Cause of Improved Working Conditions - Moral Change or Increased Productivity?

Great Debates
1

It is pretty well known that there has been an enormous change for the better in the lives of the working-class people over the last century. We’ve all read about the long hours, terrible working conditions, and low pay that people endured in the 19th century and beyond. The question is what was the primary cause of the change that brought about the better conditions that we have today. Generally, I’ve seen it attributed to the struggles of labor leaders and other reform elements. Which undeniably had effect. But it would seem to me that it might be possible that the primary mover was simply an increase in worker productivity, that made the improvements economically feasible, and ensured the success of what would have otherwise been a futile struggle.

Firstly, I wonder about where all the money was going. We know that many industrial leaders - the “robber barons” - amassed great wealth while squeezing the last penny out of their poor employees. But while a compelling story on the individual level, such facts are often misleading with regards to their impact on the big picture. Generally, these super-rich people were (and are) so few in number, that even if their wealth would have been redistributed in a more equitable way it would not have made a substantial difference in the lives of the overwhelming majority of poorer people. If this is true (and unfortunately I don’t have any figures to back it up) the primary reason for the poverty of these workers would have to be the fact that they simply were not producing enough wealth.

Further, no one was forcing any person into any particular job. Every guy in a sweatshop or coal mine could have taken a better job if one was available. Apparently nothing was. Or they could have become self-employed. This too suggests to me that it simply was not practical to expect to work under conditions that were substantially better.

So what changed? Likely what changed was the advance of technology, which vastly improved worker productivity. At this point (not one specific point - a gradual change), it became possible to produce enough to justify decent working wages even by working shorter hours.

(I’m not sure how much this applies to the improvements in safety. I imagine it would apply somewhat, to the extent that improvements in safety tend to rob efficiency somewhat. But also, there have been vast strides in non-worker safety, and health in general. I imagine this might make people less tolerant of workplace safety lapses as well.)

Is this nonsense? Obvious? Thoughts, please.

2

You make some interesting points.

Usually, however, it was unskilled labor that was “wrung” for every last penny of work. Skilled labor, having more barganing power, probably had it better off. I wonder if some form of “trickle down” benefits, from the skilled to the unskilled happened?

BTW, why is this in the Pit? Wouldn’t GD be better?

Zev Steinhardt

3

Well, actually, Izzyit was more the other way around. Industrialization meant that production got more efficient…an individual worker could produce more weath, given better machinery, and work that, in the past, required skilled labor, now could be done by unskilled labor, which led to increased unemployment and decreased wages. If you combine that with the general libertarian, pro-business attitude of the government (that the government shouldn’t, or can’t get involved in safety or employment matters…read the Lochner case. In the case, the Supreme Court declares unconstitutional a New York law limiting the number of hours worked in a bakery to 10 a day), there was no real incentive to improve safety conditions and wages.

4

I think you’re underestimating the influence of Organized Labor. If you look at the Ludlow Massacre or the Republic Steel shootings, you’ll see the “Robber Barons” considered labor expendable. Only when they organized fought back did conditions improve. Later, to the detriment of Unions in general but arguably for the good of labor in general, the government took over protecting rights that previously were won by the Unions.

5

Zev, what you would seem to be saying is that today’s skilled workers are subsidizing today’s unskilled workers. I guess that’s true to an extent, through progressive taxation and the like. But I doubt if this is reflected in salaries and working conditions. I think the disparity between today and 100 years ago goes way beyond that.

Captain Amazing - interesting take. But it seems to be predicated on the idea that an increase in productivity will leave output and demand unchanged, but simply alter the need for labor. I would be inclined to think that an increase in productivity leaves the demand for labor (relatively) unchanged, but causes an increase in output and demand (obviously there can be some short-term discombobulation). This is how it seems to work nowadays, anyway. A test of your thesis would be a comparison of working hours and conditions before and after the industrial revolution.

A test of my thesis would be a comparison of wealth distribution over the past 150 years.

Homebrew, I don’t think I am underestimating the influence of labor - I acknowldged in the OP that they fought the struggle and had an impact. But many times the course of history is due to causes larger than the specific battles that dramatize it. I am suggesting that in the earlier years the money simply wasn’t there, and no amount of fighting with greedy capitalists would bring it there. As it became economically feasable, these battles became winnable.

6

Interesting thread. How about reform as a cause of productivity improvement? If changes in employment practices meant that opportunistic behaviour on the part of employers was more difficult and that workers knew this, more mutually advantageous contracts could be made and greater specialisation could be achieved.

Uncertainty about shirking and opportunism are costs of the technology of employment. Reducing employers’ capacity to renege on deals could well have made everyone better off. Obviously I don’t know how big a deal this might have been, but it does address IzzyR’s “where did the money go?” question (“nowhere”) and I’m afraid casts some doubt about whether looking at wealth distribution is going to shed much light on the question.

