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Published by WORKERS PARTY 


Set up, printed and bound by union labor 

Published by the Workers Party 
114 West 14th Street 
New York 11, N, Y. 


Set up, printed and bound by union labor 

Published by the Workers Party 
114 West 14th Street 
New York 11, N. Y. 


A Big Business Plot 

The big drive to put over a new form of the piece- 
work-speedup system known as "incentive pay" was 
launched a long time ago. This campaign was launched 
by a combination of Big Business, the Administration, the 
yellow boss press, some reactionary misleaders of labor 
and, finally, by its most vigorous advocate, the Stalinist 
Communist Party. 

The real significance of incentive pay, however, was 
made clear when, on September 5, 1943, the New York 
Times published prominently a letter in support of this 
new scheme to cheat the American workers, written by 
Mr. Albert Ramond, present head of the Bedaux' Com- 
pany, industrial engineers, the notorious speedup and 
wage-cutting expert. On the same day, The Worker, or- 
gan of the Communist Party, carried a long article by its 
leader similarly advocating the nation-wide adoption of 
the incentive pay scheme. 

Under conditions created by the war, productivity has 
risen enormously. This rise in productivity, while greatly 
intensified since 1939, reflects the general tendency in 
American production over the past forty years. Techno- 
logical improvements were accompanied by arise in the 
productivity of each individual worker. But neither the 
individual worker, nor the working class as a whole, has 
really enjoyed the fruits of this tremendous rise in labor 

On the contrary, wages of the American workers have 
always lagged behind increased productivity. In the pres- 


1 N C E N T I V E PAV 

ent period of war production and increased productivity, 
wages of the workers have been frozen by President Roose- 
velt's "hold-the-line" order. 

_ The American capitalists, that is, the financiers, indus- 
trialists, great merchants, brokers and contractors, mine 
operators and mill owners, and the rich farmers allied 
with the capitalists, are the ones who are really profiting 
by the present-day economic activity caused by war needs. 
Profits of Big Business are so great that, despite the 
highest taxes in American history, they have exceeded 
the prosperity period of the Twenties and the boom year 
of 1929. Profits for the year 1943 are at the rate of $8,600,- 
000,000, or twice the profits of 1939. Here are some of the 

Year After Taxes 

I94I — — 87,100,000.000 

'91 2 7,100,000,000 

in,j3 (estimated) 8,300,000,000 

Recent Same Pet. 

Company i m Period 1042 Period Inn: 

Erie Railroad Co ; $14,339,524 $7,853,731 8a .6 

Outboard Marine & Mfg 518,34a 23,453 2,110.1 

Continental Motors Corp 5.472,884 ,3.231.724 (10.4 

Consolidated Aircraft 10.3a3.77g 8,024,882 28.6 

Vultee Aircraft, Inc. 4,21)1,140 3,100,735 38.4 

Atlantic, Gulf & West Indies 3,5575,471 2,816,177 . 26.9 

Briggs & Stratum Corp 1,738,898 1,154,759 54.4 

Pennsylvania Railroad 101,408,793 58,073,579 74.9 

Wisconsin Electric Power 3,894,027 '2,851,335 36.3 

Paramount Pictures, Inc 14,525,000 10,251,242 41.7 

Pressed Steel Car Co 1,728,726 812,258 112.7 

Climax Molybdenum Co. .. 13,390,433 8,954,204 49.5 

Dresser Industries .._ 518,007 299,692 73.8 

Consolidated Cement Corp 333, ^97 Sfi.392 286.8 

Consolidated Coal Co., Inc. .._ 1,531,498 702,344 117.1 

Pullman Co. 9,150,769 1,855,069 393^3 

U. S. Freight Co. 1,418,593 808,616 75.4 

Kansas City Southern Railway ............ s . 121,784 1426,188 48.7 

These profits of Big Business are only part of the 
story. Big Business protects itself with "contingency" 
funds, reserves, depreciation, bonuses and sky-high sala- 
ries to its officials. The following figures reveal this clearly; 

Camjiany Executive 

American Locomotive Co. 

Armour & Co. ....; 

Aviation Corp. _ _.... 

Biulil Wheel Co, 

Burlington Mills, Inc. 

Canada Dry Ginger Ale, Inc. R 

Doehler Die Casting o 

Electric .Storage Batter;' Co. 

Fairbanks-Morse fe Co 

Firestone Tire & Rubber Co 
Flintkote Co 

Ditkeiiuan . 
A. Eastwood 


G. Bmld 

J. Spencer Love 
W. Moore ... 
.-II. H. Doehler .. 
...R. C. Norberg .... 

-R. H. Morse 

J. W. Thomas .. 
I. J. Harvey, Jr. 


- -74.378 
. 25,000 

1 10428 

■ 0'.!)1° 

- 47.747 
. 42,883 

■ yi.937 

General American Transp. Corp. L. N. Selig' 

Goodyear Tire St Rubber Co E. J. Thomas - 91,937 

Kennecott Copper Co E. T. Statmard ..-101,820 

J. R. Kinney, Inc G. L. Smith 23,(100 

Lima Locomotive Works Co J. E. Dixon 31,680 

Loews, Inc _ L. B. Mayer 697,048 

Munsingwear, Inc E. L. Olrich 27,886 

J. C. Penney Co. A. W. Hughes 47,975 

Phelps Dodge Corp L. S. Catcs . 

Savage Arms Co F. F. Hickev 

Snider Packing Corp. S. E. Comsloct; .. 

