TEE EFFICIENCY OF LABOR 157 



other words, that efficiency and low wage can not, in the very nature of 

 things, be compatible. In America, the higher wage was for a long 

 time a thing the employer could not avoid, but in Europe it could be 

 avoided. The recognition of the principle and its application to prac- 

 tise has hitherto been left to Germany, who has clearly demonstrated 

 in her mills that it is " the improved workman who is accountable for 

 efficient workmanship," and that it is the totality of the effect of this 

 fundamental economic and educational movement that has brought 

 Germany to the front in the present industrial competition. Dr. Eliot 

 has put it : 



We now know that the most efficient labor and the cheapest in proportion 

 to its product is found where the laboring classes live comfortably, are well 

 housed and fed, develop their intelligence and widen their prospects. The 

 cheapest labor is no longer considered the most profitable. 



Unfortunately, Dr. Eliot's conclusion is, though inevitable, some- 

 what premature so far as the United States is concerned, for it is still 

 largely the rule in practise, though not in theory, to confuse low labor 

 cost per unit with low total cost. Happily, the theory is becoming 

 more and more the practise, and it is well, unless we are willing to be 

 hopelessly outclassed by our neighbors in the competition for the world 

 market. 



There is, however, another factor, and one for which the employer 

 is not so directly responsible, that assists in explaining why modern 

 efficiency systems are not more universally adopted. This is in the 

 fact that until quite recently no means has been available by which 

 the employer could with any degree of accuracy measure the relative 

 efficiency of men or of various systems of organization. The employer, 

 of necessity, has paid one scale of wages to one class of workmen, 

 because, as a rule, he had no means of gauging the amount of work of 

 each man. It is exceedingly difficult to determine exactly what each 

 of a number of workmen does each day, and even if he does know, the 

 difficulty of comparing them is very great unless the work done by each 

 man was of the same nature and done under the same conditions. The 

 result has been that the emplo} r er has kept no individual records, and 

 instead treats all workmen of a class as equals, and pays them the same 

 wage. There may be 20 per cent, who are more efficient than the rest, 

 but he has no means of distinguishing them from the others with any 

 degree of accuracy. The result is that he declines to increase the 

 wages, or makes such increases so small as to be insignificant as com- 

 pared with differences in efficiency. In hiring men he offers the wage 

 for which he can obtain the cheapest man, and if the good man stands 

 out for a higher wage, he usually gets none at all. If the efficient man 

 is to get a higher wage, his entire class must get it, and then the 

 employer is paying the men more than they are worth. If the efficient 



