Employment, retirement and pensions: the Victorian era as a golden age for the elderly

by Tom Heritage (University of Southampton)

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Irish spinning wheel – around 1900
Library of Congress collection

For far too long, our elderly ancestors have been viewed through the prism of the National Health Service and the modern welfare state: old people are regarded as a burden, taking out of society rather than contributing. In contrast, this study of census data for five counties across England and Wales from 1851 to 1911 reveals a reciprocal relationship between those living in old age and wider society.

First, across the whole period, 86-93% of men aged 60 and over were in employment. Even if we exclude those in workhouses, the figure is 80-85%.

Most old men worked in agricultural and general labouring, although an increase was evident by 1911 in the mining industry in Glamorgan and metal manufacturing in Sheffield. Bricklaying, house painting, dock labouring and commercial sales were also pursued in urban areas. Labour force participation rates were higher among men in their sixties than among men in their seventies and eighties.

Second, from 1851 to 1911, between a sixth and a third of women aged over 60 were in employment. Although their occupations were less diverse than those of men, the majority were based in domestic service.

Old women were also involved in cotton and silk textiles and in the manufacture of straw hats. Over time, though, the employment rates of old women did not increase like those of men, owing partly to foreign competition in Asian straw imports and French silks.

Third, retirement was not an innovation brought about by the creation of old age pensions. As early as 1891, over 13% of old men were described in the census as ‘retired’, with high rates in the areas favoured by today’s retirees: the coastal areas of Christchurch and Portsmouth in southern England. More old people retired than went into the workhouse.

But retirement was only an option for those who had inherited or managed to accumulate wealth, such as former smallholders, grocers, innkeepers, civil servants or military officers. Others who lacked land or capital, for example agricultural labourers, or boot and shoe makers were forced to resort to the Poor Law.

Even then, this did not always, or usually, mean the workhouse. Welfare assistance to old people in their own homes was common, especially for women. ‘Outdoor relief’, usually around 2s 6d per week, was issued as a weekly ‘pension’.

Moreover, the women who received it were not always as old as those entitled to a pension in the modern era: in Yorkshire in 1891, over 10% of old women described as ‘on relief’ were under 66, which will be the minimum pension age for women by 2020.

So is it really true to say that nowadays, ‘the elderly have never had it so good’? In a sense it is, as old people lead healthier and longer lives today than they have ever done.

But it would be wrong to conclude that old people in Victorian times were largely condemned to lives of pain and poverty. They had a wide range of experiences, and many had access to employment opportunities and sources of assistance that are no longer offered.

In terms of present day policy, we might learn something from our Victorian forebears about ways to integrate the general population in their sixties into the workforce, so that they can contribute to society as well as receive welfare.

Constructing Equality? Women’s wages, physical labor, and demand factors in Sweden 1550-1759

by Kathryn E. Gary, PhD candidate, Lund University

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Women were important workers in the past, but they are still under-studied and their contributions largely absent from big-picture discussions of historical living standards. This is largely because women’s work remains to some extent a black box, but recent research has both challenged assumptions about how women participated in the paid labor market (c.f. Humphries and Sarasua 2012) and provided data about women’s payment for different kinds of labor (c.f. Humphries and Weisdorf 2015). The current work contributes to both these areas, by creating series of men’s and women’s wages in early modern Sweden, and by exploring both the mechanisms behind the gender gap in pay as well as the conditions under which women enter paid labor, with the goal of better understanding work in the past in general.

Primary data come from unskilled workers in the construction industry in Southern Sweden, predominantly from the towns Malmö and Kalmar; these are combined with published data from Stockholm, also from construction workers (Jansson, Andersson Palm, and Söderberg 1991). All data are for individuals paid by the day; relative wages are simply the percentage of men’s wages that women earn.

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Figure 1 shows women’s relative wages from 1550 to 1759. Relative wages are high at the beginning of the period, around 80 percent, and increase to levels of parity in the early 17th century, after which they decline substantially, reaching as low as 40 percent during the end of the seventeenth century and into the eighteenth. This is a substantial decline over the period of not much more than a generation.
Some relative wage peaks are related to events that change both the demand for and supply of labor. Kalmar was a border town between Sweden and Denmark; from 1611 to 1613 the two countries fought the Kalmar War. Following these years women’s wages peaked, likely due to necessary rebuilding and a shortage in the supply of men. There is a wage spike in the same city following a fire in 1647 – while the national average weighs down the peak values, the deviations are still clear in the series, and when Kalmar is examined individually women’s relative wages peak as high as 1.33.

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Table 1: Women’s work days as a percentage of all workdays in Kalmar, 1614-1710

 

Women’s ability to earn high wages goes against many of our theories about women’s earning potential – women are expected to earn less than men in physical tasks, because women are not as strong as men, and so are less productive physical laborers (Burnette 2008). Other theories suggest that women face constant wage discrimination (c.f. Bardsley 1999) – but this, too, is confounded by women’s ability to out-earn men, and by the large changes in the relative wage series. Something else is happening.

