter attempts
to throw light upon the question of how the wishes, or
desires of society, may be satisfied. That is,to determine
what can be done to achieve a workable arrangement between
employers and employees. ,

Three things are essential in obtaining the goodwill of
labor. First, it must be ascertained what labor wants,
second, what labor can do to secure these wants, and third,
what industry can give toward the satisfaction of the de-
sires of the workers. Above all else, labor wants security -
security of employment, restriction of admission to trades
and old age pensions, and protection of skill. Next, comes
freedom or an industrial democracy similar to political
democracy, safety of bargaining position, and maintenance
of status. The workers also desire a voice in the deter-
mination of industry; especially in relation to working
conditions, rate of pay, division of the profits accruing
from their increased efforts, and machinery for conciliat-
ion, arbitration, and settlement of grievances. Finally,
unionists want individual as well as union recognition,
complete organization of all workers, and the expulsion

of all paternalism.

To obtain these labor must be willing to undergo a

138

radical change of thought and must surrender many of its
traditional attitudes. It must modernize its own organizat-
ional structure and gain an elasticity of policy which will
facilitate a better adaption to changes in methods of work.
Finally, workers must obtain all the facts connected with
industry and armed with such facts, seek full participation
in management as well as being willing to accept the res-
ponsibilities wnich may accompany it.

Industry must recognize the right of labor to participate
in management and provide for the joint determination of the
task, pay, and distribution of such gains as may arise from
mutual management.p Industry must also give the workers the
privilege of organizing and must develop co-operation between
itself and the workers. In addition to these, industry must
undergo a change of thought the same as labor. Management
must realize the presence of mutual interests in industry
and must change its motive for production from one of
profit to production for use. And finally, industry must
adopt social planning and control in order to stabilize
employment and standardize wages, hours of work, and working

conditions. It must also accede to social legislation which
will provide for unemployment, old age pensions, and sick-
ness. If properly administered none of these will injure
industry other than to prohibit exploitation and the pos-
sibility of enormous andaunwarranted profits at the expense
of the workers and the public.

Likelihood of Success of the New Attitude of Labor.

:1— —"-— 1

The likelihood of the success of labor's new attitude

139

is great. As has been mentioned several times, the sus-
picious and distrustful attitude which management and labor
entertained toward one another has been the greatest

obstacle in the growth of the efficiency movement. If co-
operation can bring an understanding between these two
factors of production sufficient to allow co-operative ex-
perimentation to be tried, and if the experiment is conducted
in a whole hearted manner, labor's new attitude will prevail.

The success of the new attitude can be encouraged in
several ways. First, management can aid in the success
by allowing the workers to have a voice in the determination
of the labor policy and by placing greater responsibility
for production upon the workers. Second, the acceptance
of suggestions of the workers can be of great aid to manage-
ment in increasing efficiency. Third, and above all else,
industry can accord fair treatment to the workers and quit
pursuing a policy of making large profits regardless of the
costs to the workers or ta the public.

Furthermore, the public can do a great deal to encourage
the success of this new attitude. In the first place, con-
sumers, through public opinion, can patronize these products
which are made under conditions favorable to the health and
welfare of the workers. By this is meant that consumers
could buy much less of the goods produced from the parasitic
industry, that is, those industries which do not pay their
workers subsistence wages. It would be rather far fetched

to expeCt that these industries can ever be entirely abolished.

The only hope, or reasonable expectation is to reduce them

140

to a minimum.

Finally, the success of this new attitude can be en-
couraged by the adoption of legislation which will seek to
penalize those concerns that persist in contrary policies.
It is only a minor number of the employers who place their
selfish desires before the social welfare of the country,
For these few, some form of compulsion or penalty, or both,
must be devised. As long as this minority persists in
policies contrary to the social welfare of the country, the
majority of employers must follow similar policies if they
wish to remain in business. For example, suppose an em-
ployer wished to stabilize employment for his employees or
to assume the risk and financial burden of those men he
could not profitably employ during slack work, and sought
to do this by continuing part of their pay for the un-
employed period. This employer would seek to so regulate
his production that the market would never become glutted.
If he were the only one in this par ticular industry, he
might succeed. If he tried to follow such a policy under
present circumstances other employers would continue to
glut the market and some of his employees would be continual-
ly unemployed. Therefore, he could not afford to continue
to carry even a part of the burden of unemployment of his
employees. As long as the selfish group of employers
continue to over-produce, social welfare can not become
the primary aim of industry.

