Popular Science Monthly/Volume 80/March 1912/Efficiency Wage Standards

by Scott Nearing

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EFFICIENCY WAGE STANDARDS

By Professor SCOTT NEARING

UNIVERSITY OF PENNSYLVANIA

EFFICIENCY, when applied to personal capacity, signifies a maximum of return with a minimum of outlay; hence one man is more efficient than another if, with a given expenditure of energy, time, raw material or capital, he can secure a larger, though equally good, product. The term efficiency is thus purely relative, since there is no known limit to human possibilities.

Each progressive employer aims to promote the efficiency of his working force, for unless he secures a maximum return in product for a minimum outlay of administrative ability, he himself is inefficient. That manager who, other things being equal, produces the highest net return for his outlay is looked upon as the most efficient manager. Yet in producing this outlay no one factor plays a more important part than the efficiency of the labor force which the manufacturer has at his command. How then can he increase this labor efficiency? How insure a maximum productive power among his workers?

Several attempts have recently been made to answer this question practically and definitely by inquiring, "How much money is necessary to maintain an efficiency standard of living?"—that is, how much money is required to supply food, clothing, housing, education, recreation and the other necessaries of life in sufficient quantities to enable the recipient and those dependent upon him to maintain normal health, strength and intellectual acumen. A successful answer to this question will, in a measure, enable the employer to gauge the efficiency possibilities of his labor force.

Several very careful studies have recently been made, which are remarkably uniform in their conclusions as to the amount necessary to maintain efficiency in the various cities under consideration. Of these studies, by far the most exhaustive is that made in New York City in 1907 and 1908.^[1]

An analysis of the family budgets of four hundred workingmen, together with an exhaustive study of food values, housing, clothing and the like, led to the conclusion that: "An income of $900 probably permits the maintenance of a normal standard, at least so far as the physical man is concerned. . . . Whether an income between $800 and $900 can be made to suffice is a question to which our data do not warrant a dogmatic answer."^[2] The family to which these conclusions referred is a "normal" family, consisting of a man, wife and three children under fourteen years of age.

In the same report appears an analysis of one hundred workingmen's families in Buffalo, with the conclusion that before they were applied to Buffalo, the New York figures should be reduced by $150,^[3] and this estimate is probably confirmed by a later Buffalo study.^[4]

In Homestead, a suburb of Pittsburgh, a recently completed study covered ninety-nine families, from whose budgets the investigation concludes: "It is not until we cross the $20 (a week) mark that we feel that the family is well provided for and need, if provident, have no fears for the future."

A report of the Maryland Labor Bureau contains the following statement relative to Baltimore: "A family of six living in any large American city on less than $1,000 will wear neither diamonds nor velvet, nor will their children get the benefits of high schools nor technical colleges; indeed, they will not have more than the necessities of life."

The available authorities are, therefore, in practical agreement that an efficiency standard of living can be maintained in the cities of the Middle States on from $750 to $900, varying with the family, the nationality and the city. Accepting these conclusions as a basis for further argument, we must next inquire how the wages actually paid compare with this efficiency standard, since the relation of workingmen to efficiency standards is, in the last analysis, measured by the wages which they receive.

How many men earn from $750 to $900? In other words, how many workmen receive sufficient wages to enable them to rear three children, give them enough nourishing food, warm clothes, a decent house, an education to their fourteenth year, and a legitimate amount of recreation? An answer to this problem is best sought in the able statistics of American wages.

The available statistics of classified wages, which are, in the last analysis, the only really valuable wage statistics, permit of conclusions regarding the wages paid to both males and females. The following table, containing a brief summary of the available data on the wages of adult males, furnishes the most accurate available answer to the question "What are wages?" For brevity, the table covers only five income groups, for each of which the cumulative percentages are set down. Throughout the table, these statistics are remarkably uniform. About one half of the adult males receive less than $13 per week ($600 per

Cumulative Percentages of Males receiving certain Classified Weekly Earnings. Compiled from certain Efforts 1908-1910

Classified Weekly Earnings	Massachu- setts 21 Years and Over[5]	New Jersey 1909, 16 Years and Over[6]	Kansas 1909 16 Years and Over[7]	Wisconsin 1906-7, All Males[8]	Bethlehem Steel Works 1901 All Males[9]	Railroads of the U. S. 1909. All Males[10]
Under $ 8	12	18	8	12	8	22
Under 12	52	57	46	59	60	51
Under 15	72	74	70	89	75	78
Under 20	92	91	91	98	92	92
$20 and over	8	9	9	2	8	8
Total employed	380,118	204,720	50,720	128,334	9,184	1,502,823

 

year); while less than one tenth receive wages of more than $1,000 per year. All of the reports, therefore, present a remarkably uniform picture of the wages of adult males.

