We cannot dismiss this subject of the relation of the laborer to the product of his labor without a few words regarding the part that arbitration and conciliation have played and are to-day playing in the strife of interests by which the social income is portioned out. Conciliation is a term applied to the regular efforts made by representatives of employer and employed or by a third person to prevent differences from arising or to heal such differences before matters reach an acute stage. Conciliation aims to prevent strikes or other labor troubles ; arbitration seeks to adjust matters when acute trouble has arisen. As is evident, conciliation is preferable, wherever and whenever it is possible.

Both conciliation and arbitration have accomplished much for the preservation of industrial peace wherever thoroughly and honestly tried. Sometimes boards are appointed by employers and employed, and sometimes such boards are appointed by public authority. In the United States a large board with national scope has been appointed by the National Civic Federation. In this board there are representatives of labor and capital, together with other men of national prominence.

Until recently arbitration, even when public authorities have provided boards, has always been voluntary. That is, the findings of arbitration boards were legally binding upon neither employers nor employees, and therefore gained their strength from the awakening of the public interest and the enlightening of the public mind as to the merits of the dispute. Indeed, it came to be a settled conclusion in the minds of economists and others that compulsory arbitration could not be successfully attempted by government. But within the last decade compulsory conciliation and arbitration have been given a trial on a large scale in New Zealand, the successor of the United States as a laboratory of social experiment, and, according to the opinion of some able investigators, the plan has proved its value and practicability. Even those who are not convinced of the value of the system for New Zealand admit that the people after ten years of trial have no desire to return to the chaos prevailing in industry before. Moreover, in 1901, New South Wales passed a law similar in the main to that of New Zealand, after an exhaustive parliamentary inquiry into the working of the New Zealand Act. In the light of these facts the general opposition hitherto manifested toward compulsory arbitration may be lessened or possibly even changed to active support. The question may be regarded as still open.

Factory Legislation and Inspection. Factory legislation and inspection also need a few words of comment in this connection, although the subject has been more fully treated in the chapter on the Industrial Stage in England. Labor laws, honestly conceived and properly enforced, have been productive of incalculable good. England is the model country in this respect, and in our own Union Massachusetts is the banner state. Labor legislation should be designed to keep children away from regular factory work and in the school; it should restrict to the utmost the employment of women; it should limit the hours of employment for different classes of work-people, particularly for women, young persons, and children, to the length of day prescribed by medical experience, and should secure regular and convenient hours of leisure, such as are afforded by a Saturday half-holiday; it should compel employers to fence in dangerous machinery and otherwise guard against preventable accident; and by employers' liability acts it should render employers pecuniarily responsible for accidents to employees. No country has ever suffered in international competition by approximation to the goal here described.


1.General wages are determined by bargaining, between limits fixed on the one side by the product of the labor, and on the other by the cost of subsistence, as modified by the standard of living. The precise wage is determined by the relative strength of the two sides to the bargain.

2.Differences in relative wages are due to special conditions affecting different employments.

3.Labor organizations, a natural development of modern industry, have improved the status of labor, and have cultivated temper' -ance and thrift.

4.Against labor-unions it may be charged that they are based on strife, that they are often short-sighted and ultra-conservative, and are forgetful of broad social interests.

5.Piece-work wages, the sliding scale, profit-sharing, and co÷peration are plans that have been tried for securing to the laborer a more favorable relation to the product of his labor.

6.Arbitration and conciliation are playing an increasing part in the settlement of labor disputes.


1.How does the standard of living affect general wages? Relative wages?

2.Name the circumstances producing differences in relative wages. What is the " Iron Law of Wages " ?

3.Name the different groups of laborers. Classify different occupations according to this grouping.

4.What two types of labor organization are there? Discuss the change in the public attitude toward unions.

5.What are strikes? What are their chances of success?

6.Discuss the different systems of wage payment; their advantages and disadvantages, and their success.

7.Distinguish between arbitration and conciliation. What is the present status of the question of compulsory arbitration ?

8.What are some of the objects that can be obtained through honest labor legislation?


Ashley, W. J.: The Adjustment of Wages. (Excellent reference for joint agreements, the sliding scale, and the tendency of employers and employees to organization.)

Clark, J. B.: The Distribution of Wealth, and article in North American Review, January, 1902, entitled " Consolidated Labor."

Davidson, J.: The Bargain Theory of Wages.

Ely, R. T.: Studies in the Evolution of Industrial Society, Bk. II, Ch. X.

Gilman, N. P.: Profit-sharing.

Lloyd, H. D.: Newest England.

Lowell, Josephine Shaw: Industrial A rbitration and Conciliation.

Rogers, J. E. T.: Work and Wages, Ch. VIII, pp. 196-206.

Schloss, D. F.: Methods of Industrial Remuneration.

Schoenhof, J.: The Economy of High Wages.

Smith, Adam : Wealth of Nations, Bk. I, Ch. I.

Stimson, F. J.: Handbook to the Labor Law of the United States.

Taussig, F. W.: Wages and Capital.

Walker, F. A.: The Wages Question.

Webb, Sidney and Beatrice: Industrial Democracy, Part II, Ch. I,

pp. 49-50, and A History of Trade-unionism. Wright, C. D.: The Industrial Evolution of the United States, Part III,

pp. 273-293, and pp. 301-320.