Machines in Office. A Call to Clerical Workers

Office staffs in all branches of commerce and industry are now finding themselves faced with reductions in pay. In nearly every instance the employers, when “informing” the staff of salary revisions (as the General Manager of the Midland Bank told the Royal Commission on the Civil Service, the Bank Board does not discuss wages with the staff, it “informs them of its decision”), give the excuse that the reductions are only reasonable adjustments to a lower cost of living, so that the real standard of salaries is not being impaired. Clerical workers, while far from satisfied that a reduced salary in 1931 will go as far as a larger salary in 1929, with the docility for which they are infamous, and with a fatalistic resignation, assume that perhaps there has to be a reduction in their pay it trade is to improve. Does it ever occur to them to consider whether the “reduction-to-meet-the-fall-in-prices” sauce that is served for the goose, salaries, is also served for the gander, dividends ? In the world of banking, at any rate, it is not.

Recently there has been much talk of the need to reduce the pay of bank clerks “in order to meet changed conditions.” The lead has been taken by the Midland Bank, Ltd., which has revised its scales of pay for new entrants. Formerly a clerk in London after ten years’ service received £240 a year if he was on the maximum scale. By the fifteenth year his pay had risen automatically to £370. Beyond that point further increases were at the discretion of the directors. Under the new scale a new entrant will receive, at the most, only £205 after ten years, and at this point automatic rises cease. Other banks are following suit.

Now what about dividends? Here directors and their Press are strangely silent about falling costs of living. All of the “Big Five” banks (except Lloyds, which reduced dividends from 16 2/3 per cent. to 15 per cent.) paid the same dividend in 1930 as in 1929. But, according to Mr. McKenna, of the Midland Bank, the purchasing power of money in 1930 was 19 per cent. higher than in 1929, owing to the fall in prices. From which it follows that the shareholders received a 19 per cent. increase in real dividends in 1930, and even Lloyds’ shareholders were 2 per cent. better off than in the previous year. To this maintenance of dividends, side by side with a reduction in salaries to meet lower prices, the remark of Sir Frederick Lewis, Bt., when proposing a hearty vole of thanks to the staff of Barclays Bank, comes as a nicelv ironic pendant. Sir Frederick, who, by the way, manages to direct the affairs of a mere 32 companies, was filled with love and admiration for the staff, but unfortunately “the only method they had of recording their appreciation was the passing of the resolution he had the honour to propose” (Times, January 21st, 1931). Needless to say, as votes of thanks, be they never so hearty, do not cut into profits, the shareholders passed the vote with enthusiasm.

On the face of it, the reduction in pay of clerical workers may look like an adjustment to lower price levels, as the employers say that it is. In fact, it is something much more important. It is an attack on standards of living and a revelation of a weakening in bargaining power of the workers. It is the first of the consequences of the mechanisation of office work that has been proceeding apace since the end of the war. Machines in offices are producing the same results as are produced by machines in industry. Unemployment, formerly of fairly small proportions so far as clerical workers were concerned, is increasing and wages are falling. Before the war the typewriter was the chief piece of office machinery. To-day it is only one of many. Calculating machines, ledger posting machines, addressographs, mechanical sorters, copying machines, automatic switchboards are but a few of the mechanical devices that are supplanting labour in offices and, by simplifying processes, increasing competition. Before the calculating machine was used, a certain proficiency in arithmetic was essential for a clerk ; now it is not at all necessary. Consequently, employers are able to recruit their staff from a lower educational grade, and to utilise women instead of men. In other words, the supply of clerical workers is being extended while the demand is diminishing. It is this that leads to increased unemployment and enables attacks on wage standards to be successfully launched. The talk of reducing pay in order to help trade recovery is a mere subterfuge. Clerical workers should not blind themselves to the real economic forces at work. As was stated by a writer in the Journal of the Institute of Bankers in Ireland (October, 19291, the changes resulting from the introduction of machines into offices are “analogous in some respects to the industrial revolution of a century ago.” According to this writer, office machines give three times the output possible by hand, with less and cheaper labour. Other conclusive evidence to this same effect is abundant. Mr. H. L. Rouse, Assistant Chief Accountant of the Midland Bank, Ltd., wrote in The Banker (November, 1930) : “Two ledger posting machines should enable two male clerks 10 be released (!) and should necessitate the engagement of one new female operator.” In a debate reported in the Journal of the Institute of Bankers (January, 1930), Mr. Rouse, discussing the installation of machinery at 73 branches of the Midland, said : “The net saving of salary to these branches is approximately £85,000 per annum against a capital outlay of £150,000; but as the life of these machines may be fairly regarded as ten years, it is obvious that the economy effected is a very substantial one.”

He went on to point out that at these branches 311 men were withdrawn consequent on the introduction of the machines, and 86 women engaged, and that new entrants to the bank had been considerably curtailed, so that juniors already in the service would have to mark time for a period until the process of mechanisation had reached its economic limit. Mr. F. Hyde, General Manager of the Midland Bank, told the Civil Service Royal Commission, on Monday, February 23rd, 1931, that the machines had enabled his bank to cut down their intake of young male clerks from between 400 and 500 a year to about 200 a year.

It is interesting, in passing, to notice that the same problem arose in the Post Office Saving’s Bank before it arose in the non-Government banks. It is claimed by high Savings Bank officials that the Post Office led the way in introducing machines and is already saving £40,000 a year by employing lower-paid women machine operators in place of men clerks. One witness at the Civil Service Commission, Sir Alfred Woodgate, went so far as to suggest the replacement of the great bulk of men clerks in the Civil Service by women at lower pay.

This general tendency to employ women on machine operating- intensifies the downward tendency of wages. The male clerical worker hopes to rise to a certain salary, say, in 15 years, and to receive at least that salary for the rest of his working life, say for 30 years. But women workers’ salaries do not rise to the same levels, and as women retire earlier than men, they receive the highest rates of pay in fewer instances and for a shorter period. On this point Mr. Rouse, in the debate already referred to, was quite definite, his evidence being to the effect that “the female staff are more subject to change than the male staff; in fact, 15 per cent. to 20 per cent. of the females resign every year and are replaced by new entrants at the lowest salary.”

This is sufficient to show how machinery causes workers to be dismissed, the substitution of cheaper labour, and a contraction in the demand for labour.

The introduction of mechanical appliances has already gone far, but the process is only in its infancy. As the City Editor of The Times states : “The mechanisation of banking is likely to increase considerably cluring the next few years in order to reduce labour costs” (Times, December 22nd, 1930). This remark can safely be extended to apply to all other branches of clerical employment.

So far as Socialists are concerned, we have dealt with this mechanisation of clerical work because it bears out two points we have always made.

Firstly, it shows that, under capitalism, machines arc additional weapons in the hands of the employers, creating unemployment and lowering wages. Secondly, clerical workers must ultimately realise that they are not a class apart in society, a “middle class,” but that, economically considered, their position is identical with that of the so-called manual workers. They are, like navvies, dependent for their living on being able to sell their labour-power. They are propertyless individuals working for wages for the benefit of the property-owning-class. They are members of the working class. Until they act politically in the light of that fact, they will continue to find that machinery is of no benefit to them.

“BANK CLERK”