of that class, or that there should not be any less. High wages indicate a strong desire and low wages indicate a weak desire to have more of a certain kind of work done.

2. Different kinds of labor usually have to be combined in fairly definite but somewhat variable proportions. If there happens to be more of a certain kind than will combine satisfactorily with the existing supply of the other necessary kinds, the oversupplied kind will not be strongly desired. There will. be no great need for more of it and therefore no strong reason for paying high wages. The kind of labor, however, which is undersupplied will be much more needed. There will be a strong reason for desiring more of it, and the only way, in a free society, to get more of it is to offer high inducements. High wages are a powerful inducement.

3. Labor which requires a kind of skill that is difficult to acquire will usually be scarce, relatively to the need for it. Wages must be high enough to induce men to make the necessary effort in order to fit themselves for the work.

4. Unskilled labor is usually abundant, being limited only by the disinclination to work and the standard of living or the cost of bringing up children. Where the cost is high, or the unwillingness great, wages must be high enough to induce men to marry and bring up children. When the cost is low and there is very little unwillingness to overcome, wages may be low because men will bring up children on very low wages and thus keep the supply of labor intact.

CHAPTER XXXVI

THE ORGANIZATION OF LABORERS

Comparative advantages in bargaining. It has long been recognized that in the ordinary bargaining process between laborers and their employers, the laborers are at a disadvantage. The reasons why they are at a disadvantage have been variously stated. It is argued, for example, that the capitalist can wait longer than the laboring man, and thus wear the laboring man out and force him to give in and accept the capitalist's terms. The capitalist, it is said, having an accumulation of wealth, can live on that accumulation. There is doubtless something in this argument, though it is easy to exaggerate it. If the capitalist's accumulation is in the form of buildings and machinery, it is difficult to see how he can live on these things. He might borrow money on the basis of the security which they furnish, and with this borrowed money buy consumers' goods.

It is not so much the fact that he is a capitalist as it is the fact that he has greater borrowing facilities that gives him this advantage. If instead of owning capital he owned consumers' goods in considerable quantities, if he owned, for example, his own house, if he had insurance policies or deposits in the savings bank, he would have the same or even greater waiting power than he has when he owns capital of equal commercial value. It is therefore frequently argued that one remedy for this situation is for the laborer himself, as far as possible, to acquire his own home, life-insurance policies, and deposits in savings banks. This would help, at any rate, to give him the power to wait and would thus help to even up the advantages in bargaining. But the objection to this is the simple observed fact that the laborers have less property of any kind than their employers; otherwise they would not be laborers. This being

the fact, it does not help much to point out what the laborer might do if the facts were otherwise.

Another reason given for the disadvantage of the laborer in the bargaining process is that he is usually less skillful in the matter of bargaining than his employer. His expertness is more likely to consist of manual skill than of skill in bargaining. The entrepreneur is peculiarly a bargaining person. He literally bargains for everything. If he borrows capital, if he rents land, if he buys raw materials, secures transportation rates, and hires labor, or organizes a selling department,-every part of his work has to do with bargaining. He becomes, therefore, the bargainer par excellence. Those whose expertness lies in other directions are therefore at a disadvantage when they come to deal with him. This argument is undoubtedly correct as far as it goes.

Employers are few, but laborers are numerous. The third fact, however, which sometimes militates to the disadvantage of the laborer and the advantage of the employer is that laborers are sometimes numerous and employers are few. Where this is the case there is more competition among laborers for jobs than among employers for men. Wherever this fact does not exist, there is no great advantage on the part of the employer. One conspicuous example would be that of domestic servants. The employer in this case doubtless has more power to wait than the maid. The employer may, on the average, be somewhat more intelligent than the maid. Nevertheless, he has no great advantage in bargaining, for the simple reason that there are approximately as many employers as there are employees. Observation seems to show that, in this country at least, it is far more difficult for an employer to find a maid than for a maid to find an employer. When they meet to arrange terms, there is no visible advantage on the side of the employer or disadvantage on the side of the employee. In fact, it sometimes appears that the advantage and disadvantage are of the opposite kind. There is at least a reasonable number of cases where the employee is very independent and must be

placated by an almost obsequious attitude on the part of the employer. A multitude of other illustrations might be given, which in the aggregate seem rather important, though as compared with the number of cases where the employer is at an advantage and the employee is at a disadvantage they are probably insignificant. Nevertheless, one can safely say that wherever laborers are few as compared with the number wanted, their bargaining power is great, their wages high, and their conditions satisfactory.

It appears, therefore, that the fundamental and permanent remedy for the laborer's disadvantage in bargaining would be such a reduction of the number of laborers and such an increase of the number of employers as would give the labor at least an equal advantage in the bargaining process. This remedy, however, like all fundamental and permanent remedies, is slow and difficult to bring about. It is slow in the sense that it would take a generation or so to bring it about; it is difficult, not for economic but for political and social reasons. Economically it is perfectly easy; politically it is difficult simply because it would be difficult to get a majority of the voters to vote for such a policy. It might take several generations before a majority vote could be secured for a constructive policy of this kind. Meanwhile the existing laborers would still be at a disadvantage and in need of relief. It would be cold comfort to them to point out that future generations of laborers may be exceedingly well off if the right policy is adopted. Therefore they are inclined to take matters into their own hands and adopt a more speedy remedy, even though it be less fundamental and less permanent.

Collective bargaining. This remedy is that which is known as collective bargaining as against individual bargaining. In a trade where laborers are oversupplied, each individual laborer is in a weak position because he can easily be spared. He is almost superfluous; he is certainly not indispensable. If he stops working or leaves the community he will scarcely

be missed. Industry will go on approximately as well without him. Because there is a superfluity of labor his place can easily be filled. Under such conditions his bargaining power is very weak; he is practically compelled to take whatever terms are offered to him. His kind of labor as a whole, however, may be absolutely indispensable. While he as an individual could be spared without much inconvenience, the members of his trade are absolutely indispensable, when considered as a whole. If they were all to stop work, business would have to stop; if they were all to emigrate, the whole business in which they were engaged would be permanently destroyed.

The group may be indispensable, while the individual could easily be spared. The fundamental principle involved in the trade-union policy of the present is the substitution of the indispensable group as a bargaining unit for the dispensable individual. Since the group as a whole is indispensable to industry, if they can bargain as a whole the laborers are in a strong position. As a group they cannot possibly be spared. The difficulty, however, has always been to hold the group together and get them to bargain absolutely as an indispensable group and to refrain from making individual bargains independently of group action.

The trade union. This underlying principle has given rise to one of the largest social movements of modern times; namely, the organization of laborers. Several types of organization, however, have entered the field, and there is still some rivalry among them. In the first place, there is the trade union pure and simple; this is an organization of the men who ply the same trade (that is, the men whose work is of the same kind). The Brotherhood of Locomotive Engineers is an example of this kind of organization.

The industrial union. In the second place, there is the industrial union, which includes all the laborers plying various trades who are engaged in the same general line of industry. The United Mine Workers of America is one example of this type