Here, then, is an effective answer to the question, "What are wages?" A study of the above table shows that half of the adult males working in the industrial sections of the United States receive less than $600 per year; three quarters are paid less than $750 annually, and less than one tenth earn $1,000 a year. These figures are not accurate, however, since they are all gross figures, including unemployment. They should be reduced by, perhaps, 20 per cent.,^[11] since that reduction would make all due allowance for unemployment, varying with the year, the location and the industry. Making, therefore, a reduction of one fifth in those gross earnings, it appears that half of the adult males of the United States are earning less than $500 a year; that three quarters of them are earning less than $600 annually; that nine tenths are receiving less than $800 a year, while less than ten per cent, receive more than that figure.

Briefly summarized, the available wage data lead to these conclusions for the localities in which the data were collected, and by reference for neighboring localities. The annual earnings (unemployment of 20 per cent, deducted) of adult males employed east of the Rockies and north of the Mason and Dixon Line are distributed over the wage scale thus:

Annual Earnings	Adult Males
Under $200	——
Under $325	1/10
Under $500	1/2
Under $600	3/4
Under $800	9/10

Accepting as accurate the standard of living studies which set the efficiency minimum for a man, wife and three children under fourteen at $750 to $900 per year, it appears that a very large group of American wage earners are unable to support their children on an efficiency basis. If unmarried, their wage is adequate; if married, with a family of more than three children, their wage is insufficient to maintain efficiency. As the average American family is five, many of these earners are probably receiving less than efficiency wages. If this apparent discrepancy between wages and an efficiency standard of living really exists, it should have a reflex in underfed children, in undesirable living conditions, in anemic men and women—that is, in the typical products of low efficiency standards. That such products do exist, the meager data at hand indicate; but the exact character or extent of the low standard condition is most uncertain. John Spargo in a recent book^[12] attempting to estimate the number of underfed children in the schools, concludes that there are between 60,000 and 78,000 such in New York City alone. A much more authoritative study is contained in a report of the Chicago School Board, which asserts:

Five thousand children who attend the schools of Chicago are habitually hungry. . . .

I further report that 10,000 other children in the city—while not such extreme cases as the aforesaid—do not have sufficient nourishing food. . . .

There are several thousand more children under six who are also underfed, and who are too young to attend school.

The question of food is not the only question to be considered. Many children lack shoes and clothing. Many have no beds to sleep in. They cuddle together on hard floors. The majority of the indigent children live in damp, unclean, or overcrowded homes, that lack proper ventilation and sanitation. Here, in the damp, ill-smelling basements, there is only one thing regarded as cheaper than rent—and that is the life of the child.

We find that a large number of children have only bread, saturated in water, for breakfast day after day; that the noon meal is bread or bananas, and an occasional luxury of soup made from pork bones; that children often frequent South Water Street begging for dead fowl in the crates or decayed fruit; that others have been found searching for food in alley garbage boxes, and several cases were reported where hungry children at school picked up crusts of bread or fragments of lunch which other children had thrown away.^[13]

Families are not only undernourished—they are badly housed as well. Here, for example, is a description of the housing facilities afforded a group of Pittsburgh steel-mill workers.^[14]

In one apartment a man, his wife, and baby and two boarders slept in one room, and five boarders occupied two beds in an adjoining room, . . . Not one house in the entire settlement had any provision for supplying drinking water to its tenants. . . . They went to an old pump in the mill yard—360 steps from the farthest apartment, down seventy-five stairs. This town pump was the sole supply of drinking water within reach of ninety-one households comprising 568 persons. . . . Another row of one-family houses had a curious wooden chute arrangement on the back porches, down which waste water was poured that ran through open drains in the rear yard to the open drain between this row of houses and the next. They carried other things beside waste water—filth of every description was emptied down these chutes, for these six families and three families below on the first floor had no closet accommodations and were living like animals.

Interest may perhaps attach, in this connection, to the menu of one New York family, the children of which were considered by the examining physician to be undernourished.

Sunday.	Breakfast, bread and tea (no milk).
	Dinner, soup (from soup bone) and potatoes; bread.
	Supper, bread and tea (no milk).
Monday.	Breakfast, bread and tea (no milk).
	Dinner, fried potatoes (lard) and gravy (made from left-over soup).
	Supper, bread and tea (condensed milk in tea).
Tuesday.	Breakfast, bread and tea (condensed milk in tea).
	Dinner, boiled rice with tomatoes (canned).
	Supper, bread and tea (condensed milk in tea).
Wednesday.	Breakfast, bread and tea (condensed milk in tea).
	Dinner, boiled potatoes and stewed tomatoes (canned).
	Supper, bread and tea (condensed milk in tea).
Thursday.	Breakfast, bread and tea (no milk).
	Dinner, bread and molasses (mother out working).
	Supper, boiled cabbage.
Friday.	Breakfast, bread and tea (no milk).
	Dinner, boiled cabbage.
	Supper, bread and molasses.
Saturday.	Breakfast, bread and tea (no milk).
	Dinner, boiled potatoes.
	Supper, bread and tea (no milk).

