This is a volume in STUDIES IN LABOR ECONOMICS Richard Freeman, Series Editor Department of Economics Harvard University Cambridge, Massachusetts Labor in the Twentieth Century Edited by JOHN T. DUNLOP Department of Economics and Graduate School of Business Administration Harvard University Cambridge, Massachusetts WALTER GALENSON Department of Economics and New York State School of Industrial and Labor Relations Cornell University Ithaca, New York ACADEMIC PRESS New York San Francisco London A Subsidiary of H arc our t Brace Jovanovich, Publishers COPYRIGHT © 1978, BY ACADEMIC PRESS, INC. ALL RIGHTS RESERVED. NO PART OF THIS PUBLICATION MAY BE REPRODUCED OR TRANSMITTED IN ANY FORM OR BY ANY MEANS, ELECTRONIC OR MECHANICAL, INCLUDING PHOTOCOPY, RECORDING, OR ANY INFORMATION STORAGE AND RETRIEVAL SYSTEM, WITHOUT PERMISSION IN WRITING FROM THE PUBLISHER. ACADEMIC PRESS, INC. Ill Fifth Avenue, New York, New York 10003 United Kingdom Edition published by ACADEMIC PRESS, INC. (LONDON) LTD. 24/28 Oval Road, London NW1 7DX Library of Congress Cataloging in Publication Data Main entry under title: Labor in the twentieth century. (Studies in labor economics ; v. 1) Includes bibliographical references. 1. Labor and laboring classes—History—Case studies. 2. Trade-unions—History—Case studies. 3. Industrial relations—History—Case studies. I. Dunlop, John Thomas (Date) II. Galenson, Walter (Date) III. Series. HD4854.L26 33Γ.09Ό4 78-3335 ISBN 0-12-224350-1 PRINTED IN THE UNITED STATES OF AMERICA 78 79 80 81 82 9 8 7 6 5 4 3 2 1 LIST OF CONTRIBUTORS Numbers in parentheses indicate the pages on which the authors' contnbutions begin. JOHN T. DUNLOP (1), Department of Economics and Graduate School of Business Administration, Harvard University Cambridge, Massachu­ setts 02163 WALTER GALENSON (11), Department of Economics and New York State School of Industrial Labor Relations, Cornell University, Ithaca, Ithaca, New York 14853 HANS GÜNTER (149), International Institute for Labour Studies, Post- ale 6, CH-1211 Geneva 22, Switzerland L. C. HUNTER (85), Department of Social and Economic Research, Univer­ sity of Glasgow, Glasgow G12 8RT, United Kingdom GERHARD LEMINSKY (149), Economic and Social Research Institute of the German Trade Union Confederation, 4 Dusseldorf 1, The Federal Re­ public of Germany FRANCOIS SELLIER (197), Les Erables 63, 55 Boulevard de Charonne, 75011 Paris, France HARUO SHIMADA (241), Department of Economics, Keio University, 2-15-45 Mita, Minato-ku, Tokyo, Japan TAISHIRO SHIRAI* (241), The Japan Institute of Labour, Chutaikin Build­ ing, 7-6 Shibakoen 1-chome, Minato-ku, Tokyo, Japan 105 ♦Present Address: Faculty of Business Administration, Hosei University 2-17-1 Fujimi-cho, Chiyoda-ku, Tokyo, Japan 102 vii viii I Contributors ROBERT S. SMITH (11), Department of Labor Economics, New York State School of Industrial and Labor Relations, Cornell University, Ithaca, New York 14853 A. W. J. THOMSON (85), Department of Social and Economic Research, University of Glasgow, Glasgow G12 8RT, United Kingdom Labor in the Twentieth Century INTRODUCTION JOHN T. DUNLOP THE WORKER'S CENTURY A reader of this volume must conclude that the twentieth century is likely to be known as the century of the worker or of the employee in ad­ vanced democratic societies. Unprecedented improvements in the living standards, social status, economic security, political power, and influence of industrial workers have occurred in this century. In taking the measure of this epoch, however, it should not be forgotten that this century generated at least two periods of world wide warfare. Sumner H. Slichter enunciated something of the same theme in 1948 when he said the United States is gradually shifting from a capitalist community to a laboristic one, that is a community in which employees rather than busi­ nessmen are the strongest single influence. A community in which em­ ployees are the principal influence will have its own way of looking at things, its own scale of values, its own ideas on public policies, and, to some extent, its own jurisprudence.1 One of the great merits of the perspective of a century is that underly­ ing tendencies and fundamentals stand out in sharper focus. Cyclical phases and climacteric events in the aftermath of war, depression, or social upheavals, as occurred in the later 1960s in many countries, are more soberly perceived and assessed. Moreover, the first three-quarters of the century provide a desirable frame of reference to consider the course of develop­ ments out to the year 2000, recognizing that simple extrapolations are seldom warranted. 'Sumner H. Slichter, "Are We Becoming a 'Laboristic' State?" New York Times, 16 May 1948. Reprinted in Potentials of the Amencan Economy, Selected Essays of Sumner H. Slichter, by John T. Dunlop (Cambridge: Harvard University Press, 1961), p. 255. 