Standard Oil Co. (Ohio) W. T. Hollidav ... 

Swift & Co j. Holmes .'..... 

Union Bag & Paper Co A. S. Calder 

Vick Chemical Co JH. S. Richardson 

Walworth Ct W. 15. Hohon, fi 

Willys-Overland Motors Co J. W. Frazer ...1. 

... 32,010 
... 22,000 

... 1)0,000 

..- 65,000 




Si 14,091 














.'9.5 "885 


Thus, in contrast to the frozen wages of the workers, 
we witness the growth of war profiteers and the rise of a 
new group of war millionaires. 

; -''Equality of sacrifice" has become the greatest domes- 
tie joke of the war. There has been no ceiling on -profits, 
no limits on salaries, no bar to war profiteering and no 
halt to the growth of the war millionaires. 

i N C E N T I V F. 



The workers are paying double for this profiteering 
heyday of Big Business. First, profits are being made 
directly from the labor of the American workers. Sec- 
ondly, war production has already resulted in the great- 
est national debt in American history, greater than the 
national debt of any other country, and the burden will 
have to be borne not only by this generation of the peo- 
ple, but by future generations. 

However, not satisfied with its current high profits, 
greedy Big Business is busily engaged in mapping out 
new plans to increase even more the highest profits in its 

There is one important way open to them "now: raise 
still higher the great productivity of American labor. To 
do this, Big Business is ready to throw a sop to the worker 
by offering a slight increase in wages for an enormous in- 
crease in production which could have only one result, a 
corresponding enormous increase in their profits. 

Knowing how deeply the workers hate the piecework 
system, speedup schemes, and other inventions of the 
bosses to exploit labor more intensely, these overlords of 
the people have advanced the scheme of "incentive pay." 

The Roosevelt Administration says that wage increases 
will cause inflation because there are not enough con- 
sumer goods available on the market, due to war produc- 
tion. Therefore, wages must be frozen. Inflation, you see, 
can be caused only by "excessive" earnings of labor! 

Big Business declares that, since wages have been 
frozen, it cannot grant any direct wage increases. 

The Administration, however, has joined hands with 
the bosses in announcing that, by increasing production 
over the present rate, Big Business may grant more wages 
to the workers. This would not be a wage increase, be- 
• cause there would be more goods produced, and, if the 
workers are properly speeded up, there will be no in- 


crease in the costs of production (on the contrary, they 
would decline), to necessitate a rise in prices. 

This does not make much sense to the worker. He 
knows that there are cases when the government has per- 
mitted wage increases and supported such increases by a 
rise in prices. He knows too thai mo,s* of the goods pro- 
duced today are war goods. But he does not understand 
how an increase in the production of war goods, resulting 
in an increase in his wages, would halt inflation, since the 
net result of his harder work will not have increased the 
amount of consumer goods. These will remain the same, 
yet his wages will be slightly increased if he accepts the 
incentive pay scheme. It would seem that the danger of 
inflation under such circumstances would also be in- 
creased. The situation immedately becomes clear: the po- 
sition of the Administration is phony! 

There is only one real purpose behind the drive for 
incentive pay: To increase the present high profits of Big 
Business and lay the groundwork for a destruction of the 
victory of American labor over the. piecework system, 
bonus-payment schemes, speedups of every variety, and 
other plans for intensifying the exploitation of the 


The Origin of Incentive Pay 

It was originally believed that the idea of incentive 
pay was thought up and proposed by the War Production 
Board and Donald M. Nelson, its director. As a matter 
of fact, however, incentive pay schemes are rather old, and 
Big Business has used them in various ways for many 

The present incentive pay scheme also originated with 


I N C E N Tl V E I' A Y 

Big Business and while if. is actually another form of the 
piecework system, it is dressed up to give it another ap- 

The champions of incentive pay, as we have already 
indicated, are Big Business, Government agencies, the boss 
press, and their dupes and aides in the labor movement. 
Big Business first proposed it; Roosevelt, the WPB and 
the WLB took it up. The business organizations began 
to propagandize for it. Some unions under the control 
of the Stalinists have accepted incentive pay and are ex- 
perimenting with it. 

The aim of the anti-labor forces is simple. Aware that 
the workers are highly suspicious of piecework, speedup 
schemes and bogus bonus plans, industry offers them in- 
centive pay— a little more pay for a great deal more pro- 

Under the piecework system, the boss dealt with an 
individual worker. But the idea of incentive pay is that it 
shall apply on a group, sectional or departmental basis. 

Thus, under the piecework system (which was a form 
of incentive pay), a worker who succeeded in increasing 
his rate for the item produced, on the theory that if his 
earned a little more money than his fellow workers. While 
his increased pay did not compare to his increased pro- 
ductivity—which only enriched die boss— he was, never- 
theless, a little more satisfied because he received a little 
more money. 

The worker soon learned, however, that as he speeded 
up and earned a little more money, the boss would cut 
his rate for the item produced on the theory that if his 
new productivity rate was now his normal speed, then the 
piecework rate should be cut. Why should he pay a higher 
rate when the worker proved that he could produce faster 
if he drove himself hard enough? reasoned the profit- 
hungry boss. 

This is what always occurred under the piecework 


system. Only during the time that the worker produced 
more than the rate set by a certain standard did he receive 
more money. As soon as he demonstrated that his new 
speed had become "normal," his pay rate was cut. 

