Front Page Titles (by Subject) LESSON III. Starvation Wages - The A B C of Finance
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LESSON III. Starvation Wages - Simon Newcomb, The A B C of Finance 
The ABC of Finance: or, the Money and Labor Questions Familiarly Explained to Common People in Short and Easy Lessons (New York: Harper and Bros. 1877).
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A few weeks ago it was said that several railroads of the country lowered the wages of their men to the starvation point. Now, I confess that I do not know what the "starvation point" is, and so cannot say whether this is true or not; but I will remark, in passing, that there has been within the past year or two a great fall in the price of nearly everything necessary to the laborer's comfort; and that starvation wages will buy a great deal more than they would two or three years ago. Possibly if the railroad employés had devoted half the exertion to getting cheap food and clothing which they have devoted to prevent a fall of wages, they would find that their starvation wages would secure them as many of the comforts of life as the higher wages of two or three years ago did. But we need not stop to discuss whether this is so or not. We must pass only to some further considerations. The men were not satisfied with their wages, and refused to run the trains. Now, if the reduction of the wages was really unnecessary and unjustifiable, the men were quite right in thus refusing to work, provided that they did not seek to interfere with the rights or with the property of any one else. But the fact was, that there were a large number of other men, whom we will call Jones, and Brown, and so on, quite ready to take the places of those who would not work, and to run the trains for those starvation wages. They had a perfect right thus to accept the best employment they could get, and the road had an equal right to employ them. But the strikers drove them off, refusing even to let them have this poor opportunity to earn a little to keep their families from starving. Now, what does this show? Why, the very fact that Brown and Jones were willing to enter the service of the roads at those starvation wages shows that they could not get even those wages at other employments. They were either absolutely out of employment, or were working for something below the limit which the companies set, or else they would not be willing to enter their service under the circumstances. Thus the strikers by their action prevented these unfortunate men from even earning the miserable pittance for which they themselves refused to work. You think, perhaps, that the companies ought not only to have paid higher wages to those who were actually running their trains, but also to have taken a number of these starving Joneses and Browns in, in order to help them. But the means of the companies are necessarily limited. A company gets only a certain number of dollars from passengers and freight with which to pay its employés, and it cannot pay out more than this amount for any purpose whatever, any more than two and two can make five.
We all know that the gross receipts of nearly every railway in the country have greatly diminished during the past five years. It is therefore simply impossible to run the roads without cutting down the wages of some one. The very fact that there were so many poor fellows ready to run the trains at the diminished wages, because there was nothing else for them to do, seems to me to prove that there was no entirely unjustifiable reduction. I confess I do not think those who wish for the improvement of the laboring class should have anything like as much sympathy with the strikers as they should have with those poor men unable to earn the pittance of perhaps ninety cents a day. In interfering with their employment, the strikers showed themselves in the light of cruel tyrants, regardless of those laws of freedom and property which have been the means of keeping them from serfdom.
I must not be understood as seeking to justify the general management of the railroads during the last ten years, or as claiming that the men had no reasonable ground of complaint. Every one who has the cause of humanity at heart must hope for the time when there will be more sympathy between the laborer and his employer, and when the latter will look on the former as one in whose happiness he has an interest. But improvements like this go on very, very slowly, so that no one generation can ever see them brought about, and any attempt to hurry them only keeps them back. Sympathy and good feeling are not promoted by war of any kind, and least of all by a war like that of the railroad men against law, order, and civilization generally. However bad railroad managers in general may be, in this particular case they were in the right and the others in the wrong.
There is one very important feature of strikes and labor movements generally which people seldom notice, but which should seriously modify our opinions of them. We are apt to think of all these movements as made for the benefit of the great masses of unskilled laborers, or, at least, as being planned and executed by them. A very little reflection upon facts which we all know will show us that this is an entire mistake, and that strikes of the most numerous class of laborers—the unskilled ones—are rare and unimportant. In the late railway war, it was not the men willing to work for ninety cents a day who struck, but engineers and firemen possessed of such skill that they could, in ordinary times, earn more than was sufficient for their support, and belonging to an association which was boasted to command millions of dollars. All the other strikes of which we have so often heard have been by miners, bricklayers, masons, carpenters, hatters, and so on, but not by day-laborers. Now, this last is the class which should most command the sympathy of the philanthropist, because it is the most helpless class; but it is the very one against which the rules and customs of trades-unions operate most vigorously. The higher classes can take care of themselves, but these cannot so easily do so.
The worst part of the policy of trades-unions is that which seeks to limit the number of men who shall be allowed to learn a trade. Not only are vast numbers of men thus compelled to remain day-laborers who might otherwise attain skill in some trade, but all the articles which skilled labor produces are made scarcer. If these articles were used only by men of wealth, the men who sympathize with the laborer would not so much care. But such is not the case. It is mathematically certain that laborers cannot have more house-room than they now have till more houses are built for them, and this cannot be done without more bricklayers, carpenters, plasterers, and so on. The same remark will apply to nearly everything which the laborer needs to live in comfort. Skilled labor is necessary to produce it, and many skilled laborers are banded together to make their work as scarce and dear as possible.
There is one important lesson to be learned from all this. The progress of humanity from the time when the laborer was little better than a serf, living in a smoky cabin with its thatched roof and unwholesome air, eating black bread, and going to his work barefoot, up to the present, when the industry of a continent is at work supplying his wants, has been very slow and gradual. This course of progress has always encountered enemies more or less effective. But the worst and most destructive enemy it has ever encountered is to be found in those trades-unions which have been engaged in saving up money from the laborers' earnings in order, from time to time, to wage wars against production through strikes. That a certain small proportion of these movements may have been justifiable I do not deny; but the larger number of them have been carried through at the expense of an amount of privation, misery, and even death, as well as of injury to the productive power of the country, for which no good trades-unions have ever done can compensate. However we may admire the heroism of the men engaged, we must not forget that their war has generally been waged against the very instrumentalities designed to feed, clothe, and shelter them.
To proceed further with these questions, we must know something of the nature and functions of money. Here we come into a field where it is almost as necessary to unlearn as it is to learn. There are two entirely groundless ideas prevalent respecting the value of money, which have no more real foundations than the notions about witchcraft which prevailed a couple of centuries ago, and on which a large part of the fallacies of the subject is founded. Until these ideas are, so to speak, unlearned, no progress is possible.