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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
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;
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
J. Spencer Love
W. Moore ...
.-II. H. Doehler ..
...R. C. Norberg ....
-R. H. Morse
J. W. Thomas ..
I. J. Harvey, Jr.
General American Transp. Corp. L. N. Selig' iio.ooo
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.
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
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-
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-
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
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
12 INCENTIVE PAY
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
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-
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.
I N CENTIV E P A Y
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-
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-
INCENTIVE P A Y
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
INCENTIVE I- AY
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
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-
(8 INCENTIVE I' AY
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 ...to 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
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
INCENTIVE I' AY
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-
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
INCEN T I V E I' A Y
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
I N C E NTIVE P A V
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
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.
INCENTIVE PAY sr,
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-
INCENTIV E P A Y 27
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.
*8 INCENTIVE P A V
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
"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-
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
A COST-PLUS WAGE!
* 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.
PLENTY FOR ALL
The Meaning of Socialism
By Ernest Lund
IT TELLS YOU
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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Title: Incentive pay : the speed-up new style /
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