The boss observed that under the piecework system he 
paid what he called a "large" reward, even if only for a 
short time. Moreover, in reducing rates, he was himself 
cutting the worker's wages. Wouldn't it be much better 
if the worker cut his own wages, or if it was made to ap- 
pear that he cut his own wages and, at the same time, 
have the company make additional profits from the in- 
creased productivity of labor? 

This aim is graphically described in an article, "What 
Is Incentive Pay?" by Walter Weiss, which appeared in the 
magazine, The New International. Says this writer: 

A standard time is set for a certain job. If a worker does it in less 
time, the time saved is divided between him and the company, usu- 
ally on a 50-go basis. Suppose that the standard for a certain job is 
two pieces for a ten-hour day and that the pay for this is $5.00. At 
piecework, if a man did four pieces, he would receive § 10.00. Under 
an incentive plan he would divide the extra $5.00 with the company 
and receive S7.50. Doing the standard two pieces he would receive 
Sg.ijo per piece. Doing four pieces he_would receive only $1.88 per 
piece. To make Jio.oo he would have to do six pieces, and this 
would reduce his rate per piece to $1.67. Of course, his hourly pay 
would increase, but not in proportion to his increased productivity. 

While the bosses do not now propose anything quite 
so raw as this, what they do propose is raw enough, since 
the same principle is involved. Present incentive pay 
schemes hold that; for example, if eighty pieces are stand- 
ard in an eight-hour day, and a hundred pieces are pro- 
duced by a group, or department, thus making a twenty- 
five per cent increase in production, the bonus shall also 
be twenty-live per cent. 

The most extreme form of incentive pay, however, is 
the one proposed by Mr. Albert Ramond, of the Bedaux 
Company, which would give the workers a ten per cent 




10 INC K N T I V E V A Y 

increase in pay for every twenty-nine per cent increase in 
production. It is likely that where incentive pay is in ef- 
fect some middle scheme will operate to begin with. 

Thus we see mixed up in incentive pay proposals, also 
part of the piecework principle. The reason for this is 
that the bosses, fearful of the wrath of the workers, are 
not yet ready to try a full-fledged wage-cutting and rate- 
cutting program. 

What does this group incentive pay scheme really 
mean? Since increased pay will depend on increased group 
productivity, the workers themselves will push the slower 
workers. That is, the speedup, to meet and surpass the 
standards set by management, in order to earn more 
money, will find workers egging each other on, pushing 
each other in a mad race to get this little extra money. 
"A 'fast' man (who might be a company stooge)," as David 
Coolidge so cleai-ly points out in a recent issue of Labor 

Action, "would set the pace Then the various units 

or departments would be hurled into competition with 
each other." 

Who would gain from this mad speedup? Not only 
the workers, who would be the only ones responsible for 
the increase in production, but the bosses, too, who had 
nothing whatever to do with this rise in productivity! 
Business Week, speaking of this new incentive pay scheme, 
said that "whenever a plant's output per man rises by a 
given per cent, the pay, but not the wage rate, of every- 
one in the plant, from sweeper to president, will be in- 
creased by the same per cent." 

In other words, management would benefit doubly by 
the extra sweat of labor, first, from the increased produc- 
tion, which would give it added profits, and then again 
from the reward to which the workers would be entitled 
in full but which the management, without contributing 
one bead of sweat, would share. 

No responsibility will rest on management or the gov- 

INCE N T I V E I' A Y 1 1 

eminent bureaus for any increase in the productivity of 
the workers under the incentive pay scheme. They will 
not contribute a thing to it—in actual work. Yet manage- 
ment will get part of the reward, which, at least, in sim- 
ple justice, belongs to the workers. 

And if the scheme fails, that is, if the group or depart- 
ment does not reach the heights in production indicated 
by the bosses? Only the workers will be held responsible. 
Under the group plan of incentive pay, they would get 
no rate increase, and whatever was produced below the 
level laid down by the company, but above previous pro- 
duction levels, wotdd go free to the company! Experience 
big Big Business teaches that there will be a hundred other 
reasons invented by officials for not granting the increases 
due under its provisions. 

The National Association of Manufacturers has al- 
ready declared that incentive pay "base rates should re- 
flect fair wage differentials between jobs based on their 
relationship and relative requirements in terms of skill, 
experience, responsibility, degree of difficulty, application 
and xcorking conditions." 

. It is clear that "skill, experience and responsibility" 
refer to the management and the lion's share of the in- 
creased productivity that it will take. As for the rest, the 
aim is to divide the workers according to their specific 
jobs, destroy wage levels and set the workers in a deadly 
competition against each other. 

Austin M. Fisher, a labor relations consultant for 
about fifty industrial plants, was referred to in the New 
York Times as suggesting that the WLB adopt incentive 
pay. Mr. Fisher admits that: 

"The increase in the weekly 'take home' need not nec- 
essarily be in direct ratio to increased productive effort, 
but may be less than fully equivalent to it." 

Mr. Fisher knows what he is talking about. He speaks 
the same language as Mr. Ramond. But here is another 


plan now worked out as a "model," by the Grumman Air- 
craft Engineering Corporation. While this plan cannot 
be adopted in detail by other industries, the general 
scheme of this type of wage increase in relation to in- 
creased production is heartily endorsed by all of Big Busi- 
ness and corresponds to the views of Mr. Fisher and Mr. 