1 Labor in the Twentieth Century Copyright © 1978 by Academic Press, Inc. All rights of reproduction in any form reserved. ISBN 0-12-224350-1 2 / John T. Dunlop The comparative method of reviewing labor in five advanced demo­ cratic countries has the further reward of helping to highlight both the common elements and the distinctive features of each country during this remarkable period for the worker and the employee. A common initial outline was adopted for each chapter, although each author was urged to stress those elements and develop those themes that were of particular significance to his country. Every chapter contains statis­ tical series, carried as far back to the start of the century as the data permit for employment, unemployment, wages, hours, and labor disputes. The growth and operation of labor organizations, collective bargaining institu­ tions, the political activities of labor, and labor legislation are common features. Each chapter also seeks to identify the major future problems and prospects. LIVING STANDARDS Despite very different starting dates in industrial development, and quite diverse policies of industrializing elites, not to mention differential rates of growth in particular decades, unprecedented changes in the eco­ nomic and social status of ordinary workers have taken place in these five countries in the twentieth century. The magnitude of these changes is without an historical parallel, and such changes do not seem likely to be repeated on the scale of this century.2 These changes occurred in the process of industrialization. "The industrial system everywhere has its managers, its managed and a pattern of interaction between them." 3 1. Workers and employees have become quantitatively the largest component by far in economic activity. Moreover, their absolute numbers have also grown rapidly with natural population increase and, in some of these countries, with immigration or temporary migration in some periods. Workers and employees are numerically dominant. The production structure, to use Kuznets's 4 term, reflects significant relative declines in employment in agriculture and the primary sector. Correspondingly, there have been marked relative increases of workers 2For some purposes in some countries a different 100-year span, such as 1860-1960, might produce even larger changes. But this perspective utilizes an even century in the Grego­ rian calendar for all countries in the comparison. 3Clark Kerr, John T. Dunlop, Frederick Harbison, and Charles A. Myers, Industrialism and Industrial Man (Cambridge: Harvard University Press, 1960), p. 15. Also see by the same authors, Industnalism and Industrìal Man Reconsidered (Inter-University Study of Human Re­ sources in Rational Development, Final Report, Princeton, N.J., 1975). 4Simon Kuznets, Economic Growth of Nations, Total Output and Production Structure (Cam­ bridge: Harvard University Press, 1971), pp. 309-313. Introduction I 3 and employees in the service sector and public employment, with small or larger relative increases in the goods-producing industries. The participation of women, particularly married women, in wage and salary employment has grown significantly in most countries, particularly in the post-World War II period. These changes are said to be related to higher education levels, smaller family size, reduced hours of work, rise in clerical and service occupations, and other factors. There have also been significant changes in occupations associated with reshaping the production structure, as in the relative decline in ag­ ricultural laborers and domestic servants and in the growth of professional, technical, and administrative as well as clerical and service employees. 2. The compensation of workers and employees, after allowing for changes in consumer prices, has increased dramatically thus far in this century. E. H. Phelps Brown has documented this point in his outstanding studies of a closely related hundred years. "In the short span of time since the Fourth Ice Age, men have achieved two bursts of technical progress so concentrated and extensive that they deserve to be called Revolutions. One was the Neolithic Revolution, that came about ten thousand or more years ago. The other was the Industrial Revolution." 5 In the 75 years after 1900 it would appear that real wages increased on the order of 3 to 5 times among the five countries. (Brown's data for the 100 years from 1860 to 1960 range between 4 and 6.5 times for four of the five countries common to these two volumes.6) The rise in real wages was accompanied by marked reductions in the average hours of work. In the 75 years after 1900 it would appear that weekly hours worked were reduced in a range of 25 to 35% among these countries. The scheduled weekly hours now converge around 40 hours or a little less. There also has been a significant shift in the lifetime distribution of education, work, and leisure. In the United States, for instance, life expec­ tancy for men in 1900 was 48.2 years—10.0% spent in preschool, 16.6% in school, 66.6% at work, and 6.5% in retirement. By 1970 life expectancy for men had risen to 67.1 years—7.4% in preschool, 18.0% in school, 59.7% at work, and 14.8% in retirement. The rise in life expectancy and the greater fraction of time spent in education and in retirement, with a smaller frac­ tion of time at work, is a notable measure of the change in the status of male workers and employees.7 5E. H. Phelps Brown with Margaret H. Browne, A Century of Pay, The Course of Pay and Production in France, Germany, Sweden, The United Kingdom, and the United States of America, 1860-1960 (London: Macmillan, 1968), p. 25. «Ibid., p. 31. 7Fred Best and Barry Stern, "Education, Work and Leisure: Must They Come in that Order?" Monthly Labor Review, July 1977, p. 4. 