age and invalidity; (4) insurance against death, or, as it is more usually called, life insurance; and (5) insurance against unemploy

ment.

Could a just and workable plan of insurance covering these several points be worked out, the problem of the economic security of labor, one of the greatest with which society now has to deal, would be solved. Is there any social problem more fundamental or more deserving of unremitting effort?

Each of these five branches of social insurance has its own special problems and considerations; they are united only in respect to their ultimate social end. These special problems can, in each case, be distinguished, for purposes of consideration, into three distinct. classes: (a) the social, (b) the administrative, (c) the technical. Of these the first is the most fundamental. Under this head falls the great question of upon whom shall fall the burden of making the contributions required for the support of the system. No real progress can be made until we, the public, have reached a conclusion regarding the problem of justice that is here involved. As a matter purely of right, of justice, of bringing about the widest possible distribution of welfare, how shall the financial burden entailed by the system be distributed? In seeking to reach an answer to this question we find that the choice lies between placing the burden in whole or in part upon either: (1) the beneficiary, or workman, (2) the employer, (3) the industry in which the workman is employed, or (4) the state.

231. A SURVEY OF WORKINGMEN'S INSURANCE IN THE

UNITED STATES

There are already various systems of industrial insurance in the United States which witness to the universal sense of need of such protection even among those workers who have least developed habits of thrift. These imperfect and unrelated schemes are yet to be developed, co-ordinated, regulated, and combined so as to form a consistent, comprehensive, and adequate system. The hope of progress lies in these germinal beginnings, and the problem immediately before the nation is one of synthesis.

Systems and schemes of industrial insurance.—(1) The workingmen have themselves created organizations for insurance, and thereby express a universal sense of need of this protection; local mutual

1 Adapted by permission from C. R. Henderson, Industrial Insurance in the United States, chap. xii. (The University of Chicago Press, 1909.)

benefit societies, with or without aid from employers, national brotherhoods or fraternals, and trade unions with local branches. (2) Employers have promoted the movement by various methods: local societies of employees, insurance departments of great firms or corporations, contracts between firms and casualty companies, pension schemes of employing corporations. (3) Private insurance companies which sell sickness and accident insurance to workmen, "industrial insurance companies," collecting small premiums weekly or monthly, and furnishing chiefly burial benefits to the low-paid workman, and regular life insurance to those who have higher wages. (4) Organizations of municipal, state, and federal employees for pension funds, as those of teachers, firemen, policemen; the national and state military pensions; homes for invalid veterans. Here also may be counted as auxiliary and supplementary government activities, poor relief, liability laws, protective factory laws and inspection, and state supervision of fraternal societies and insurance corporations. Every one of these agencies and organizations represents some beginning of a movement toward obligatory insurance.

Sickness insurance. The present organs of sickness insurance are: local mutual benefit societies, lodges of the trade unions and fraternal societies, relief departments of railroads, and casualty companies. Naturally this form of insurance is most widely developed among the workmen of cities. Everywhere the organization is voluntary, unless we may speak of constraint to enter the relief departments and other similar arrangements as a condition of employment as compulsion. The local societies are seldom united in groups, and each bears its burden alone.

Accident insurance. The employers' liability law remains in its ancient limits; it is behind the British compensation act of 1897 and much farther behind the German insurance law of 1884. The principle that social care in any explicit way is a duty of the community has never been openly recognized. Compulsory insurance or even compensation is not a part of the legal provisions. Voluntary organizations, fragmentary and unfair in character, are further developed with the railroads than elsewhere. In agriculture there is hardly a discoverable attempt in this direction.

The railroads have generally sought to insure their employees either through agreements with casualty companies or by relief departments; but the employees must carry the greater part of the burden. The employers in other dangerous trades have often

organized accident insurance, but generally the schemes load the employees with premiums, cover only a part of the real loss, and lack full actuarial basis. There is nowhere state supervision or direction, no obligation to insure, no unity or uniformity of method; mostly anarchy. The administration varies with the form of organization; in the mutual benefit associations the matter is directed by a committee with officers and clerks; in the trade unions the lodge governs the direction; and in casualty companies all is administered by the central office.

In the relief departments of railroads and in the casualty companies the fund is provided by payment of premiums at intervals in advance. No example has been found of groups of employers federated to provide accident insurance; and, indeed, the motive is lacking for such organization.