Per Cent In- 

Per Cent In- 

crease in Output 

crease in Pay 


















37!/ 2 



More than 1 00 

No further increase 

It is to be noted that up to a sixty per cent increase in 
production, the workers will receive only a one-half in- 
crease in pay. From sixty to a hundred per cent increase 
in production, the workers will get much less than a half 
increase in pay. But for over a hundred per cent increase 
in production, the workers will get no further increase! 

There is the whole scheme in a nutshell! The workers 
will not necessarily get the full -amount of money war- 
ranted under the fraudulent scheme of incentive pay. You 
can bet your boots on it; management will do everything 
within its power to see to it that the workers are cheated 
under incentive pay as they are under any other scheme 
designed to increase production. 



That incentive pay is an old scheme "to get labor to 
work harder, faster and longer hours" is borne out by the 
NAM when it declares: 

"It must be recognized that for any incentive plan to 
produce results there must be no limitation of output of 
the individual workers, and this must be agreed to by the 

Isn't this conclusive proof that what Big Business has 
in mind is the complete destruction of the labor move- 
ment and the conditions of the workers'in industry? 

In order further to make clear their attitude on pay 
rates, the NAM spokesman for industry adds: 

"Management, on its part, must agree that after a 
standard is established, the standard will remain un- 
changed unless there has been a change in equipment, 
work specifications, in method, design or in other con- 
trolling conditions." 

They could not be more frank! All the avenues are 
paved through which the bosses will break any agreemeyit 
made with the workers for pay increases resulting from 
increased production, in order to closely pattern the 
scheme of piecework: reducing rates as productivity in- 


Labor and Incentive Pay 

The rank and file of the labor movement is opposed 
to incentive pay. With unerring instinct, it recognizes this 
new scheme for what it is worth: another plan to more 
effectively exploit the workers, to speed them up, to force 
bitter competition between them, in which some workers 
may get a few cents more, but must in the end result in 
an enormous increase in the profits of the bosses. 



As important as the above is, they also recognize in it 
the basis for destroying wage rates, minimum pay, condi- 
tions of work and the lengt-h of the working day and week. 
And finally they see in the incentive pay scheme a direct 
threat to the unionization of all workers, as well as the 
existing trade union movement. 

This healthy attitude of the union rank and hie does 
not hold true for its leadership. The labor officialdom 
blows hot and cold on the issue of incentive pay. While 
it pretends to recognize all its clangers, it is in a dilemma. 
Having surrendered the right to strike, labor's one great 
weapon for winning and enforcing its demands; having 
accepted the President's hold-the-line order which has 
frozen wages; having accepted the "Little Steal Formula"; 
and having agreed to remain on the infamous War Labor 
Board while that body rejects wage increase after wage 
increase, it does not know what to do about getting wage 
increases for the workers. 

The cost of living is entirely out of line with the wages 
of the workers. The price control program of the Admin- 
istration is the biggest domestic farce of the war. Yet the 
labor officialdom dares not fight for wage increases. Thus 
its only conclusion can be the hope that the passage of 
time will force the workers to accept incentive pay as the 
only means open to them for a wage increase. This is the 
greatest danger in the wage situation. But it is a danger 
for which the labor officialdom is completely and person- 
ally responsible. 

Spearheading the opposition to incentive pay is the 
United Automobile Workers of America. This great 
union has had the issue before it many times. Each time 
that the Stalinist finks and their spokesmen for incentive 
pay, Richard Frankensteen and George Addes, have tried 
to force through its acceptance, they were defeated. 

Where the UAW experimented with an incentive pay 
scheme, as in the Detroit Murray Body Local, it has had 

I N C £ N T I V E P A Y if, 

bitter experiences. The Murray Local has since declared 
its wish to rescind the agreement, to carry through the ex- 

The workers at Carnegie-Illinois Steel, Republic Air- 
craft and Wright Motors in Paterson, have all fought in- 
centive pay schemes enforced in these shops because they 
found themselves repeatedly cheated by the companies. 

Yd, while the UAW locals are fighting fiercely against 
the enforcement of incentive pay, the president of the 
CIO, Philip Murray, has announced that his union, the 
United Steel Workers of America, will adopt a form of 
incentive pay. This, of course, relieves him temporarily 
of the job of fighting for wage increases for the workers 
under his jurisdiction. Thus the leader of the CIO is 
playing a most disastrous role in the, present principled 
struggle between labor and the bosses. 


Role of Stalinist Union-Wreckers 

By far the most dangerous clement in this situation is 
. the Stalinist Communist Party and the unions it controls. 
These wreckers of the union movement concern themselves 
primarily with the second front and other questions of in- 
terest to Stalin's foreign policy. Keeping labor docile and 
tied to the wai machine and to the production of profits 
for Big Business is the chief activity of unions under Sta- 
linist leadership. The vital issues which concern the wel- 
fare of the American working class are cast aside because 
they conflict with the interests of the Russian bureaucracy. 

Earl Browder, leader of the American Stalinists, is the 
outstanding propagandist for the bosses on the incentive 
pay issue. When he intervened directly in the UAW dis- 




pute on this subject he was soundly rebuked by that or- 
ganization for his union-wrecking role. 

Browder argues that incentive pay will increase the 
wages of the workers and that only the bosses are opposed 
to the scheme. Knowing full well what incentive pay 
really means, but pretending that Big Business is opposed 
to it because it might have to pay a little more for a great 
deal more profit, Broxuder says it is the duty of the work- 
ers "to force better profits on unwilling employers." One 
would think that the employers have only to wait for 
word from Broxuder that the pickings in the incentive pay 
scheme arc good. But really, they are not so shy as Brow- 
der would have the workers believe— and, it goes without 
saying, a thousand times more honest than this new lackey 
of Wall Street. 