To understand we must look more closely at the data. In Kalmar workers are almost universally identifiable, allowing for deeper examination of the workforce. Table 1 shows the percentage of paid workdays that were worked by women, compared with the total number of paid work days in five year periods. Comparing the proportional feminization of the workforce with the amount of work, we see that the periods with the greatest amount of work are those in which the workforce is the most feminized – these periods are also those during which women’s relative wages are highest (see figure 1).

In combination with the relationship between total paid workdays and women’s relative wages across the whole country (figure 2), we are faced with a pattern that is familiar from the first and second world wars – when labor demand is high, women enter the labor force in higher numbers and are able to command higher wages. There is less evidence that women were systematically paid less either due to discrimination or because of their lower productivity – instead, women are responsive to economic forces, and especially to demand forces.

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Figure 2: women’s relative wages and total paid workdays in Sweden, 1550-1759

 

It is simple to to extend our sense of what is ‘traditional’ deep into the past, and to apply broad categories of ‘men’s’ and ‘women’s’ work. However, when we are able to suspend our assumptions and dig deeper into the evidence, the data tell a less expected story; women in Sweden worked in physical occupations, alongside men, often for similar wages. They worked especially hard when the need was highest, and women’s wages only fell away from men’s when work became less regular and men and women weren’t employed together.

Accounting for women’s work shifts our understanding of household living standards in the long run, and provides strong evidence for what is intuitively clear: we cannot truly understand the past if we continue to discount the experiences or contribution of half the population.

The full working paper can be read here, and a shorter version from the EHS annual conference is available here.

New Researcher Prize: “Why sell oneself into (temporary) slavery?”

by Alexander Persaud, PhD student, University of Michigan
Winner of the New Researcher Prize – Economic History Society 2017

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Free labour dominates our thinking about markets today, yet unfree labour has been and continues to be an important part of the economy.  For example, large numbers of workers from the Indian subcontinent and southeast Asia work in the Middle East under the kafala systemWest Germany recruited Gastarbeiter for decades in the mid-20th century.  Although not widely publicized, the US maintains guest worker programs that tie individuals to a particular employer for a set period and wage.
The existence of these and other contractual forms prompts the question, why do workers voluntarily forego their options and become temporary slaves?  In order to answer this, I turn to an historical example of bonded-labour contracts and international migration:  Indian indentureship in the nineteenth and early twentieth centuries.  I turn to new, unique, individual-level data collected and collated by me on roughly 250,000 Indian indentured servants sent around the world.
A key tenet of the indentureship contract is a guaranteed, fixed wage.  This in turn points to a key driver of unfree labour contracts:  uncertainty about the future and fear of bad economic outcomes may make temporary slavery a viable strategy.  The certainty from the contract outweighs the losses from lack of mobility.
This research traces Indians back to their home districts and calculate measures of volatility (to proxy for uncertainty) at the time of departure. It then models out-migration as a result of push factors (low wages, high prices, and volatility) vs. the pull factors from the guaranteed overseas wage.
The research finds that migration is consistent escaping volatility.  Districts in India with higher volatility were more likely to send immigrants and sent higher numbers than low-volatility districts.  The results were not uniform, though.  Castes heavily involved in owning and investing in land responded more than subsistence-only castes.  This reflects the different time horizons across castes.  Finally, Indians who left from more volatile areas were less likely to return to India.  Thus, not only did volatility affect Indians at the time of departure but also years later at the potential time of return.
Overall, volatility matters.  It caused Indians to sell themselves into temporary slavery and may have important other effects for people near subsistence who are unable to protect themselves against major economic shocks or even minor fluctuations.  More generally, this research highlights how uncertainty about economic conditions, not merely average wage differentials between markets, affects migration and labour choice.

How new technology affects educational choices: lessons from English apprenticeships after the arrival of steam power

by Alexandra de Pleijt (Utrecht University), Chris Minns and Patrick Wallis (London School of Economics)

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Many workers today worry whether robots will do away with their jobs. Most economists argue that the effect of automation is likely to depend on what workers do. Robots may replace some types of manual work, but new jobs will also be created to design, maintain and manage automated production.

A shift towards ‘new jobs’ would mean that different skills will be valued in the future, and many policy experts have argued that secondary and post-secondary education will have to change in response. But if young people and their parents anticipate how automation will affect their job prospects, the choices made among current educational opportunities could shift ahead of any changes in what is offered.

The effects of automation on educational choice will be seen in the future. But past experience can offer some ideas as to whether the arrival of new technology affects these choices, even before the technology is widespread.

