132 SECTIONAL ADDRESSES. 



employment for regular work in industries in which such conditions were 

 formerly rare. 



This comparative disregard of unemployment in wage determinations 

 is as distinctive a change from pre-war practice as the extension of col- 

 lective bargaining, and much more significant for the problem we are 

 now examining. Summing up the practice of trade unions at the 

 beginning of the century, Mr. and Mrs. Webb pointed out that the unions 

 had ' a rough and ready barometer to guide (them) in this difficult navi- 

 gation.' They continued : 



' So long as a trade union, without in any way restricting the numbers 

 entering its occupation, finds that its members are fully employed, it 

 can scarcely be wrong in maintaining its Common Rules at their existing 

 level, and even, after a reasonable interval, in attempting gradually to 

 raise them. . . . 



' When the percentage of workmen out of employment begins to rise, 

 it is a sign that the demand for their particular commodity has begun 

 to slacken . . . although it can in no way be inferred that the slackening 

 of demand has been caused by the rise in the level of the Common Rule, 

 rather than to any other of the many possible causes, yet this slackening, 

 however it is caused, must necessarily check any further advance. For 

 assuming the workmen to rely exclusively on the Device of the Common 

 Rule, it will not pay them to obtain a rise ... at the cost of diminishing 

 their own continuity of employment. To put it concretely, whenever 

 the percentage of the unemployed in a particular industry begins to rise 

 from the 3 or 5 per cent, characteristic of " good trade," to the 10, 15, or 

 even 25 per cent, experienced in " bad trade," there must be a pause in 

 the operatives' advance movement.' ^ 



If organised workpeople in this way took unemployment as an index 

 of industry's capacity, and adjusted their claims accordingly, imorganised 

 workpeople certainly could not do otherwise. Any temporary success 

 that the latter might achieve in maintaining or advancing wage-rates, 

 where commercial conditions called for a reduction, would have the effect 

 of excluding from employment a mass of labour that would press upon 

 the restricted openings for employment, and inevitably, in the absence of 

 trade union or trade board support, lead to individual concessions and 

 the disintegration of wage-standards. 



Hence pre-war industry exhibited a fairly close correlation between 

 the movement of wage-rates and employment as measured by the 

 (inverted) trade union unemployment percentage curve. There was a 

 lag, but, allowing for this, a fairly close adjustment of wage-rates to 

 changing commercial conditions. This correlation is not to be observed 

 in post-war industry since 1922. In the great upward movement of prices 

 from 1914 to 1920 and in the ensuing collapse from 1920 to 1922, wages 

 followed other prices ; but since then wages on the average have changed 

 very little, while both prices and unemployment have varied considerably. 

 If we consider, not the average movement, but the independent and 

 divergent changes in wage-rates in separate industries, what we notice 

 is not an adjustment of wages to conditions of employment, but, as is 



' Industrial Democracy {\902), pp. 738 et seq. 