It can be seen from the last chapter that certain

conditions may be brought about which do encourage the

141

success of labor's new attitude. We saw that in the rail-
road industry, co-operative management was a great aid in
encouraging the adoption of the new attitude by all workers
and employers. The conditons found in the Glennwood shops
of the Baltimore and Ohio railroad were not dissimilar to
those which might be found in many firms of any industry.
We also saw that as quickly as the workers were guaranteed
fair treatment in return for decreasing their restrictive
practices, much of the discontent both from the workers and
the management ceased. This same thing was noticed in the
clothing industry in Chicago. Therefore, we can conclude
that if this same sort of guarantee were promoted in other
industries the likelihood is that the discord would also
decrease there.

We also saw from the co-operative management experiments
discussed in the previous chapter that when the responsibility
for produq_;ion was placed in the hands of the unions, the
efficiency of the plant increased. This was conducive to
the social welfare of the country. Thus, any of these things
which are favorable to the increasing of productivity and
which do not react unfavorably to the workers may be con-
sidered as a means of encouraging the develOpment of labor's
new attitude.

Obstacles to the Success of Labor's New Attitude.

Certain obstacles in the path of the success of labor's
new attitude exist in the labor organizations. The unwill-
ingness of many unions to forego the practice of traditional

policies and attitudes reacts disadvantageously to the

143

success of this new attitude. The failure of many unions to
change their membership rules so as to organize the workers
of a new skill or trade is an example of the obstacles aris-
ing from the labor organizations. Unionism based on trade
or craft lines is held by many students to be in opposition
to increased efficiency of industry. This is apparent when
it is remembered that jurisdictional disputes, although they
are held to be essential to the continuance of craft organ-
izations, are decidedly out of line with the most efficient
methods of production. Union organizations must correct
these erroneous policies or else efficiency can not be in-
creased.

We also saw that some unions continue to rely upon
policieslwhich are not conducive to efficiency although
they are not directly aimed at retarding efficiency. These,
as long as they remain in practice will hinder the growth
or success of labor's new point of view.

Obstacles also exist in industry which hinder the growth
of efficiency. The majority of employers, even in the face
of successful co-operative experiments, are not inclined to
favor methods which will promote labor's new attitude. Many
employers are afraid to make the slightest concession to
labor for fear that advantage will be taken by labor. This
attitude is perhaps the greatest obstacle in industry. An-
other obstacle of large proportions is the motive upon which
industry operates. Profit is exalted to such a point that
the basic rights of workers and of society in general are

often violated from such a worship. This acts decidedly as

1. See Chapter IV.

143

an obstacle, for the eagerness for profits often forces

both the welfare of the workers and of society in general
into the background. It is not the recommendation of in-
timation of this discussion that enterprises should be
conducted at a loss. The only idea in mind is that a little
more attention should be paid to the effects of a given
business upon the workers, other employers, and society

and less to the amount of money which can be made.

Another obstacle in industry which adversely affects
efficiency is the disregard of social planning and control
of industry. Until a concentrated attack is made upon
business enterprise, with the view of lessening the prod-
uction of more goods than can be consumed at prices covering
costs, general social welfare can not be promoted to the
fullest advantage. In other words, a new measuring stick
which includes due consideration of the influence upon cone
sumers, workers, and competitors as well as upon profit must
be used by industry if the welfare of society is to become
a reality.

In general the attitude of the public at large is an
obstacle to the success of labor's new attitude. Public
opinion is the molder of all law, thought, and action.

It continues to defeat the purpose of the new attitude as
long as it bears a semblance of approval of any obstacle
to the realization of the recent changed outlook of labor.
That is, by encouraging the patronage of those firms or
industries which continue to operate on any other basis

than fair treatment to the workers, the removal of such

144

obstacles is hindered.
How These Obstacles May Be Leseepei.

These obstacles may be lessened to a great extent by
the remolding of public opinion. If social approval were
given only those industries which sought to produce with a
motive less steeped in profits and if social approval were
placed upon those labor organizations which sought to in—
crease efficiency and demand nothing which was not just, much
could be gained in the elimination or lessening of the ob-
stacles of the new attitude of labor.

