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Published online by Cambridge University Press: 07 November 2014
The labour problems of expansion and full employment are as intense and numerous as those of depression. Social and psychological problems arise from the twin processes of industrialization and urbanization. Large-scale immigration, and internal migration from rural to urban areas, bring complex problems of social disorganization and cultural conflict. Similar difficulties attend new industrial projects set up in hitherto untouched rural communities and in remote, unpopulated areas. Occupational maladjustments of various kinds are often characteristic of rapid industrial expansion. Labour shortages and bottlenecks develop side by side with pockets of unemployment. Labour-employer relationships become less personal, and internal communication more difficult, as enterprises expand in scale. Restlessness and dissatisfaction arise where workers find difficulty in adjusting to rapid technological change and unfamiliar environments. Employers complain about labour's irresponsibility and insubordination, high turnover and absenteeism, inefficiency and slowdowns.
Other problems are connected with the inflation that usually accompanies rapid economic expansion. Rising prices constantly threaten to outrun wages and salaries. Widening disparities of income among occupational groups generate dissatisfaction and unrest. Reports of high industrial profits, spectacular gains in the stock-market, and the conspicuous expenditures of the nouveaux riches, all provide very real (even if statistically inaccurate) symbols of unfairness in the distribution of income, and encourage labour to make what often seem exorbitant demands upon employers.
This paper was presented at the twenty-fifth annual meeting of the Canadian Political Science Association in London, June 5, 1953.
1 The boom preceding World War I, and that immediately after, were notable examples. There was a pronounced concentration of strikes and lock-outs in Canada during 1911–13 and again during 1918–20. In 1920, unions in Canada reached their peak membership, which was not surpassed until well on in World War II. The largest number of man-days ever lost from strikes in coal-mining occurred during 1911, in construction during 1912, and in the service industries generally, during 1918. Up to World War II the largest number of strikes, and of man-days of employment lost from strikes, in Canada as a whole, occurred in 1919.
The boom period of the later 1920's was a notable exception to the usual pattern, owing perhaps mainly to the unique combination of a stable price level and generally rising wages in unionized and non-unionized industries alike. Labour apathy and lack of interest were such that unions declined in membership and bargaining-power, while labour disputes were far fewer in number and size than in preceding decades.
2 During most periods of prosperity, as pointed out before, hourly rates of pay have tended to lag behind prices. In Canada during the 1920's, while wages increased on the average more than did the general level of prices, they lagged behind increases in average productivity.
3 In proportion to the size of the non-agricultural working population, however, strikes have been at a lower level than was reached in previous peak years before and after World War I. On the other hand, many more disputes in recent years have been settled by conciliation or arbitration than was the case in previous decades.
4 Thus, where average hourly wage rates over the country as a whole rose by 9.5 per cent from 1945 to 1946, 11.9 per cent from 1946 to 1947 and 12.7 per cent from 1947 to 1948, the rate of increase fell to 4.5 per cent from 1948 to 1949 and 5.5 per cent from 1949 to 1950. For the five years as a whole from 1945 to the end of 1950 there was an over-all gain of 47 per cent in average hourly wage rates, while the cost of living was estimated to have risen 43 per cent. The figures are derived from Canada, Dept. of Labour, Wage Rates and Hours of Labour in Canada, for the years 1946 to 1950.
5 Trade Union Wage Policy (Berkeley, Calif., 1948).Google Scholar
6 The decline in real income and status suffered by large groups of unorganized workers during the present era of inflation creates problems that may be every bit as serious as those arising from industrial conflict. The problem, however, is one that is likely to elude the statistician and economic theorist. Dissatisfied workers who are unable or unwilling to unionize and strike for their demands presumably have the choice, as individuals, of resigning from their jobs or of submitting to and suffering the pains of frustration, complete with ulcers and high blood-pressure. But the losses to the community in productivity and output resulting from employee dissatisfaction and deterioration in morale may be just as heavy as those resulting from strikes, or heavier.
7 No attempt is made here to draw any very clear and definite distinction between the terms “disparity” and “differential.” As used in this paper, “disparities” refer to differences in wage rates or other elements of labour income which for one reason or another are resented by union officials and members, and which provoke demands that often lead to strikes. “Disparities” in this sense of the term may often be “differentials” that could be justified on grounds of economic theory or market requirements, such as differences in productivity, in cost of living, or in labour supply and demand relative to capital and resources. Justification of differentials on such grounds, however, does not vitiate the fact that they are a major source of conflict.
Workers and union representatives, of course, do not resent or seek to eliminate all differentials. Nor do all differentials that are resented necessarily lead to strikes. Only a small fraction of all collective-bargaining negotiations each year fail to reach agreement, and thus lead to strikes or lock-outs. And virtually all union agreements recognize and allow for numerous wage and other differentials.
