# The New International Encyclopædia/Labor Problems

Edition of 1905. See also The labor problem on Wikipedia; and the disclaimer.
​ LABOR PROBLEMS. The rise of capitalistic industry, creating a social class whose only resource is the sale of their labor, has brought to the front a new group of social problems, which are commonly known as labor problems, or, more simply, as the labor problem. The determination of the just portion of labor in distribution, the social enforcement of the canons of distribution established, and the assurance to the laborer of tolerable conditions of life are the essence of the problem.
In the first quarter of the nineteenth century educated opinion viewed free competition as a force capable of bringing about the best possible solution of the problem. The greatest freedom of contract would place each individual where his productivity was greatest, and assure him of the greatest reward compatible with the maximum of social happiness. It was soon perceived, however, that the freedom of contract between employer and laborer was largely illusory, owing to the ignorance and helplessness of the latter. Especially was this true in the case of children, who were often bound to the employer by parish authorities or placed under his control by unnatural parents. A party arose demanding the State regulation of the labor contract in favor of the weak. (See Labor Legislation.) The extent of Government regulation was the concrete form assumed by the labor problem in England from the second decade of the nineteenth century.
Contract relations between the adult laborer and the employer were on an unsatisfactory basis so long as the individual laborer bargained with the employer, or perhaps a combination of employers. Partially as a result of this disadvantage of position, laborers began to combine in trade unions (q.v.), believing that thus they might better their position without the tardy intervention of the State. The struggles between combined labor and the employer gave a new impetus to Socialism. Many students of social science believed it to be necessary to eliminate the employer by founding an organization based upon free association (see Fourier; Fourierism), on coöperation (q.v.) (see also Owen, Robert), ​or on the appropriation to the State of the means of production. (See Socialism; Marx, Karl.) Later the view came to be widely held that the true solution of the labor problem lay in the merging of the interests of employer and employed by a system of profit-sharing (q.v.), by inducing laborers to purchase shares in the corporation employing them, or by the development of an ethical relation between employer and employed, the employer making it his care to provide for the moral and material welfare of his laborers, both in the factory and in their homes. (See Krupp Foundries, Social Work at.) State and corporate provision of funds to insure against invalidity and old age (see Old-Age Pensions; Workingmen's Insurance) represents a new development of thought, aiming to free the laborer from the constant danger of pauperism, and so to render him less discontented with the prospect of remaining a wage-earner throughout his life. Industrial arbitration (q.v.), voluntary and compulsory, represents another comparatively recent solution for the evil of industrial discord.
The modern tendency is to treat the labor problem as an exceedingly complicated one, which cannot be solved by any single remedy. Extension of factory legislation, encouragement of the formation of responsible trade unions, arbitration, identification, wherever possible, of the interests of employer and employed, are recognized to be among the more important factors of the solution of the problem. Whatever has hitherto been accomplished, however, in behalf of labor, and whatever measures are advocated for further improvement, concern almost exclusively the factory laborer. There remains a large class consisting of the day laborer of the cities and the agricultural laborers, who have hitherto been unable to combine successfully to better their positions, and whose conditions of employment are so varied and uncertain that little can be done for them by legislation. These classes are, however, diminishing in numbers relatively to the laborers employed in factories, and with the progress in public education and consequent improved mobility of labor, may be expected to share in some measure the advantages secured by the factory laborers.
In addition to the references given in the text, see Collectivism; Eight-Hour Day; Employment Bureaus; Factory Inspection; Industrial Revolution; Labor; Labor Congresses; Lockout; Socialism; Strikes; Sweating System; Wages.