Why, then, do the Stalinists fight so vigorously for 
incentive pay? Are they concerned with the desire of the 
workers to get more money? This is nonsense. The Amer- 
ican Stalinists, acting for the Kremlin tyranny, are Rus- 
sian nationalist agents. Their sole interest is the preserva- 
tion of the rule of Stalin and the new bureaucratic class 
which lives oil the exploitation of the Russian workers. 

When Stalin was allied with Hitler, Browder and his 
cohorts were on the side of the Axis in the war. They were 
not in the least concerned with production. On the con- 
trary, they were interested in keeping production at a 
minimum. Incentive pay was farthest from the minds of 
these American representatives of Stalin. 

But when the two dictators broke their friendship, 
when Hitler's legions invaded Russia and that country 
became the ally of England and later of the United States, 
the American Stalinists became super-patriots. Now, noth- 
ing that the workers do is enough. No sacrifice of Amer- 
ican labor is great enough. 

Are American workers producing vast quantities of 



goods? It is not enough. Is the American ruling class 
sending aid to Stalin? No matter, it must send more. 

Are Browder and his party concerned with the lot of 
the American workers? Not at all. According to their 
views, the American working class and the working class 
of the entire world must sacrifice everything for Stalin's 
rule over Russia. 

Doesn't this sound contradictory? Not at all. What 
Browder demands of the American workers, Stalin takes 
from the Russian. Russia, under Stalin, has become a vast 
prison for the Russian working class. 

The Russian workers have lost their independence, 
their free trade unions, their other organizations, and 
their rights. They are driven like a herd under a vicious 
speedup system. There have been no wage increases for 
them since the -war broke out, and they work a twelve- 
hour day seven days a week. Stalin lias borrowed the worst 
from the American efficiency experts and applied it to the 
Russian workers. 

Rtissia has its oxvn variation of the piecework system 
and incentive pay. It is called "Stakhanovism." Those 
participating are "Stakhanovites." They are special work- 
ers who set the pace for all other workers. They are the 
finks in the factories, the type^ of men whom American 
workers \rould drive out of the shops and the unions. 

Even so friendly an observer of Russian affairs as Wen- 
dell L. Willkie was compelled to write, on his return from 
a visit to Russia: 

"The Stakhanovites, strange as it may seen to us, are 
actually pieceworkers, paid. at a progressively increasing 
rate on a speedup system which is like an accelerated Be- 
daux system. The Russian industrial system is a strange 
paying labor loould satisfy our most unsocial industri- 

If you understand the significance of this, you can un- 


demand why Browder carries on as he does. He is a Rus- 
sian patriot. That is why he is in favor of incentive pay, in 
favor of any scheme which will destroy the effectiveness 
of the American labor movement, so long as it serves the 
interests of the Stalinist dictatorship. 

What is wrong with incentive pay? Only one thing, 
according to Browder. And that is the "tendency" to cut 
rates. Browder says: "This tendency of the manufac- 
turers to cut rates arbitrarily destroys, of course, the very 
foundation of the incentive pay system." 

What Browder fails to tell the workers is that the "ten- 
dency cut rates arbitrarily" is the basic foundation 
of incentive pay and the reason why it originated with Big 
Business and has its unqualified endorsement. 

Browder is trying to picture incentive pay for what, it is 
not, namely, a means by which wages rise. An increase in 
wages, however, is only incidental to the plan. Incentive 
pay, as the bosses correctly understand, is a specialized 
scheme for increasing production through a speedup sys- 
tem which must increase profits and reduce the relative 
share of production which falls to the worker. 


Wages and Profits 

Ever since the rise of capitalism there has been a sharp 
struggle between the bosses and the workers over wages. 
From the early days of this system, when machine produc- 
tion was still in its infancy, production and profits have 
depended on the direct exploitation of labor. 

Profits of the capitalist class were based on the long 
working day, the seven-day week and the intense physical 
exploitation of men, women and children. To keep wages 



as low as possible—just enough to permit the working man 
and his family to live and reproduce in kind— meant high 
profits. Wage increases would lower profits. 

Since the capitalist is in business only for profit— he 
does not care whether his product is useful or not— he has 
ever sought to keep wages as low as possible. 

The capitalist and the worker, throughout the exist- 
ence of capitalism, have fought over wages and the con- 
ditions of labor. If the former kept wages low, hours long, 
without investing money to improve the conditions of 
work, he did well and had a profitable business. It mat- 
tered not to him if the workers suffered severely under this 
brutal system. 

The development of technology, which permitted a 
tremendous rise in production and a corresponding rise in 
the productivity of the individual worker, saw a gradual 
rise in wages, a gradual reduction of the work-clay and 
work-week, and a gradual improvement of working con- 

It is a fact of economic history that while the capitalist 
profited from every improvement in production, while his 
wealth mounted, his living standards rose higher and 
higher, his leisure increased manifoldly, and his general 
security was strengthened, the conditions of the working 
man remained, on the whole, far below what was war- 
ranted by industrial progress. 

It is also a fact: of economic history that, for every im- 
provement in the lot of the worker, he had to engage in 
heroic and violent struggles against his profiteering boss. 
The capitalist never gave anything to the worker volun- 
tarily. Everything the worker has gained— higher wages, 
shorter hours of work and improved conditions of labor 
—was the result of intense struggle by the working class. 

