Evidence of the existence of an internal labour market in the Great Eastern Railway Company, 1875-1905

Business History

Volumn 42, Issue 1, 2000, Pages 21-40

  Howlett, Peter ^a  

^a LONDON SCHOOL OF ECONOMICS   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

ECONOMIC HISTORY; LABOR MARKET; WAGE DETERMINATION;

UNITED KINGDOM;

EID: 0034053407     PISSN: 00076791     EISSN: None     Source Type: Journal    
DOI: 10.1080/00076790000000173     Document Type: Article

References (47)

1. R. Fitzgerald, British Labour Management and Industrial Welfare, 1846-1939 (London, 1988), p.20 (my italics).
2. D. Drummond, '"Specifically Designed?" Employers' Labour Strategies and Worker Responses in British Railway Workshops, 1838-1914', Business History, Vol.31 (1989), pp.10-11 (my italics).
3. P.W. Kingsford, Victorian Railwaymen: The Emergence and Growth of Railway Labour, 1830-1870 (London, 1970), especially chapters 1, 4, 6 and 8.
4. P.B. Doeringer and M.J. Piore, Internal Labour Markets and Manpower Analysis (London, 1971).
5. D.K. Drummond, Crewe: Railway Town, Company, and People, 1840-1914 (Aldershot, 1995), especially Chapters 2-5; her focus is on the workers in the railway workshops. M. Savage, 'Discipline, Surveillance and the "Career": Employment on the Great Western Railway 1833-1914', in A. McKinlay and K. Starkey (eds.), Foucault, Management and Organisation Theory: From Panopticon to Technologies of Self (London, 1998). Gratton and Licht provide two examples of comparable work on the nineteenth-century American railways. W. Licht, Working for the Railroad: The Organization of Work in the Nineteenth Century (Princeton, NJ, 1983), especially Chapters 2 and 4; B. Gratton, '"A Triumph in Modern Philanthropy": Age Criteria in Labour Management at the Pennsylvania Railroad, 1875-1930', Business History Review, Vol.64 (1990), pp.630-56.
6. D.K. Drummond, Crewe: Railway Town, Company, and People, 1840-1914 (Aldershot, 1995), especially Chapters 2-5; her focus is on the workers in the railway workshops. M. Savage, 'Discipline, Surveillance and the "Career": Employment on the Great Western Railway 1833-1914', in A. McKinlay and K. Starkey (eds.), Foucault, Management and Organisation Theory: From Panopticon to Technologies of Self (London, 1998). Gratton and Licht provide two examples of comparable work on the nineteenth-century American railways. W. Licht, Working for the Railroad: The Organization of Work in the Nineteenth Century (Princeton, NJ, 1983), especially Chapters 2 and 4; B. Gratton, '"A Triumph in Modern Philanthropy": Age Criteria in Labour Management at the Pennsylvania Railroad, 1875-1930', Business History Review, Vol.64 (1990), pp.630-56.
7. D.K. Drummond, Crewe: Railway Town, Company, and People, 1840-1914 (Aldershot, 1995), especially Chapters 2-5; her focus is on the workers in the railway workshops. M. Savage, 'Discipline, Surveillance and the "Career": Employment on the Great Western Railway 1833-1914', in A. McKinlay and K. Starkey (eds.), Foucault, Management and Organisation Theory: From Panopticon to Technologies of Self (London, 1998). Gratton and Licht provide two examples of comparable work on the nineteenth-century American railways. W. Licht, Working for the Railroad: The Organization of Work in the Nineteenth Century (Princeton, NJ, 1983), especially Chapters 2 and 4; B. Gratton, '"A Triumph in Modern Philanthropy": Age Criteria in Labour Management at the Pennsylvania Railroad, 1875-1930', Business History Review, Vol.64 (1990), pp.630-56.
8. D.K. Drummond, Crewe: Railway Town, Company, and People, 1840-1914 (Aldershot, 1995), especially Chapters 2-5; her focus is on the workers in the railway workshops. M. Savage, 'Discipline, Surveillance and the "Career": Employment on the Great Western Railway 1833-1914', in A. McKinlay and K. Starkey (eds.), Foucault, Management and Organisation Theory: From Panopticon to Technologies of Self (London, 1998). Gratton and Licht provide two examples of comparable work on the nineteenth-century American railways. W. Licht, Working for the Railroad: The Organization of Work in the Nineteenth Century (Princeton, NJ, 1983), especially Chapters 2 and 4; B. Gratton, '"A Triumph in Modern Philanthropy": Age Criteria in Labour Management at the Pennsylvania Railroad, 1875-1930', Business History Review, Vol.64 (1990), pp.630-56.