4 I John T. Dunlop 3. The average number of years spent in education has increased sharply in the period after 1900, and the fraction of the age group going on to higher education has increased very sharply, particularly since World War II. The access to higher education has become more generally avail­ able in these societies over the period studied. Chapter 5 describes the active role of education and manpower training in Japan as an important policy tool deliberately used to achieve the goal of industrialism in that economy. 4. In the perspective of the period since 1900, there appears to be no discernible trend in the average rate of unemployment. If any tendency emerges in these countries, it is for a decline in the variability of unem­ ployment rates around the mean. 5. All of the five countries examined have become welfare states with a spectrum of public policies designed to protect workers, employees, and citizens generally, from the risks of illness, retirement, accidents, dis­ abilities, involuntary idleness and to facilitate housing, training, and other assistance. It is difficult, at best, by resorting to these generalizations or by refer­ ence to the detailed statistical series for the separate countries to capture fully the quality of the changes in the economic status of workers and employees. Another means is to refer to autobiographical material and reports on the conditions of life and work at the turn of the nineteenth century and to make comparisons with today. 8 INDUSTRIAL RELATIONS AND POLITICAL ROLE In the twentieth century, labor unions have established a secure place in the economies and societies of these five countries, despite the wartime repressions that occurred in three of them. As is discussed in Chapter 3, unions in Germany "tend to see themselves as a central part of the demo­ cratic infrastructure." The role of labor organizations in the economic, industrial relations, and political lives of these countries today stands in 8While the representativeness of individual reports are open to question, such social history can be a useful supplement to general data. See, for instance, Eli Ginzberg and Hyman Berman, The Amencan Worker in the Twentieth Century, A History Through Autobiographies (Glen- coe, 111.: The Free Press of Glencoe, 1963), pp. 27-144. For a more general type of presenta­ tion, see, Stephan Thernstrom, Poverty and Progress, Social Mobility in a Nineteenth Century City (Cambridge: Harvard University Press, 1964) and The Other Bostonians, Poverty and Progress in the Amencan Métropoles, 1880-1970 (Cambridge: Harvard University Press, 1973). For the British condition, see, E. H. Phelps Brown, The Growth of Bntish Industnal Relations, A Study from the Standpoint of 1906-1914 (London: Macmillan, 1959), pp. 1-113. Introduction I 5 marked contrast to the weaknesses and restraints that characterized their positions in 1900. In the mid-1970s these five countries—all leading powers of the demo­ cratic world—had an aggregate population of almost 500 million, with a combined labor force of approximately 220 million, one-fourth of whom were reported to be members of labor unions. The figures ranged among countries from approximately 20 to 45%. At the turn of the century, the range was more likely to have been 5 to 10% of the labor force. Moreover, the meaning of being a member of union has changed significantly over the years since 1900. In the mid-1970s in England and West Germany labor parties and their political allies constituted the governments; in France and Japan the unions were mainly allied with the parliamentary opposition to the elected governments; in the United States the unions were not as formally related to political parties as in the other four countries, but sought to use their considerable electoral and lobbying influence for particular candidates or legislation. In all these countries, unions had grown to be a power in the economy and polity. The chapters in this volume underscore the importance of the back­ ground of the industrialization process in a particular country, the policies of the industrializing elites, and wartime transformations in shaping the distinguishing features of the industrial relations system and its political role at formative stages in each country.9 The speed of industrialization and the need to attract labor in a sparsely populated country, or to recruit and train a labor force from agriculture, or acquire it through immigration are shown to be significant factors in an industrial relations system at various stages in Japan, Ger­ many, France, and the United States. As is stated in Chapter 2, "the influence of history has been stronger in Britain than elsewhere. . . . Britain had the most evolutionary system of industrial relations in the twentieth century." The trauma of war and its aftermath were decisive in shaping the current arrangements in both Japan and West Germany, while in Chapter 4, reference is made to the "rapidity of the social transformation that has taken place in France since World War II." The attitudes of employers toward workers, unions, and employer associations as well seem to have been influential in shaping industrial relations. In Britain, "employer associations were less antiunion than those in other countries [Chapter 2 of this volume]." There appear to be differences among countries based on whether labor organizations created political parties (as in England) or political 9John T. Dunlop, Industrial Relations Systems, 1958, (Arcturus Books Edition, Carbondale and Edwardsville: Southern Illinois University Press, 1977).