The bosses have always resisted wage increases because 
the granting of higher wages would come out of their 





profits. Usually they overcame this by increased produc- 
tion or increased prices and new markets. In the end, the 
capitalist saw to it that he lost nothing even in granting 
wage increases; he was always compensated for any con- 
cession which the workers wrung from him by sharp eco- 
nomic and political struggles. 

But most important of all, wages have always lagged 
behind profits. They never rise simultaneously or in the. 
same proportion as profits. It is only after the workers 
observe the increase in profits and life becomes increas- 
ingly unbearable, that they are, willy-nilly, driven to fight 
for a greater share of the xuealth produced by themselves. 

For example, between 1924. and 1929, in the very midst 
of the prosperity period in which Big Business "earned" 
enormous profits, wages, that is, money wages and real 
wages (what they will actually buy of the necessities of life) 
remained stationary. As a matter of fact, wages in this 
period were beloxu the rates of 1920! 

Lewis Corey, in his Decline of American Capitalism, 
vividly describes this situation when he says: 

"Thus, in 1929, relative wages fell to the lowest point 
in American history in the midst of an extraordinary rise 
in the productivity of labor, surplus value, and profits." 

What are called high wages are in reality low when 
compared to the -productivity of labor, and they are low 
in terms of the possibility of still higher wages. 

High wages, so-called, are also low wages in the terms 
of what they can provide in minimum requirements for 
living in a society where millions live in poverty on sub- 
standard wages. 

Wages have always lagged' behind dividends, interest 
and the salaries of officials of companies. As an example, 
between the years 1921 and 1932, toages declined by twen- 
ty-five per cent while dividends and interest rose by fifty- 
five per cent. 

In this discussion of wages and their relation to incen- 
tive pay, it must be borne in mind that even when wages 
rise, they fall in relation to profits; that profits are in- 
creased by forcing down wages and that profits represent ' 
"surplus value, unpaid labor." 

It is possible to say that, as- a rule, during periods of 
prosperity, wages rise, but profits rise much faster, and 
the so-called "high wages" are low compared to the pro- 
ductivity of labor. During crises, profits may fall and do 
fall, but wages fall much lower, and for millions of work- 
ers cease altogether. 

In such periods, the bosses may not get so much, but 
all workers get still Jess and many get nothing. It is the 
worker who becomes unemployed, who is found on the 
breadline, and who needs relief in order to live. The boss 
merely retires to his estates to live on his accumulated 
wealth, produced by labor but appropriated by the capi- 


Unorganized American Workers 

America is the classic land of technological improve- 
ments. As a result of this and the great mechanical skill 
of the American worker, production has always advanced 
rapidly. American labor, foreign-born and native, built 
up the vast industries which cover this country from coast 
to coast. Without this labor, the great railroads would 
never have been built. Without this labor, the great in- 
dustries could never exist. Without this labor, mining, 
textile, oil, transportation and the great automobile and 
machine tool industries would never have been. 

The vast industrial development of this country built 
by the hands of the worker, and the vast wealth created by 


I X C I'. X T I V F. 1" A Y 

labor, went into the. hands of an proportionately ever 
.smaller class of capitalists. Today, Big Business rules su- 
preme over the bent backs of the 'working class. 

The American workers did not enjoy the real fruits of 
their labor. They have little or nothing to show for the 
many decades of their toil, which created a small class of 
rich and idlers. 

In this vast industrial development, Big Business in- 
vented many schemes to add to its wealth. Each of these 
schemes led to a greater exploitation of labor. Of these 
schemes, the piecework system was the most deadly, for it 
aimed at getting more production from the worker in a 
shorter period of time, by promising the individual 
worker, who set a maddening pace in the shop, a little 
more money: ' 

We have experienced Fordism as a system of intense 
exploitation. Many workers remember the propaganda 
that hired magazine writers and journalists poured out, 
extolling Henry Ford because he paid a minimum wage 
that was higher than that paid in other auto factories. 

But many automobile workers remember that Ford's 
was the "young man's factory." They all knew of the mad 
pace which this bigoted industrialist forced upon his 
workers. They also knew that the middle-aged man could 
not stand the physical strain caused by the murderous, 
brutal and inhuman setup at the Ford plants. More- 
over, the productivity of the Ford workers under the mass 
production system was extremely high, much higher than 
in other lactones. 

In proportion to their productivity, then, the workers 
were grossly underpaid by Ford. This was and remains 
true for all industries and for all workers. 

Ford was not alone in practicing speedup in order to 
get more production for less wages. Every great industry, 
and the small ones which imitated them, practiced the 




same or a similar type of speedup or adopted similar sys- 

The workers experienced the wearing physical effects 
of Taylorism and Bedauxism. Time production special- 
ists, efficiency experts, scientific speedup artists and a host 
of other gentlemen operating under the name of "indus- 
trial engineers," invaded the factories for the specific pur- 
pose of driving the workers at a furious pace to produce 
more and more in less and less time. 

There was hardly a factory which did not have a vi- 
cious piecework system calculated to enrich the bosses. 
But the outstanding feature of the piecework system was 
that as you raised your productivity, your rate per piece 
dropped. At the end of a period of time in which you in- 
creased production enormously, you found that your rate 
of pay did not. advance. On the contrary, you found that 
you had been cheated. You increased production , you in- 
creased the profits and wealth of your bosses; but in the 
end you had less to show for it. 