Individual cases, like the preceding, prove nothing, and none of the data relating to the results of low standards will provide an adequate basis for scientific deduction, but it nevertheless points to conditions such as might easily be anticipated when the discrepancy between efficiency standards and wages actually paid is considered.

Is there any way in which this lowered efficiency, due to low wage standards, can be measured? Are there any directions in which it will be felt by the working force, and hence by the employer?

The standard of living facts and the wage facts are indisputable; low standard conditions are appallingly frequent in some districts. What will the end be?

The members of those families which are forced to live on inefficiency standards are subject to a decrease in (1) physical efficiency, (2) intellectual keenness, (3) disease-resisting power, (4) length of life. No employer who desires to maintain the efficiency of his working force, and what employer does not desire to do so, can afford to tolerate for a moment any one of these four conditions.

He can not afford to work with a labor force which is devitalized physically. Even though modern industry does not demand of the majority of operatives great physical strength, it does demand a good physique, since neither work requiring strength, dexterity nor brain power can be carried forward efficiently and enduringly in the absence of physical stamina. "A sound mind in a sound body" is a good old saying, which holds true in a vast majority of cases.

Intellectual keenness and foresight in the wage worker is one of the essential factors in the success of the employer. Workers must be interested in their work; they must work for the firm; they must apply themselves seriously to the tasks in hand. All of these and many other commonly named requirements are impossible to attain in the face of mal-nutrition, bad housing and insanitation.

Sickness is one of the greatest foes of the manager. Hands are "off." They have headaches, colds, and like ailments in endless profusion. Irving Fisher estimates that in the United States 3,000,000 persons are at all times seriously ill; while the "well man" loses four or five days every year from minor ailments, such as colds, headaches and the like.^[15] Much of the illness is preventable and would be impossible if men and women were not devitalized by low standards of living.

Employers have perhaps their greatest difficulties in replacing men who drop out of the work because of sickness or death, yet the average length of life in the United States is only half what it might well be. Men born in American cities of native white parents live on the average only 31 years.^[15] The length of life in America is astoundingly short, and short because men and women have not the wherewithal to maintain efficiency—a fact which is fully established by the enormously higher death rates among the working classes. When a man or woman drops out of your factory, and you struggle for years to fill his or her place, you are often striving to cure what you might more easily prevent—early death due to low living standards.

Efficiency is an essential item in the success of any business—not the efficiency of any one man, but of the entire working group. Although efficiency is so intimately connected with success, on the one hand, it is no less closely related to standards of living, on the other. The efficiency which leads to success can, therefore, be secured only by maintaining living efficiency through the payment of efficiency wages.

1. "The Standard of Living among Workingmen 's Families in New York City," Robert C. Chapin, New York: Charities Publication Com., 1909.
2. Supra, p. 246.
3. Supra, Appendix V., prepared by John E. Howard, Jr., pp. 315-17.
4. "Decencies which a Laborer's Wage Denies," Frederic Almy, The Survey, Vol. XXIV., p. 368 (June 4, 1910).
5. "Statistics of Manufacture, 1908, Boston, 1909, p. 82.
6. Bureau of Statistics, 1909, Camden, 1910, p. 120.
7. Annual Report Bureau of Labor, 1909, Topeka, 1910, p. 10.
8. Bureau of Labor Statistics, Wisconsin, 1907-08, Madison, 1909, p. 464.
9. Report on Strike at Bethlehem Steel Works, C. P. Neill, Washington, 1910, p. 60.
10. Annual Report Statistics of Railways, 1908-09, pp. 34 and 40.
11. "Unemployment in the United States," Scott Rearing, Quarterly Publications American Statistical Association, September, 1909, p. 539.
12. "Bitter Cry of the Children," John Spargo, New York, Macmillan Co., 1906, Chapter II.
13. Report of Minutes, Board of Education, City of Chicago, October 2, 1908, pp. 4-5.
14. "Painters' Row," Elizabeth Crowell, Charities, February 6, 1909, pp. 914-915.
15. "Modern Social Conditions," W. B. Bailey, New York, The Century Co., 1906, p. 227.