This is of great importance as a corrective program.
There must be some outside support for labor and the best
aid of this kind is public opinion. Not only must there
be a change in public opinion, but the changed opinion must
be put into active practice. Consumers must not only frown
upon those who do not abide by the best forms of industrial
organization, but they must cease to patronize such firms
_or to protect those who act in an unsatisfactory manner.
For example, consumers should do much to change their
attitudes by withdrawing patronage from those industries
which produce under parasitic conditions or from those who
aid the workers in maintaining an improper attitude.

The National Recovery Act and the Success of Labor's New

Attitude.

 

We can see from what has been said in previous chapters
that standard unionism has a decided advantage over company
unionism as far as labor is concerned. Labor in other

countries has been placed on a much more advantageous footing

145

in obtaining the fulfillment of its wishes than has
American labor. The rights to unrestricted organization
and strike are some of the advantages which through the
Clayton Act and the Anti-Injunction law the government has
tried to give to our workers in the past few years. The
former was a failure as far as accomplishing this purpose.
The latter has yet to be tried for its constitutionality.
The National Industrial Recovery Act inoidently
provides for many of the features for which the Anti-Injunc—
tion Law attempted. The specific ways in which this law
is of a distinct aid to unions in accomplishing their new
ideas is found in seetion seven in this law. It provides
for the workers the right to organize as they see fit and
to choose their own spokesmen to bargain for them.
The importance of this lies in the fact that for the
first time labor is accorded legal right to organize and
choose its own representatives. While there may be some
question concerning the legality of this law, there is
sufficient constitutional defense under the police powers
of the government. Although the duration of the new Act
is definitely limited unless extended, it seems to be the
belief of its advocates that the unions can organize
sufficiently to be vastly superior in bargaining position
by the time the law expires.
To carry on the significance of this a little further,
the unions if more fully organized, will be in a better

position to demand and force management to concede to many

of its wishes. Perhaps they will not be able to force

146

co-operation upon management, but they undoubtedly will be
able to demand and receive better wages, hours, and working
conditions. The significance and importance of this new

law is fully realized by labor leaders and everything is

being done within their power to use it to the best advantage.

Collective bargaining has been spoken of in the past
few pages as being as desirable as co-Operative management.
It is the hope, when speaking in this vein, that collect-
ive bargaining systems will here develop into co-operative
management plans as it did in the Chicago clothing market.

The National Industrial Recovery Act further aids in
the development and expansion of labor's new attitude by
forcing employers to standardize wages and hours. This
will do much to eliminate competition which is unfair to
the workers as well as aiding in the solution of the un-
employment problem facing the United States. Specifically
this will be accomplished by setting a minimum wage which
workers can receive and shortening the hours to such a
point that more workers will be required than formerly.

In addition, it will relieve society of some of the par-
asitic industries which will be unable to meet the minimum
wage requirement.

In general, whether this Act becomes permanent or not,
much will be done for organized workers if they Will take
the opportunity and make the most of it. The success de-
pends largely upon public opinion which can be created to

enforce employers to comply with their codes. As has been

mentionei before, it will be necessary to force the Small

14?

minority of employers to abide by the industrial codes. If
this can be successfully carried out, the National Recovery
Act will have done much in increasing the likelihood of the
success of labor's new point of view.

In concluding, it can be said that labor objected to
the early phases of the efficiency movement. Definite policies
were set up and practiced which did act in a restrictive
fashion to efficiency whether they were adopted with that
view in mind or not. This attitude of organized labor has
changed. The new point of view is opposite to the old one.
All of the changes which brought about this new attitude
have not been solely on the part of labor. Management,
general industrial conditions, and public opinion have had
their part in bringing about this change.

Many of the experiments now going on under this new
point of view have been discussed at some length and definite
promising results have been noted. It can besaaid that this
change in attitude both on the part of organized labor and
management must be followed up and taken advantage of if
industrial goodwill is to be achieved. Furthermore, the
rights of both parties must be recognized and observed.
Finally, no one fact, factor, agent, or plan can be held
accountable for the change in labor's attitude toward the
efficiency movement nor can any one plan, system, method,
or device be selected as a panacea for the ills of industrial
relations. All must be considered as contributing to the
change in the trend of industrial relations between organ-

ized labor and the efficiency movement in the United States.

148

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Sheppard, G. H., "Industrial Representation and the Fair
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9

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