CHAPTER XI.

COST OF LABOUR IN DIFFERENT COUNTRIES.

HAVING in the preceding chapter traced the upward variations of wages in different countries, it now becomes necessary, in order to a correct appreciation of their relative economic conditions, to compare their circumstances in regard to the cost of labour.

That the manufacturing supremacy of a nation will ultimately be determined by this item, all other things being equal, is too obvious to need much argument. Before proceeding further, however, it is necessary that we should arrive at a correct and specific definition of the term "cost of labour," otherwise we shall be likely both to mislead and to be misled. The amount of wages paid for a given period or amount of service, does not always, nor invariably, represent the true cost of the work done. Labour must be considered in reference to its quality, its efficiency, and the character of the work on which it is employed, as well as with reference to its nominal remuneration. The Bengal ryot, who is paid 2d. to 3d. per day, renders services that are nominally very much cheaper than those of the Dakota wheat-grower, who receives, perhaps, thirty or forty times as much for the same period of work; but if the American agriculturist produces, as he often does by the aid of his improved machinery, 45 to 50 bushels of wheat per day, where the ryot, with his antiquated appliances and his slower pace, only produces two or three, the more highly-paid labour may, after all, be the most economical. Still another example on a much larger scale may be

quoted. The number of persons employed in agriculture in the United States is, as we have shown elsewhere, much less for a given area than in our own country. Now, it is quite possible that differences in the climate, or in the fertility of the soil, &c., may render some such disparity a necessity; but if it should happen that the difference is mainly due to the greater efficiency of American agricultural labour, aided by improved machinery, it would almost certainly be found that the more highly paid labour of that country was after all cheaper than our own.

Mr. Atkinson, of Boston, has been so far impressed with such considerations that he calls attention to the following as popular fallacies :

1. That the cost of production of any given article can. be ascertained by finding out and comparing the rates of wages paid in its production in different places.

2. That low rates of wages are necessary to low cost of production; and that high rates of wages can only be paid consistently with high cost of production.

3. That inasmuch as labourers work for wages, wages enter directly into the cost of production, and, therefore, cheap labour can only be assured by the payment of low rates of wages.

4. That an employer must of necessity be able to hire labourers at low rates of wages in order to make goods at low cost.

These so-called fallacies are met by the following counter propositions, viz. :

1. That the rate of wages constitutes no standard even

of the money cost of production, which cost must be made up by adding together the sum of all wages, and dividing by the product, in order to establish a unit of cost in money by way of a

unit of measure-whether by the yard, barrel, or pound.

2. Low rates of wages are not essential to a low cost of production, but, on the contrary, usually indicate a high cost of production-that is to say, a large measure of human labour, and a large sum of wages at low rates. Conversely, high rates of wages may, and commonly do, indicate a low cost of production-that is to say, a small proportion of human labour, and a small proportionate sum of wages at high rates in a given quantity of product.

3. Cheap labour, in a true sense, and low rates of wages are not synonymous terms, but are usually quite the reverse.

4. An employer is not under the necessity of securing labour at low rates of wages, in order to make cheap goods, but he may; and commonly does, pay high rates of wages for the very purpose of assuring the production of goods at the lowest cost that is, in order to be able to sell them on the lowest terms.

It will probably be thought that Mr. Atkinson in these postulata carries the argument to its extremest limits; but his conclusions are put forward with so much force that they can scarcely fail to produce that impression of reserve and caution with which the reader should always receive a statement of the cost of production, when based on wage statistics alone.

It should, at the same time, be remembered that there is no other criterion of the capacity to produce cheaply so obvious, and so easily ascertainable, as that of rates of wages, and therefore no other test is at once so valuable and so susceptible of ready application. The comparative efficiency of labour can only be determined by experiments carried on over a considerable period, and even in making such experiments, it seldom happens that the

conditions of the comparison are so strictly relevant and parallel as they should be in order to be of real value. The same remark applies to the comparative merits of mechanical aids to manual labour, which must be determined, not alone by their proved capacity to turn out a given quantity in a given time, but also by their productiveness relatively to their first cost, their liability to get out of repair, their durability, and so forth.

There is still another, and a scarcely less formidable difficulty attending any attempt to compare the average rates of wages in different countries. It seldom happens that a manufacture is carried on in any two countries under precisely similar conditions. Nearly every country has methods of working and mechanical appliances more or less peculiar to itself. In no two countries are the hours of labour precisely alike. In no two countries are the relative proportions of women and children to adult male employés quite the same. Nay more, it rarely happens that the rates of wages paid in any two districts of the same country are exactly on all fours, even in the same employment. Who can say what is the average rate of agricultural labourers' wages in England? It varies, as we have seen in the preceding chapter, from 178. or 18s. per week in the northern, to 10s. 6d. or IIS. in the southern and western counties; but how is the real mean to be arrived at? To establish such a mean correctly, it would be necessary to ascertain the actual wages paid, not only in each county, but in each district of each county, and even then we should be liable to fall into error, unless the "extras" and "privileges" allowed in each separate case could be precisely ascertained, and their actual value appraised. All this would obviously be attended with so much difficulty, while the disturbing elements would be found so numerous and so serious, that it is very doubtful whether, after all, anything more than a rough approximation at the real facts could be attained. And if the

difficulty is great in reference to an employment so simple and so uniformly parallel in its conditions as that of agricultural labour, how much more serious must it be in reference to manufacturing industry, in which the conditions are so variable, so uncertain, and so often conflicting and indeterminate? The candid student of wage statistics is bound to admit that in this case the perils that environ his steps almost overwhelm him. He finds that methods of working vary as between one district and another; that the hours of labour are seldom uniform; that in some cases wages are largely increased by overtime, that in others they are greatly reduced by inadequate demand; that here the average is raised by the limitation of apprentices, while there it is depressed by the opposite cause; and it even happens, and not unfrequently, that the very name of the employment varies as between one district and another of the same country.

Having so far cleared the way, we will now proceed to consider, as carefully as the available data will allow, the differences that distinguish the wages cost of labour in different countries.

And first with reference to the United Kingdom. The average rate of wages in specified occupations in this country, as well as the larger question of the aggregate and average individual earnings of the whole working population, have at one time and another been the subject of very careful and able investigations by statists of repute. Professor Leoni Levi, who has devoted perhaps more time, and bestowed more competency upon this matter than any other living authority, has quite recently, in a report,' which we recommend to the study of the reader who may be interested in following the subject further, computed that the average earnings of the industrial population of the United Kingdom, taken as a whole, is £45, 16s. per annum, and that the average earnings of the whole wage-earning population of the country, including domestic, commercial, agricultural, and industrial,

1 "Wages and Earnings of the Working Classes." London, 1885.