9. See for example, H.F. Gospel and C.R. Littler, Managerial Strategies and Industrial Relations (Aldershot, 1983); J. Turner, 'Man and Braverman: British Industrial Relations', History, Vol.70 (1985), pp.236-42; Fitzgerald, British Labour Management.
10. See for example, H.F. Gospel and C.R. Littler, Managerial Strategies and Industrial Relations (Aldershot, 1983); J. Turner, 'Man and Braverman: British Industrial Relations', History, Vol.70 (1985), pp.236-42; Fitzgerald, British Labour Management.
11. See for example, H.F. Gospel and C.R. Littler, Managerial Strategies and Industrial Relations (Aldershot, 1983); J. Turner, 'Man and Braverman: British Industrial Relations', History, Vol.70 (1985), pp.236-42; Fitzgerald, British Labour Management.
12. Turner, 'Man and Braverman', p.237.
13. In 1905 its market value (£47.9 million) ranked it as the tenth largest railway company, whereas in 1912 it accounted for the fifth highest amount of total train miles (22.5 million). P. Wardley, 'The Anatomy of Big Business: Aspects of Corporate Development In The Twentieth Century', Business History, Vol.33 (1991), p.278; J.S. Dodgson, 'British Railway Cost Functions and Productivity Growth, 1900-1912', Explorations in Economic History, Vol.30 (1993), p.176.
14. In 1905 its market value (£47.9 million) ranked it as the tenth largest railway company, whereas in 1912 it accounted for the fifth highest amount of total train miles (22.5 million). P. Wardley, 'The Anatomy of Big Business: Aspects of Corporate Development In The Twentieth Century', Business History, Vol.33 (1991), p.278; J.S. Dodgson, 'British Railway Cost Functions and Productivity Growth, 1900-1912', Explorations in Economic History, Vol.30 (1993), p.176.
15. For a history of the GER see C.J. Allen, The Great Eastern Railway (London, 1955). See also D.I. Gordon, A Regional History of the Railways of Great Britain, Volume V: The Eastern Counties (Newton Abbot, 3rd edn., 1990), and H.P. White, A Regional History of the Railways of Great Britain, Volume II:. Greater London (Newton Abbot, 3rd edn., 1987), pp.178-99.
16. For a history of the GER see C.J. Allen, The Great Eastern Railway (London, 1955). See also D.I. Gordon, A Regional History of the Railways of Great Britain, Volume V: The Eastern Counties (Newton Abbot, 3rd edn., 1990), and H.P. White, A Regional History of the Railways of Great Britain, Volume II:. Greater London (Newton Abbot, 3rd edn., 1987), pp.178-99.
17. For a history of the GER see C.J. Allen, The Great Eastern Railway (London, 1955). See also D.I. Gordon, A Regional History of the Railways of Great Britain, Volume V: The Eastern Counties (Newton Abbot, 3rd edn., 1990), and H.P. White, A Regional History of the Railways of Great Britain, Volume II:. Greater London (Newton Abbot, 3rd edn., 1987), pp.178-99.
18. Allen, Great Eastern Railway, pp.53-7.
19. W.M. Ackworth, The Railways of England (London, 5th edn., 1900), pp.410-11; Allen, Great Eastern Railway, pp.57-63.
20. W.M. Ackworth, The Railways of England (London, 5th edn., 1900), pp.410-11; Allen, Great Eastern Railway, pp.57-63.
21. Ackworth, The Railways of England, p.432.
22. P.P. 1876, LXV, Railway Returns for England and Wales, Scotland, and Ireland for the Year 1875, p.56; P.P. 1906, CVI, Railway Returns for England and Wales, Scotland, and Ireland for the Year 1905, p.50.
23. P.P. 1876, LXV, Railway Returns for England and Wales, Scotland, and Ireland for the Year 1875, p.56; P.P. 1906, CVI, Railway Returns for England and Wales, Scotland, and Ireland for the Year 1905, p.50.
24. PRO, RAIL 1053/212, Miscellaneous Returns, 1884, Employment in Railway Companies by Department and Job on 31 March 1884; PRO, RAIL 1025/11, GER Staff Arbitration 1909, No.2, Day 10, Appendix 85, p.866.
25. 'Each company had to involve its sizeable workforce in the membership of provident funds, in order to establish a co-operative, stable and disciplined labour force Extensive internal labour markets made the retention of skills through pension schemes and good conditions a useful instrument of employment policy.' Fitzgerald, British Labour Management, p.42. Hannah has argued that the spread of business pension funds was in large part motivated by a desire to reduce turnover costs. L. Hannah, Inventing Retirement: The Development of Occupational Pensions in Britain (Cambridge, 1986), pp.11, 25-9, 100. Unfortunately, there are no systematic labour turnover data for the GER in this period.
