CHAPTER XIII

THE ADJUSTMENT OF WAGES

THE problem of wages and the method of payment is one that constantly touches every wage-earner, whether employed by the piece or by the week. The story of the rise of the general wage level and of the great wage arbitrations in the Chicago clothing industry since the entry of the union in the market has already been told. In the present chapter it is proposed to direct attention to the broad principles of procedure and of justice governing the establishment of wage rates and their adjustment. Insofar as these principles have been evolved out of the operation of the agreement and the impartial machinery, they form part of the established law of the industry. Instead of wages being left to the arbitrary determination of the employer, at least in the interval between the making of the collective wage contract and its expiration, these laws and principles control the actions of the employer in every detail of his wage relations to the worker. They impose certain obligations upon the employer which spell rights for the worker and the union. From the standpoint of growth in union control, the development of law and justice in this field of industrial relations is even more important than any specific gains in the wage rate itself.

THE MAKING OF PIECE-WORK RATES

We are not here called upon to raise the ultimate question as to the justice of the wage system itself, or even as to what constitutes a "fair wage" in the abstract. It is sufficient for our present purpose if we succeed in finding through a study of the decisions the evolution of certain general principles, whose application secures to the workers such a measure of practical justice as the existing state of industrial organiza

tion permits. The outstanding feature of the wage system as found in the Chicago tailor shops before the 1910 strike, was not so much the generally low level of the workers' earnings as it was the exploitation of those workers through the abuse of the piece-work system of payment.

Piece work has for many years been the prevailing basis of payment in the tailoring operations. While the power of fixing and altering piece-work rates remained unregulated in the hands of foremen, the workers were exposed to all the evils of sub-contracting, speeding, rate-cutting, unfair competition, unfair discrimination, and the like. After the strike, the firm of Hart, Schaffner and Marx instituted a system of written specifications and prices for all operations. Although this standardization resulted in an immediate lowering of earnings for many workers because of increased requirements as to quality, it represented a long step in the direction of a constitutional procedure in the making and adjustment of piece-work rates.

The basis of piece-work rates in the market today are schedules of prices and specifications for all the piece-work operations in each house. The schedules were arrived at in the first place through joint negotiation with the respective houses and made part of the agreement for each house. Since the work of a section in the industry differs more or less widely between shops and from one season to another, the specifications and the prices necessarily vary considerably and often. To meet this necessity and to insure fair prices to piece workers at all times, a joint machinery has grown up under the agreement in the form of a piece-rate committee. The Hart, Schaffner and Marx agreement provides: "Whenever a change of piece rate is contemplated the matter shall be referred to a specially appointed rate committee who shall fix the rate according to the change of work. If the committee disagree the Trade Board shall fix the rate." According to the Trade Board chairman, as a matter of practice, the work of rate making is carried on almost exclusively by the two members representing the company and the people. While some cases are brought before the

full committee, these cases are exceptional when compared to the number settled by the two members."

In the case of each of the larger houses in the market a special union deputy is assigned as price expert, and he acts as the people's representative on the rate committee for that house. In case of inability to agree, this deputy reports to his chief price deputy who, in turn, is the union's representative on the market rate committee. "Whenever a question of piece-work rate arises, it is taken up in the first instance by the two members of the committee and an attempt is made to reach an agreement. If an agreement is reached, a specification of the work to be performed and the rate to be paid is prepared and signed by both representatives without any further action. If, however, the two parties are unable to reach an agreement, the case is taken up with the full committee and an agreement reached, or a decision made fixing the rate and specification. If this decision is unsatisfactory to either party, the decision may be appealed to the Board of Arbitration."

Changes in specifications are proposed, whenever necessary, by the company, being a primary concern of management. But since they concern directly the worker engaged on the operation and may easily affect his earning power, every such change before becoming effective is a matter for joint negotiation, agreement and record by both parties. In the course of an early arbitration decision107 bearing on this matter, Chairman Williams ruled as follows:

"In order that disputes about specifications shall be minimized, the union shall be provided with a copy of all specifications, for the exclusive use of its member of the price committee. He shall make proper examination of such specifications, and if he objects to any on account of undue age, irregularity or other reason, he shall give notice of same, and endeavor at once to arrive at an adjustment and agreement. In case no such notice is served within a reasonable time, all such specifications shall be deemed regular and in force. If there be a serious lapse of standard by the workers below the specifications, the union shall be notified and shall co-operate with the company in restoring the standard of the specification."

Changes in rates, on the other hand, are entirely a matter of collective adjustment. They cannot be instituted, even provisionally, by act of the management. They do not become effective until they have first gone to the Price Committee and been adjusted there on the basis of the changed conditions.

When the Trade Board is called upon to fix a rate regarding which there is a disagreement, the chairman of the Board endeavors first of all to bring the parties closer together on the basis of the agreed facts. If he is successful in leading them to agree on a rate, he then merely gives official sanction to it. Otherwise, he may, as an alternative to fixing the rate himself on the spot, recommend a temporary rate to be applied experimentally and subject to revision. Or he may refer it back to the rate committee for further investigation or observation, or for elaboration as to detail. Thus, in one instance,108 where the price committee had been unable to agree on certain rates, the union requested the Trade Board to investigate and decide. The Trade Board made a ruling with respect only to basic rates for the operations in question, and instructed the price committee to work out necessary differentials, thereby narrowing the field of possible controversy.

When the case of a disputed rate goes to the Trade Board, it is sometimes necessary for the Chairman to make a personal investigation before he can reach a satisfactory decision. The investigation, however, extends merely to the facts in the case. In deciding upon what is a fair price for a particular operation, the impartial chairman is not expected to determine questions of ultimate justice. He is guided by a provision in the agreement which reads: "In fixing the rates, the Board is restricted to the following rule: changed rates must correspond to the changed work and new rates must be based upon old rates where possible." Where this is not possible, existing market rates may become the criterion of fairness. In other words, usage and antecedent collective bargaining or arbitration decisions provide the point of departure from which the Trade Board proceeds.