In addition, you had worn yourself out physically; you 
were an old man before your time. The best of your physi- 
cal life was given to increasing the wealth of your boss, 
while you were at the end of your rope, with greater in- 
security as your reward! 

These conditions were possible primarily because 
American labor was unorganized. The worker fought his 
battle as an individual, and he always lost. Arrayed against 
him was not an individual factory owner— though he was 
powerful enough, with all the forces of law, the press, the 
government and wealth on his side—but all factory owners, 
all financiers and industrialists, united in their own or- 

It seemed that Big Business understood better than the 
workers the value and power of organizations. And they 
made good use of the old saying: "In unity there is 






The unorganized workers were at the mercy of indus- 
try. They passed through the prosperity period, created 
by their sweat and blood and muscle, and were cheated of 
their labor, without reward. Big Business and all its allies 
were all the more enriched from the toil of the American 
working class. 

This was the period when there was no hourly wage 
rate, no limit to hours, no limit to the work-week, and no 
control of working conditions for most of the American 


Organized American Workers 

The greatest economic crisis in American and world 
jtory came in 1929. It lasted through the Thirties. The 
\vorking class, having been cheated during the "prosper- 
ity" period, was now to experience hunger, evictions from 
homes, mass unemployment and general suffering. 

The capitalists, while their profits had dropped, con- 
tinued to get large salaries to add to the enormous "re- 
serves" which they had piled up during the Twenties. 

After the first years of the economic crisis, the discon- 
tent of the great mass of the people ripened into great 
struggles. The workers began to demand their just due. 
The nation-wide struggle of unemployed labor led to gov- 
ernment reforms. First came unemployment relief; then 
followed the PWA and the WPA. Artificial jobs created 
by government funds were the result of the sharp battles 
for life waged by labor. 

The working class learned from these struggles. The 
working class began to understand that through organiza- 
tion, class unity and a fighting program, it could better ob- 
tain its demands and defend its economic rights. 


Thus when the first signs of an economic revival ap- 
peared, the workers moved forward toward unionization. 
From 1935 on, union organization was the watchword of 

In those years we witnessed the organization of the 
CIO, which aimed primarily at the mass production indus- 
tries. The CIO grew rapidly in these industries, and by 
its progress smashed the stranglehold which Big Business 
had on the neck of labor. The AFL grew along with the 
CIO. The momentary end of this great organization drive 
of American labor saw the existence of a union movement 
with more than ten million workers. But more important 
even than this growth is the militancy and the will to light 
for their rights which has gripped millions of workers. 
Their unceasing drive forced conservative and backward 
labor leaders to speak militantly also. 

As a result of the. great unionization of millions of 
workers, a gradual improvement took place in the condi- 
tions of labor. The piecework system went -out the win- 
dow. Speedup systems, no matter under what name they 
went, were barred. With united strength, with a dear 
vision of what they wanted, workers gained a minimum 
wage, the right to collective bargaining, grievance com- 
mittees, the shop steward system, and the right to speak 
to the organized bosses with the strength of their own or- 
ganization behind them. 

The workers won these victories only through intense 
struggle and great sacrifice. They won them against, a 
powerful, capitalist class, which has not given up the fight, 
the class of Big Business and all its allies, who mean to 
take away the rights won by labor at the first favorable 

Big Business, through its organizations, the National 
Association of Manufacturers and the Chamber of Com- 
merce of the United States, and through its lackeys in the 
House and the Senate, supported by all reactionaries,' gov- 


at> I N C K N T 1 V E I' A Y 

eminent officials, native fascists and the boss press, the 
servants of advertising, the pen prostitutes and yellow 
journalists, began this drive long ago. The outbreak of 
war gave these dollar pay-triots their opportunity, and 
they have seized it with their customary speed and under- 
standing of their class interests. 


The War and Labor 

Shouting patriotic slogans, calling for "equality of sac- 
rifice," crying for "national unity," Big Business has 
sought to break down every gain made by the workers. 
Why do they do this? Because it will result in greater 
profits for them and assure their power in society. 

One might ask: Aren't these vultures satisfied with the 
profits they are making now, which are the largest in his- 
tory, despite enormous taxes? Obviously not! Why should 
they want to pay a minimum wage? Why should they 
want to pay time and a half for overtime and double time 
for Sundays and holidays? -If Lhey could evade such pay- 
ments, their profits would be even higher. 

What is more, they do not want to deal with the work- 
ers on anything like an equal basis. They want to destroy 
the labor unions, the grievance committees, the shop stew- 
ard system, and the independence of American labor. 
They want to return to the good old clays of the Twenties, 
when they ruled over the workers with an iron hand and 
the policeman's club. 

The workers have already sacrificed more than they 
can afford, since the war broke out. The labor leaders, 
generally without consulting their memberships, gave a 
no-strike pledge to the President. In doing that they sur- 


rendered the strongest and best fighting weapon which 
labor has to defend and extend its interests. 

In exchange for the no-strike pledge, Roosevelt prom- 
ised that there would be no profiteering out of the war 
effort, no new war millionaires, prices would be controlled 
and the cost of living would be cut down. It goes without 
saying that none of these promises has been kept. 

What have the bosses given up? Their right to lock out 
the workers! But that is silly. Why should they want to 
lock out workers in this period of war profiteering, in 
which they are making their old fortunes bigger, and 
many new fortunes, from government orders? It is to 
their interest to keep industry going at full speed, for this 
insures their continuous and high profits. 