7

I find it humorously interesting that hawthorne posted on this subject, given that the Hawthorne Effect is a widely known phenomenon in the business world. The Hawthorne Effect is an interesting history lesson regarding worker productivity.

I personally believe that the improvements in working conditions in the US (and most industrialized countries) is a consequence of both factors: increasing moral concern for our fellow man and the neverending quest for improved profits. I can see the motto now, “Better Living Through Altruism and Greed.”

The boundry of who we care about has steadily expanded as society “advances”. Clan, tribe, village, country, those-of-a-similar-culture, all-of-mankind. (That this is true is pretty much self-evident. Why it is true is controversial. Everyone from religious folk to behaviorists take credit. Let’s just leave the cause of this “morality expansion” for a Great Debates discussion.)

This concern for our fellow man put pressure (both internal and external) on the owner to improve working conditions, and as working conditions improved, so did productivity. More could be done with less, which meant more money in the company’s coffer (and by extension, more money in the owners pocket).

There is another aspect to Greed which has to do with the scarcity of skilled workers. It has become increasingly difficult to attract and retain employees. Without an adequate workforce to produce a product, revenues suffer. Therefore it became imperative for owners to create an environment that workers wanted to be in. When only unskilled labor was needed, they were easily replaced because there was an abundant supply of them. Therefore they could be mistreated without affecting the business. Nowdays, with a limited supply of skilled workers, mistreatment is self-defeating.

Unfortunately, there are many employers who still treat their employees like dirt. And would treat them even worse if the law allowed them to. Sadly, progress does not proceed uniformly.

All in all, I believe the relationships between profits, morality, productivity, working conditions, industrialization, etc. all fit into a big positive reinforcing loop of cause and effect.

8

As it turns out, Algernon, my user name is a reference to the Hawthorne Effect (see here and here). I liked your post BTW.

I think we may have got a little ahead of ourselves here. Whilst what people have been talking about is total factor productivity, we have ignored a pretty important determinant of labour productivity, wages and living standards: there is more capital per worker. Even in the absence of technical change or reformed labour practices, this wil improve the conditions of workers.

9

How cool is that? Very cool. (though I couldn’t get the first link to work… lost in the Winter Of Our Missed Content?)

Thank you.

I’m not so sure. Without technical change or reformed labor practices, what would keep the increased capital from flowing only into the owners pocket?

10

This is probably true to a small extent. But I think the overwhelming percentage of the increase has been due to increases in science and technology, as well as factory techniques. There was just as much incentive for those in charge to develop and institute these without any improvement in working conditions - more so, in fact, as they would be getting a bigger portion of the profits.

I’m not sure if I understand you correctly here, but if I do, I disagree. As I understand it, the increased capital per worker would be itself only a result of the increased productivity of the workers.

You are a bit unclear here as to why “as working conditions improved, so did productivity”. Are you relying some previously expressed theory? Or do you mean that capitalists were not that motivated to increase productivity (and profits) when they were already making “enough” as it was, and became more motivated as their profit margins came under pressure from working condition reform?

Also true to a small extent. Still, the most profound changes have - I think - been brought about by legislation and unions, and have been fought against by the capitalists. Which suggests that - on the whole - they did not perceive it to be in their best interests to improve conditions a whole lot. Also, it is not at all clear that skilled workers have had the greater improvements - it is possible that the opposite may be the case (as indeed Zev suggested earlier).

11

Cool, a Marxist! :smiley: Seriously, capital accumulation occurs when there is saving in the economy and investment in excess of what is required to replace the existing capital stock. It doesn’t necessarily require an increase in productivity/ change in technology, although of course that may drive increased investment for the reasons you suggest.

12

Hehehe, little do you know…

But seriously, worker productivity is a function of many factors, some of which (machinery etc.) are themselves capital and not labor.

Exactly. IOW, there’s no reason for there to be an overall increase in capital investment unless there is an increase in return, i.e. productivity. It’s not as if capital is going to enter the market for the express purpose of improving the lives of the workers.

13

As a poor economist and ex-owner/operator this is my take on the matter. Productivity improvements cost money and so most capitalists in the past have worked off the idea of using cheap labor. Labor unions came in and stirred up things and that caused the capitalists to look for another method. That of course was to increase productivity through investment and to treat the workers as an asset not a liability. Things like this do not happen over night or all at once. The truth probably is that we are well along in this phase of business evolution, but there are still dinasaurs out there. One example of the old system continuing to florish is the exodus to third world countries by many of our segments of industry, such as garments, textiles, etc. If this was not possible there would be more investment in such fields as robotics. So in a manner of speaking I vote for the idea of the lack of cheap labor being the driving influence. This is not a personal endorsement of unions, since at best I look at them at best as being “necessary evils”.

