F.— ECONOMIC SCIENCE AND STATISTICS. 129 



in iron and steel have been made automatically under sliding scales based 

 on selling prices ; but the willingness of the unions to adopt and adhere 

 loyally to such a device is evidence that trade union control of wages is 

 quite compatible with extreme plasticity of wages. It is conceivable, 

 therefore, that the most complete plasticity might be secured by the 

 most complete public control, since complete control would remove the 

 fear that a reduction once conceded could never be recovered. 



Again, the change in methods of settlement has not stopped the 

 movement of wages. An examination of the Ministry of Labour's record 

 shows that wage-changes have been more frequent, ample, and extensive 

 than before the war. Mere movement, however, is not decisive. Greater 

 frequency of change was to be expected, since change in general economic 

 conditions has been more frequent, and because the practice of adjusting 

 wage-rates automatically under sliding-scales to changes in the cost of 

 living has spread since the war ; greater amplitude was to be expected, 

 because economic conditions have been more unsettled ; greater extension, 

 because collective bargaining is so much more general. It is the nature 

 of the resulting adjustment, rather than the extent of movement, that is 

 significant. In the post-war period we do not find that the movement of 

 wage-rates adjusts the supplies of different kinds of labour to the demand 

 for them. On the contrary, unemployment persists in most industries 

 after frequent wage-adjustments. We do not even find a uniform 

 adjustment of wage-rates to the varying economic conditions of different 

 industries ; while, on the whole, wages are lowest (by pre-war standards) 

 in the industries that are most depressed, there are important exceptions, 

 relatively high wage-rates co-existing in the chief textile industries and 

 elsewhere, with more than average unemployment. There has been a loss 

 of responsiveness to changes in commercial conditions ; the inovement 

 of wage-rates have failed to establish an equilibrium between the supply 

 of and demand for different kinds of labour. 



If we examine the results actually brought about, the generalisation that 

 suggests itself is that wage-rates are adjusted to the varying degrees of 

 bargaining strength of different groups of wage-earners, in other words, to 

 the factors whose influence was formerly obstructed by unequal trade 

 imion organisation. The commercial condition of the industry in which 

 they are engaged is one factor in determining their strength, but not the 

 oidy factor. Thus wage-rates in the ' heavy ' industries reflect the 

 depression in those industries and the inability of the unions to exact 

 higher rates. But the textile industries, although equally depressed, 

 maintain a level of wage-rates that is relatively high ; in cotton, wage- 

 rates have been unchanged at about double pre-war rates since 1922, 

 partly because the difficulties of the industry are so great that the 

 operatives feel that any sacrifice on their part would be imavailing, 

 partly because the financial difficulties of a large section of the employers 

 have made it impossible for them to face a strike. Similarly the railway 

 directors may think that it would pay the companies and the country to 

 reduce their charges to the depressed heavy industries, but they cannot 

 make further concessions, unless they can reduce their own expenses, in 

 which wages are the most important and the most expanded, and, their 

 demand for the labour they retain being inelastic, they cannot force a 

 1929 IT 