We have already seen how their profits and salaries 
have jumped skyward. Did they perhaps reduce their 
standard of living? On the contrary, they have raised their 
living standards enormously. 

Are they working harder? Do they face bitter compe- 
tition? Is there a heavier demand on their business "ex- 
perience" and "cleverness" to keep operating and pro- 

On the contrary, they have less than ever to do. Every- 
thing is all set for them. They live on government orders, 
on government payments, on profits -which the govern- 
ment guarantees them— all of which in the end will come 
from the toil of the working class. As a matter of fact, 
they do not even have to exert themselves to obtain these 
contracts. The government goes to them! 

Labor has given up too many rights already. Its organ- 
ization campaigns have suffered in the war. Its hours have 
been lengthened. Conditions of labor have worsened. 
Speedup for more war production reigns throughout in- 
dustry. Industrial accidents mount at a terrific rate. 
Wages have been frozen. The cost of living goes higher 
and higher. Food prices have risen above all other prices. 



Living conditions are worse, housing is inadequate, 
especially for war workers, and the quality of consumer 
goods has gone down. On top of all this, a whole series 
of taxes are taking away whatever increase in wages the 
workers have won as a result of the enormous production 
increases demanded by the war. 

Since 1939, the productivity of the workers has again 
risen at a rapid rate, but the workers have not shared in 
this rise in production. Commenting on this fact, the 
AFL declared: 

"The increased productivity for which workers are 
not paid constitutes a tremendous war sacrifice on their 
part, a sacrifice that takes a permanent toll out of their 
work-power. As their capital is their power to work, this 
unpaid labor is in reality a capital levy imposed upon 

What will the workers have to show for all their labors 
at the end of the war? Exactly nothing! Their reserves 
will be few, if any. The nightmare of unemployment will 
stare them in the face. The wage freeze will be ended, but 
there may be little or no wages for millions, and any sur- 
render the workers now make to destroy wage levels will 
wreak havoc with wages after the war. 

It will be the old, old slory all over again: the rich will 
have become richer; tlie poor, poorer. 

I N C E N T I V E 1> A V 



Against Incentive Pay- 
Cost-Plus Wage 

'or a 

Incentive pay is a piecework, speedup scheme to rob 
and cheat the workers. It is a means by which to destroy 
wage levels, the minimum wage, wage equality, and the 
solidarity of labor. It is a means, moreover, to divide the 

workers, destroy their union and class-consciousness by 
, pitting individuals and groups of workers against each 



j But, most important of all, if the workers give in to 

^ the demands of Big Business for incentive pay, it will pave 

1 the way for the destruction of the trade union movement. 

I There never was and never will be a time which can jus- 

J^ tify the weakening and then the destruction of the labor 

movement. To build and strengthen the labor movement 
, is an ever-pressing necessity. It was never more pressing 

than now. One way to strengthen the labor movement is 

by a decisive defeat of the incentive pay scheme. 

As against incentive pay, the labor' movement must 
,' demand a national minimum wage, wage increases and 


* The bosses get their cost-plus. The government not 

only pays them every cost involved in production, but 
' guarantees them a "plus," i.e., a large profit. In addition, 

''> Big Business finds a hundred and one ways to increase 

f costs and profits. 

\ A Cost-Pius Wage is simply the application of this sys- 

l tern to the workers. 


I How? By contracts which provide that wherever and 

"f whenever the cost of living goes up, wages are automati- 

cally increased to cover the increase, PLUS an additional 
1 sum which allows for minimum comforts above a mere 

1' subsistence level. 

; This does not mean that wages cannot increase. Wages 

must continuously increase with the increase in the pro- 

I ductivity of labor, which is constant. 

7"""— A cost-of-living wage means to keep wages down to 

mere bread and butter. But labor must constantly seek to 
raise itself to a higher position in society, until it reaches 

; the highest, tohere it belongs. 

How high should this "plus" be? As high as the' organ- 

S» I N C F. N T I V E I' A Y 

ized strength of the labor movement makes possible in 
each given case. 

Labor must establish and enforce the principle, for 
the present, that its employer, whether a person, a corpora- 
tion or the government, must automatically provide an in- 
crease in wages in accordance with the increase in the cost 
of living— PL US an extra margin of income to take care 
of the modest comforts that labor needs and wants and 
should have, at least for a beginning. 

The labor movement is now thirteen million strong. 
It is the biggest organized force in the country. Properly 
organized and properly directed, there is no other power 
that can withstand it. Properly organized and properly 
directed, it can achieve any one of its legitimate demands. 
A COST-PLUS WAGE is such a legitimate demand. 

Labor needs freedom of action. Right now this giant 
has been shackled by the government and the corpora- 
tions, assisted by the groveling labor leaders, who imposed 
upon the trade unions the shameful no-strike pledge. 

Capital has given no such pledge and does not need 
to give one. It is satisfied with labor's pledge. The harder 
labor works, the higher go the profits of capital— and the 
lower goes the standard of living. 

Labor must regain its right to strike! That is an indis- 
pensable precondition to organizing the fight for a COST- 

This is the answer to the campaign of Big Business, the 
j government and the Stalinists for the robber-scheme of 
i incentive pay. 


The Meaning of Socialism 

By Ernest Lund 

Why This Is an Age of Plenty 
Why There Is Poverty in This Age of Plenty 
Who Controls the Wealth Labor Produces 
What an Equitable Society Is 
Socialism as the Hope of Humanity 
Sixty Pages Ten Cents per Copy 

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