14

Cool thread. I’m far from an expert here - I know far less than it seems most of the people here contributing seem to know - but I’ll throw out my theory, anyway. Deal with it. :slight_smile:

First of all, I don’t think overall increases in morality had much to do with it. Look at the current batch of CEOs we’ve got, and tell me that they give a damn about their employees. I know not all of them are like that (by which I mean corrupt and fraudulent), probably not even most, but I think it’s fair to say that what keeps many, if not most, CEOs from following in the footsteps of the Enron-esque isn’t morality, but fear of the law. If they could sell their employees for body parts and claim it as profit, they would, but they figure someone might notice when their husband never comes home from work.

In addition, I think it’s important to point out that people don’t always do what’s in their best interests. People blow their paychecks on frivalous crap when they know they should be saving. People snarf down Twinkies when they know they should be dieting. Short term gratification takes place over long term well-being. Some people don’t look ahead, and some people just don’t care.

I think that the increase in worker safety and happiness in general may have come about on its own in time, but was ushered along in large part because of worker’s rights laws. It would have been in the company owners’ interests to take their money and invest it in making the workers’ lives more comfortable, and give them better advancement opportunities. It doesn’t take a genius to realize that people work harder when they’re happier, and when they have some incentive beyond “Well, gotta eat somehowe.” There was no reason to single yourself out for distinguishment back then - everyone just trudged along. Compare that to today, where people willingly put in overtime to get the Big Boss’s attention, so that they might get a promotion. Happier and motivated employees means higher productivity, which means bigger profits, which means an opportunity to expand, which means even BIGGER profits, and so on.

But there’s a risk involved, if you’re a robber-baron of days gone by. You know that what you’re doing now - working your employees to death - is effective. Treating them like actual humans MAY work better… but why take the chance? Why rock the boat? Enter the government. The passed regulations saying, “Hey, no putting out your cigarettes on the worker’s foreheads, and maybe give them some filters when they’re inhaling toxic fumes, whaddaya say?” Workers got some rights. They became happier. They worked harder. Employers caught on. Eventually we progressed to the 90’s, when employers would give you cars and money and wonderful medical plans just so you would grant them the honor of working for their company. And I would guess, though I don’t have the figures to back this up, that if you looked at the gap between the wealthiest and the common man today and back in the early 1900’s, you would see it’s even bigger now. Just a hunch, though.

To answer the OP more succinctly, I think that improved working conditions initially caused an increase in productivity, which then led to more improvements in working conditions, which led to even better productivity, and so on. Employers treating employees fairly was good for the market, and more importantly, good for the company owners, in addition to being good for the employees. The owners just couldn’t really see that.

Of course, all this is speculation. I would love someone to explain to me why I’m full of crap. That’s how learning is accomplished, right? :smiley:
Jeff

15

Well, not really. Though I do think your comments about morality are misplaced. No one is suggesting that the change in morality was in the form of the capitalists suddenly becoming altruistic and deciding to sacrifice their profits for their worker’s benefits. Rather the suggestion is that the public at large had a change in morality, which caused them to back laws and labor unions which forced the capitalists to cave. This happened. My suggestion, though, was that this change in morality was itself only made possible by the change in economic circumstances, which made new standards feasible and attainable. So there’s the question.

Your other comments appear to be echoing those of hawthorne earlier.

16

This exchange took place a ways back, so I’ll copy more of the text than I normally would…

----- Algernon: This concern for our fellow man put pressure (both internal and external) on the owner to improve working conditions, and as working conditions improved, so did productivity. More could be done with less, which meant more money in the company’s coffer (and by extension, more money in the owners pocket).

----- IzzyR: You are a bit unclear here as to why “as working conditions improved, so did productivity”. Are you relying some previously expressed theory? Or do you mean that capitalists were not that motivated to increase productivity (and profits) when they were already making “enough” as it was, and became more motivated as their profit margins came under pressure from working condition reform?

----- Algernon: Let me try to be a little more clear. I made the statement with the assumption, without cites or proof, that improved working conditions leads to improved productivity. I think the owners were resistant, but internal pressures (unions) and external pressures (legislation) forced change. I think the owners were surprised at the subsequent positive results.

----- Algernon: There is another aspect to Greed which has to do with the scarcity of skilled workers. It has become increasingly difficult to attract and retain employees. Without an adequate workforce to produce a product, revenues suffer. Therefore it became imperative for owners to create an environment that workers wanted to be in. When only unskilled labor was needed, they were easily replaced because there was an abundant supply of them. Therefore they could be mistreated without affecting the business. Nowdays, with a limited supply of skilled workers, mistreatment is self-defeating.

----- IzzyR: Also true to a small extent. Still, the most profound changes have - I think - been brought about by legislation and unions, and have been fought against by the capitalists. Which suggests that - on the whole - they did not perceive it to be in their best interests to improve conditions a whole lot. Also, it is not at all clear that skilled workers have had the greater improvements - it is possible that the opposite may be the case (as indeed Zev suggested earlier).

----- Algernon: I think the scarcity of workers came subsequent to the pressures applied by legislation and the unions, so I don’t think we’re in disagreement at all. The need to attract and retain skilled workers is a relatively new phenomenon.