Inflation and the negotiation of wages. Comparative responses to monetary changes in Germany and the United States during the Gold Standard Era, 1876–1926

Abstract

ABSTRACT Negotiations over wages have always been a central part of industrial relations in capitalist economies. The unstable value of money in the 19th and 20th centuries has made these negotiations both crucial and complex. Linking contemporary understandings of monetary values to wage bargaining provides an important historical background for a better understanding of real wage developments and the agency of workers. Adopting a comparative perspective, this paper discusses how managers and workers dealt with changing monetary values in Germany and the United States from the 1870s to the immediate aftermath of the First World War. The paper also discusses the extent to which actors understood the instability of their respective currencies’ purchasing power and whether their perceptions changed over time. The paper reveals that negotiations were never exclusively shaped and guided by concepts such as inflation or the ‘cost of living’ in both countries but that the importance of the concepts changed with the level of price fluctuations and institutional setting. Indices could achieve a dominant role only in exceptional circumstances due to their artificial and contestable nature, their neglect of the complexity of workers’ job contexts and living environments, and their normative implications concerning wage demands.