26. 'Each company had to involve its sizeable workforce in the membership of provident funds, in order to establish a co-operative, stable and disciplined labour force Extensive internal labour markets made the retention of skills through pension schemes and good conditions a useful instrument of employment policy.' Fitzgerald, British Labour Management, p.42. Hannah has argued that the spread of business pension funds was in large part motivated by a desire to reduce turnover costs. L. Hannah, Inventing Retirement: The Development of Occupational Pensions in Britain (Cambridge, 1986), pp.11, 25-9, 100. Unfortunately, there are no systematic labour turnover data for the GER in this period.
27. The evidence from the USA, for example, suggests that pension schemes were initially used as anti-union devices. Thus, it is not inconceivable that the initial embrace of ILM structures by the GER could have been a pre-emptive strike against unionism. However, by the late nineteenth century in the USA, pension schemes were being used as a device to rid companies of older workers who were perceived to be less productive, which suggests that the development of ILMs is a complex process that cannot be reduced to mono-causal explanation. Gratton, 'Age Criteria', pp.631-45.
28. G. Alderman, The Railway Interest (Leicester, 1973), pp.172, 181, 194, 200, 210, 219.
29. PRO, MT 6/2205/3, GER, Superannuation Fund, 1906-13; PRO, RAIL 1115/51, GER Provident Savings Bank, 1879-1944; PRO, RAIL 1115/57, GER Superannuation Fund and New Superannuation Fund, 1880-1939; PRO, RAIL 1115/58, GER Pension Fund and New Pension Fund 1892-1957. The Superannuation Fund was established in 1879 and was compulsory for all new salaried staff under the age of 25. The staff contribution of 2.5 per cent of salary was matched by the GER. It was replaced in 1897 by the New Superannuation Fund. The Pension Fund was a voluntary scheme founded in 1891. In 1895 the voluntary Pension Supplemental Fund was created for workers in higher grades (as deemed by the GER) and whose weekly wage was at least 25 shillings (£1.25). In 1898 these schemes were replaced by the New Pension Fund and the New Pension Supplemental Fund. In 1892 the GER also instituted the Old Age Relief Pension Fund (a non-contributory scheme for workers aged 65 and above) and the Supplemental Old Age Relief Pension Fund (a non-contributory scheme for workers aged between 55 and 65). By 1902 approximately half of the employees of the GER were in one of its pension funds.
30. Modern studies in both the UK and the USA confirm that pension membership reduced job mobility and increased average tenure. A. Henley, R. Disney and A. Carruth, 'Job Tenure and Asset Holdings', Economic Journal, Vol.104 (1994), pp.338-49; B.R. Schiller and R.D. Weiss, 'The Impact of Private Pensions on Firm Attachment', Review of Economics and Statistics, Vol.61 (1979), pp.369-80.
31. Modern studies in both the UK and the USA confirm that pension membership reduced job mobility and increased average tenure. A. Henley, R. Disney and A. Carruth, 'Job Tenure and Asset Holdings', Economic Journal, Vol.104 (1994), pp.338-49; B.R. Schiller and R.D. Weiss, 'The Impact of Private Pensions on Firm Attachment', Review of Economics and Statistics, Vol.61 (1979), pp.369-80.
32. Railway Officer, Railway Reorganisation (London, 1919), p.92. In addition, in terms of the categories employed in the national Railway Returns (which did not necessarily reflect the internal departmental structure of individual railway companies) the wage bill for the traffic department was by far the largest. In 1905 in the GER it accounted for £800, 213 (almost half the wage bill) whilst the next largest category, for those employed 'in working locomotive engines', was only £270, 913. Board of Trade, Returns of the Capital, Traffic, Receipts and Working Expenditure of the Railway Companies of the United Kingdom for 1905 (London, 1906).
33. Railway Officer, Railway Reorganisation (London, 1919), p.92. In addition, in terms of the categories employed in the national Railway Returns (which did not necessarily reflect the internal departmental structure of individual railway companies) the wage bill for the traffic department was by far the largest. In 1905 in the GER it accounted for £800, 213 (almost half the wage bill) whilst the next largest category, for those employed 'in working locomotive engines', was only £270, 913. Board of Trade, Returns of the Capital, Traffic, Receipts and Working Expenditure of the Railway Companies of the United Kingdom for 1905 (London, 1906).