This research examines how the arrival of a new production technology affected educational choices in late eighteenth century England. The period between 1760 and 1810 is at the beginning of the largest shift in history from hand- to machine-powered production, through the invention and spread of the steam engine that powered the British Industrial Revolution.

Our research combines detailed evidence on the location and timing of the adoption of steam engines with the records of over 300,000 English apprenticeships from the rolls of the Commissioner of Stamps.

The main finding is that the arrival of steam power changed the willingness of young people to pursue apprenticeships, which for centuries had been the main route to acquiring the skills required for the production of manufactured goods. Counties saw a fall of 40-50% in the share of population entering into textile apprenticeships once a steam engine was present.

Despite the possible association with machine design and maintenance, mechanical apprenticeships also saw a decline of just under 20% following the arrival of steam. Merchant and professional apprentices, who were trading the goods produced by craft or industry, were mostly unaffected.

These findings show that the workforce responded to the emergence of technology that would dramatically change the nature of production and work in the future, but that much of the response was local. Apprenticeships fell first in northern counties where industrial towns and cities with factory-based production had emerged earlier. A similar decline in how workers were trained was not seen in southern and eastern England in the early part of the Industrial Revolution.

 

From The Conversation: No, the Black Death did not create more jobs for women

by Jane Humphries, Professor of Economic History, University of Oxford
Published on 8 April 2014

The plague known as the Black Death which tore through 14th century Europe is traditionally held to have had at least one upside. Women, the theory runs, were able to exploit the labour shortages of post-plague England to find themselves in a richer and more stable position than before. However the idea that women of the era were forerunners of the post World War I generation doesn’t stand up to much scrutiny, as new research shows.

Medievalists have long debated the extent to which women shared in the “golden age” of the English peasantry that followed the demographic catastrophe of the Black Death. The plague killed between 30% and 45% of the population in its first wave 1348-59. Recurrences meant that by the 1370s England’s population had been halved.

The silver lining, for the peasantry at least, was the dramatic increase in workers’ remuneration as landowners struggled to recruit and retain labourers. The results are apparent in a rapid increase in male casual (nominal and real) wages from about 1349.

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Some historians have argued that women’s gains were even more marked as they could find employment in hitherto male-dominated jobs, or migrate to towns to work in the growing textile industries and commercial services and so enjoy “economic independence”.

Others however have suggested that whatever the implications of the Black Death for male workers, the sexual division of labour prevented women from seizing the opportunities created by the labour shortage. As one account puts it: “Women tended to work in low-skilled, low-paid jobs … This was true in 1300 and it remained true in 1700”.

The debate has significant implications as optimists have gone further in arguing that women’s improved wages changed demographic behaviour by delaying marriage, promoting celibacy and reducing fertility, with the resulting so-called north-west European Marriage Pattern raising incomes and promoting further growth.

READ FULL ARTICLE HERE

 

From Immigrant Entrepreneurship – The Business of Migration since 1815

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Millions of American immigrants, who worked in business or started new businesses of their own, also used businesses in order to reach America in the first place. Before the mid nineteenth century advent of the telegraph, railroad and steamship, this migration usually relied on the services of multiple businesses and intermediaries in order to carry out long multi-stage journeys across land and ocean. In the modern “global village,” interconnected by widely available fast air travel, key services needed by international migrants are also generally dispersed across multiple businesses, often related mainly to surmounting and adapting to legal restrictions. In between, during late nineteenth and early twentieth centuries, the business of migration was concentrated mainly on the crossing of the North Atlantic. Mass transatlantic migration then became the core segment of the world’s first major intercontinental travel industry, a business in which large German shipping lines played a leading role. Within a longer term context, this essay emphasizes that middle epoch of commercially-provided physical relocation from Europe to the United States, and also includes a sub-focus on entrepreneurship of German origin.

Read full article here: http://immigrantentrepreneurship.org/entry.php?rec=281

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From VOX – De-industrialisation, ‘new Speenhamland’ and neo-liberalism

by Jim Tomlinson, Professor of Economic and Social History, University of Glasgow
From VOX – 05 July 2015

In Britain today, a majority of those in poverty live in working, rather than non-working, households. This challenges the long-held notion that paid work offers a route out of poverty. This column argues that structural changes in the labour market have brought about profound changes in the social security system. A failure to acknowledge these underlying changes means that dialogues about the political direction of the British economy can be problematic and potentially misleading.

Read the full article on VOX:

http://voxeu.org/article/de-industrialisation-new-speenhamland-and-neo-liberalism

From VOX – British wellbeing 1780-1850: Measuring the impact of industrialisation on wages, health, inequality, and working time

by Daniel Gallardo Albarrán, appeared on 22nd May 2016

http://voxeu.org/article/british-wellbeing-1780-1850-impact-industrialisation

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From WSJ – The Fall of the Unions Paved the Way for Donald Trump

Working-class whites once had a political home at the union hall; now they’ve found solidarity in a new populist movement

“There are two great material tasks in life,” declared John L. Lewis, the autocratic yet beloved head of the powerful United Mine Workers, to his followers during the 1940 presidential campaign. “The first is to achieve or acquire something of value or something that is desirable…The second task is to prevent some scoundrel from taking it away from you.”