Old age and invalidism.—A few of the trade unions have begun to establish funds for old-age retirement benefits. The fraternal societies exhibit a serious defect at this point. Under their system they can carry life insurance only to the region of old age and then the "brother" must care for himself, a very inconsistent kind of fraternity, yet inseparable from present methods. Some of the railroad corporations and even private firms have founded funds for old-age pensions and this movement seems to be growing in the country. Cities have pension funds for policemen, firemen, and to some extent for teachers. The nation and the states have made the old age of veterans comfortable. It is perfectly clear that the common laborers of cities can never on present wages provide for old age without help of employers and the public; the outlook is simply hopeless.

Various are the methods of providing funeral funds and life insurance. The poorest workmen of America count among their most necessary expenses the premiums which will provide money for a respectable funeral. Sickness and accident insurance come later, and the contingency of need in old age is to their imagination far more remote. The colossal sums poured annually from slender incomes into the coffers of the "industrial insurance" companies are witness of the spirit of sacrifice which is inspired by the sentiment of repugnance to burial at public expense. The benefit departments of the fraternal societies and fraternal insurance societies prove the interest of skilled artisans in providing for future wants by insurance.

Comparatively little has been done for unemployment insurance. Apart from occasional gifts of cities, or hastily planned emergency

works, the public has manifested no interest in this burning question.

232. SOME ASPECTS OF THE MINIMUM WAGE

The principle of the minimum wage has been accepted by at least nine of our state legislatures and provision made for the regulation of the wages of women and minors employed. Massachusetts led the way by adopting an emasculated measure in 1912. Wisconsin, Minnesota, Washington, Oregon, California, Colorado, Nebraska, and Utah have followed in 1913-all of these adopting laws for the authoritative fixation and enforcement of minimum standards. Though they have acted adversely or adjourned without action, the legislatures of several other states, among them Illinois, New York, Pennsylvania, Ohio, Kansas, Missouri, and Tennessee, have had similar measures under consideration. The minimum-wage movement is making great headway, and, unless checked by the courts or found undesirable in practice, seems destined to become fairly general in the United States.

Speaking generally, the minimum-wage laws would make a "living wage" a first charge upon the industries brought under regulation, special cases excepted. They contemplate the imposition of a standard rate or of standard rates like those established by collective agreements between employers and labor unions, except that in this particular case the minimum established for adults is based upon the necessary cost of living of the individual of a kind that will safeguard health and morals. For the young and inexperienced, for learners and apprentices, suitable standards shall be imposed. The expectation usually is that this will be done so far as possible by a method not far removed from collective bargaining, the three parties to the matter-employers, employees, and the public-being represented.

Though the first of our American minimum-wage laws are just now going into effect, the world has had seventeen years' experience in such regulation. It began in Australia in the state of Victoria in 1896, and has since become fairly general as regards both men and women in most of the other states of that country. In view of foreign experience and general considerations, what are likely to be the results of our legislation? What will it accomplish? What new problems

1 Adapted by permission from H. A. Millis, "Some Aspects of the Minimum Wage," Journal of Political Economy, XXII (1914), 132-53.

will the attempt to solve the problem of low wages probably raise? Is it wise legislation so far as it goes? If so, are additional measures called for to supplement it? If not, where shall we look for a solution. of the serious problem of low wages?

The first result to be expected is that the formation of wages boards will bring about a certain amount of organization of the employees in the trades regulated.

The second and perhaps the most important result will be that wages will be standardized to an extent, and exploitation by unscrupulous employers will be checked.

A third result will be a leveling up of wages in the regulated trades.

A fourth result will probably be that some of those who are now earning more than a living wage on a time basis will have their wages reduced. The union rate has had that effect; some of those of more than average efficiency have been sacrificed to an extent.

As a fifth result, various petty abuses by the less scrupulous employers will be checked, such as exacting payment for this, that, and the other thing-drinking-water in the mills at Lawrence, Massachusetts, for example-and the imposition of arbitrary and exorbitant fines. The methods of the better employers will be imposed to a considerable extent upon others.

As a sixth result, business will be injured at certain points. Home work will be curtailed, for its chief advantage is found in the fact that the labor supply is obtained for less than is paid in factories and shops. Likewise, those employers whose business is poorly managed or whose methods are antiquated will suffer loss unless they can overcome the handicaps under which they labor. The net result will be that the more efficient firms and the more efficient forms of organization will gain at the expense of the less efficient when the subsidy of cheap labor is denied the latter. Though this will work a certain amount of hardship, it is improper to subsidize inefficient management and antiquated methods at the expense of the health and efficiency of the employees.

As a seventh result, this legislation, being confined to certain states, may be expected to depress the industries of the regulated localities and build up those of other localities where such regulation does not obtain, in so far as competition is effective beyond state boundaries. Such has been the effect of the regulation of the hours of labor and of child-labor legislation.