34. PRO, RAIL 227/459-79, GER Wages Staff Histories Registers, Traffic Staff.
35. The initial sample was adjusted to exclude individuals whose staff histories were incomplete or showed grave and inexplicable inconsistencies (most of which would seem to reflect transcription errors) or whose job was problematic. The excluded jobs were gateman, carriage searcher, waiting room attendant and lavatory attendant. Gatemen were excluded because they operated outside the normal traffic department structure (typically their whole career would be spent as a gateman and their remuneration included a cottage rented from the company). The other three jobs were excluded because they too operated outside the normal department structure and reflected a paternalistic side of the company. These jobs were given to men who were unable to continue their normal job due to disability (normally the result of a work-related accident, such as the loss of limbs or defective sight) or to women whose deceased husbands had given long service to the company (for example, the 'widow of [the] late Head Porter, Liverpool Street' became a lavatory attendant in 1886 and was still performing the same job 20 years later).
36. PRO, RAIL 227/195-6, Old Age Wages Staff Committee, Minute Book, 1894-1912. A flavour of how American railway companies treated their older workers can be found in Gratton, 'Age Criteria'.
37. Of the latter: eight cases were postponed for later review (for six months in one case, and a year for the rest); one person was recommended for retirement in 12 months' time on 5 shillings per week (£0.25), his current weekly wage being 12 shillings (£0.60); two were to retire immediately, also on 5 shillings per week, their current weekly wages being 18 and 14 shillings (£0.90 and £0.70); and the final man was to retire immediately on his Supplementary Old Age Fund. Of the 13, two were members of the Supplementary Old Age Fund and seven were members of the Provident Society. PRO, RAIL 227/195, meeting of the Old Age Wages Staff Committee, 26 March 1895.
38. N.F.R. Crafts and T.C. Mills, 'Trends in Real Wages in Britain, 1750-1913', Explorations in Economic History, Vol.31 (1994), pp.181-2.
39. Calculated from Labour Research Department, Labour and Capital on the Railways (London, 1923), Appendix II(b), p.64. This is not to say that all railway workers were poorly paid. In 1914 the engine drivers were the labour aristocracy of the railway workers, earning 26 per cent more than the average for all wage earners; whilst goods porters earned a mere 65 per cent of the national average. The Jubilee of the Railway News, 1864-1914, 'The Advantages of Railway Service', p.177; Irving, North-Eastern Railway, pp.73-4.
40. Calculated from Labour Research Department, Labour and Capital on the Railways (London, 1923), Appendix II(b), p.64. This is not to say that all railway workers were poorly paid. In 1914 the engine drivers were the labour aristocracy of the railway workers, earning 26 per cent more than the average for all wage earners; whilst goods porters earned a mere 65 per cent of the national average. The Jubilee of the Railway News, 1864-1914, 'The Advantages of Railway Service', p.177; Irving, North-Eastern Railway, pp.73-4.
41. Calculated from Labour Research Department, Labour and Capital on the Railways (London, 1923), Appendix II(b), p.64. This is not to say that all railway workers were poorly paid. In 1914 the engine drivers were the labour aristocracy of the railway workers, earning 26 per cent more than the average for all wage earners; whilst goods porters earned a mere 65 per cent of the national average. The Jubilee of the Railway News, 1864-1914, 'The Advantages of Railway Service', p.177; Irving, North-Eastern Railway, pp.73-4.
42. B.C. Roberts, 'Wages and the Railways', Political Quarterly, Vol.26 (1955), p.123.
43. PRO, RAIL 227/360, Scales of Pay and Hours of Duty, Etc., of Staff in the Superintendent's Department, 1905-11, pp.86-90.
44. Irving, North-Eastern Railway, p.57.
45. In their classic study, Doeringer and Piore say that entry into ILMs 'is limited to particular jobs or ports of entry'. Doeringer and Piore, Internal Labour Markets, p.x.
46. A more systematic appreciation of the link between tenure and wage is provided by Figure 2.
47. G. Baker, M. Gibbs and B. Holmstrom, 'The Internal Economics of the Firm: Evidence from Personnel Data', Quarterly Journal of Economics, Vol.109 (1994), p.882.