Annual Wage and Income-Security Plans

Abstract

ANAGEMENT expects a little too much when it asks that labor be loyal and faithful, when it is considered i~i. that labor is the first thing separated from the pay roll when business clouds begin to appear, said Henry L. Nunn, president of the Nunn-Bush Shoe Company, in giving one reason for the adoption of his annual wage plan. He had noted that office personnel is almost invariably loyal and faithful to an organization, while the same could not be said of factory workers. He concluded that there was a good and obvious reason for this. The president of another company which adopted a wageguaranty plan said that it was his conclusion after careful personal inspection in the middle I930's that the strife and discord in Spain were traceable to the insecurity felt by a large portion of the population. He concluded that, if American workmen could experience reasonable job and income continuity, they would not become victims of isms. He decided to make his contribution to the prevention of conditions which lead to disillusionment, despair, and a longing for some new social order. A building contractor who placed all his mechanics on an annual guaranteed wage believed that labor's demand for hourly rates so high as to prevent adequate job opportunities for building craftsmen was directly traceable to a scarcity of job opportunity. He concluded that a wage guaranty would destroy the factors which prevented adequate annual income for his employees. Numerous other employers in the last six or seven years have adopted some form of annual wage plan for factory workers. The foregoing explanations for the adoption of such plans were instrumental, with due variation, in moving these employers to abandon traditional methods of wage payment for part or all of their employees and to substitute some form of income assurance.