The cheers and loyalty that such sentiments long evoked across the Rust Belt are worth recalling in the wake of Donald Trump’s shocking victory. Pundits across the ideological spectrum are busily repeating the obvious: White working-class men and women vented their frustrations at global elites, well-educated liberals, a condescending media and a capable but sometimes dissembling Democratic candidate in a pantsuit.

You can read the rest of the article on the Wall Street Journal online:

http://www.wsj.com/articles/the-fall-of-the-unions-paved-the-way-for-donald-trump-1478886094

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What happened to immigrant earnings during the Great Depression?

by Chris Minns, Economic History Department, LSE

 

The Great Depression devastated North American labour markets for a decade, with about a quarter of the work force unemployed at the peak of the crisis. It is well known that the headline figure conceals the extent to which the burden of the Depression was shared unequally. In addition to sharp differences in employment patterns between cities and regions, it was less-skilled workers who saw demand for their labour fall more than those able to access white-collar work. Older men who lost their jobs were particularly vulnerable to falling into the trap of long-term unemployment. There is some evidence to suggest that the Depression may have exacerbated ethnic differences in the labour market, with black men in the United States were affected more heavily than their white counterparts. How was the Depression experienced by the foreign-born population who had settled in large numbers in both Canada and the United States up until the early 1920s? A recent research paper by Kris Inwood, Fraser Summerfield, and myself sought to answer this question using statistical evidence drawn from new digital samples of the Canadian Censuses from 1911 to 1931.

There are three reasons we were particularly interested in this topic. First, while some social historians have argued that immigrants suffered greater exposure to labour market discrimination when jobs were rationed in the 1930s, there is surprisingly little published evidence to confirm or contradict this contention. Second, by focusing on the earnings of immigrants over a twenty year period, we wanted to see whether the experience of the Depression had implications for the long-run labour market adjustment of immigrants relative to native-born Canadians. Third, Canada offers an excellent laboratory in which to conduct this research. The Depression experience in Canada was comparable to the United States in terms of unemployment trends in the early 1930s, and the country was a leading destination for European immigrants from the late 19th century. A unique feature of early 20th century Canada was that Census questionnaires asked respondents to report their earnings beginning in 1901. This means that our measure of attainment can reflect changes in pay within occupations and the effects of spell of unemployment on total earnings.

Our analysis of Census earnings yields a striking pattern: immigrants experienced “reverse assimilation” in Canadian labour markets, with the gap in pay between immigrants and the native-born growing between 1921 and 1931. Figures 1 and 2 show predicted earnings for immigrants relative to otherwise identical native-born Canadians for young, recent migrants (Figure 1), and older migrants with longer tenure in Canada (Figure 2). Free migrants had unrestricted access to Canada, and came mainly from the United States and the United Kingdom and Ireland. Preferred and non-preferred migrants hailed mostly from Continental Europe. The figures show that the relative decline of immigrant earnings was strongest among older men, even among those who had lived in Canada for decades when the Depression hit. We also find that the effects are focused almost entirely among immigrants from continental Europe who were not native English speakers, with American and British migrants experiencing no reversal in relative earnings.

Figure 1: Predicted relative immigrant earnings, born 1886, arriving 1911

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Figure 2: Predicted relative immigrant earnings, born 1871, arriving 1896

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The evidence of reverse assimilation is not a statistical artefact due to selective return migration of European migrants, or selective outmigration of Canadian residents to the United States; international migration flows were much lower in the early 1930s than the late 1920s, despite the government encouraging the return of indigent migrants to their home countries. Nor are the problems of migrants accounted for by a skills mismatch created by the differential shocks of the late 1920s and early 1930s, with immigrants having the misfortune of being concentrated in the jobs that were hit hardest. One factor that does account for a large share in the earnings gap is unemployment; immigrants in the 1931 Census were more likely to have lost time out of work than their native-born counterparts. This suggests that one way in which ethnicity mattered in the Depression was that those who were most obviously foreign were the first to lose their jobs and the last to be rehired. But unemployment does not fully account for reverse assimilation, as non-English speaking immigrants from continental Europe experienced a significant decline in weekly earnings between 1921 and 1931, relative to their native-born counterparts.

Our findings point to a disturbing conclusion: apparently well-integrated immigrants were more vulnerable to the adverse effects of a sustained recession than native-born workers with similar skills.  Whether this pattern has been repeated in immigrant receiving economies during the recent crisis is an important question for future research.