8 According to a survey made in March, 1952, average wage rates in pulp and paper in Canada were 10.4 per cent below the United States level in this industry, while in coalmining they were 48.9 per cent below. Labour Gazette, Jan., 1953, 17.
9 Canadian Congress of Labour, Ottawa, Labour Research, VI, no. 4, 04, 1953, 3.Google Scholar
10 Ibid.
11 By the end of 1945 the index of average hourly wage rates (1939 = 100) was 141.8 for industry as a whole in Canada, 146.5 for manufacturing as a whole, 148.2 for iron and steel, 156.1 for logging and saw-milling, 156.8 for electrical apparatus and supplies, and 160.5 for logging in British Columbia. The figures are derived from Canada, Dept. of Labour, Wage Rates and Hours of Labour in Canada, 1945.Google Scholar
12 In percentage wage increases these were as follows: tobacco products, 100 per cent; slaughtering and meat-packing, 74 per cent; saw-milling and wood products, 65 per cent; logging in British Columbia, 64.5 per cent; pulp and paper, 62 per cent; and electrical apparatus and supplies, 61 per cent. Average hourly wage rates for manufacturing as a whole increased by 57 per cent, as compared to 47 per cent for all industries in Canada. Ibid., 1950.
13 Employment in the logging industry of British Columbia declined by 23.2 per cent, and in pulp and paper throughout Canada by 3.5 per cent, from December 1, 1951 to December 1, 1952. Employment in the building construction industry of British Columbia, by contrast, increased by 51 per cent during this period (from an index of 507.0 to one of 768.81).
The pattern of wage increases has tended to reflect the employment pattern. Average weekly wages during the period above rose by 21.3 per cent in building construction in British Columbia, as compared to 7.4 per cent for British Columbia logging and 4.2 per cent for pulp and paper. Dominion Bureau of Statistics, Monthly Report, Employment and Earnings, Dec., 1952.
14 Labour Gazette, April, 1950.
15 Ibid.
16 Thus between 1945 and 1950, for instance, average hourly wage rates increased by only 42.8 per cent in railways, 48 per cent in electric light and power, and 51.7 per cent in street railways, as compared to 57 per cent for manufacturing as a whole, 62 per cent for pulp and paper and 65 per cent for logging and saw-milling. Canada, Dept. of Labour, Wage Rotes and Hours of labour in Canada, 1945, 1950.Google Scholar
17 Over Canada as a whole average weekly wages increased by 12.5 per cent in the construction industry from December, 1951 to December 1, 1952 as compared to 9.9 per cent in logging, 7.3 per cent in manufacturing, 3.6 per cent in transportation, storage, and communication, 8.2 per cent in public utility operation, 5.4 per cent in trade, 4.4 per cent in finance, real estate, and insurance, 7.9 per cent in service, and 7 per cent in industry as a whole. Dominion Bureau of Statistics, Employment and Earnings, 12, 1952, 5.Google Scholar
18 This policy is motivated by the view held by union officials that jobs with large construction companies tend to be temporary, and that the long-term interests of the unions and their members lie in maintaining demand for the services of specialized plumbing and heating, electrical and sheet-metal contractors, etc., who provide, as far as possible, steady and permanent employment.
19 Labour Gazette, Special Supplement, “Strikes and Lockouts in Canada,” for the years 1946 to 1952.
20 The usual estimate is that, over the economy as a whole, productivity in terms of output per man-hour increases on an average by 2 per cent to 2½ per cent per annum. Hourly wage rates across Canada, however, have increased by 4 per cent to 12 per cent per annum since World War II, and various additional “fringe benefits” would increase the price of labour even more.
21 Cf. Reder, M. W., “The General Level of Money Wages,” in Industrial Relations Research Association, Proceedings (Chicago, Ill., 12 28–9, 1950)Google Scholar; and Wright, D. McC., “Concerning Aggregate Wages,” in Wright, D. McC., ed., The Impact of the Union (New York, 1951), ch. XIII.Google Scholar
22 The underlying cause of inflation in the post-war period, of course, was the huge expansion in currency and deposits, and in public indebtedness, that arose from deficit financing carried on during the war. Inflation and rising prices from this source seemed to be “petering out” by late 1949 and early 1950, as a result of large government revenue surpluses and reductions in the national debt.
Inflation since 1950 appears to have been due mainly to the huge volume of private capital investments, to the extent that these have been financed by influxes of American and overseas capital (except in the form of direct imports of goods), by credit expansion, by the use of hitherto “idle” savings, or by payments for bonds from the federal Government in the process of reducing the national debt. Investments in long-term projects for resource development, as well as for defence plants, would tend to have a short-term inflationary effect, for they generate an increased money income for several years before producing an increased output of goods and services to match.