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When Piece Rates Work: More Lessons from the Cotton Mills

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  • Michael Huberman

Abstract

Workers paid by the piece should in principle cooperate with new techniques that increase their output. In practice, however, firms seem unable to keep piece rates fixed, and when they cut rates workers often respond by restricting output. This paper investigates a case where in fact firms abstained from cutting rates and workers refrained from reducing effort. In Lancashire cotton spinning workers and firms negotiated piece rate lists which fixed standard rates of pay. Both parties had incentives to keep at bay the forces of competition. The lists gave workers a share in the gains of technical change, and they allowed firms to reap the benefits of regional specialisation. The lists were enforced by community standards. Les travailleurs payés à la pièce devraient en principe coopérer avec l'avènement de nouvelles technologies qui augmentent leur production. En pratique toutefois, les firmes semblent incapables de conserver un taux à la pièce fixe et quand elles coupent les taux, les travailleurs répondent souvent en restreignant leur production. Ce texte examine un cas où dans les faits les firmes se sont abstenues de couper les taux et les travailleurs eux, se sont abstenus de réduire leurs efforts. Dans le Lancashire, les ouvriers des filatures de coton et les firmes ont négociés des listes de taux à la pièce qui fixait les taux standards à payer. Les deux parties trouvaient leur avantage à tenir en échec les forces de la compétition. Les listes donnaient aux travailleurs un profit sur les changements technologiques et elles permettaient aux firmes de récolter les bénéfices de la spécialisation régionale. Les listes étaient0501ntenues selon les standards des communautés du Lancashire.

Suggested Citation

  • Michael Huberman, 1995. "When Piece Rates Work: More Lessons from the Cotton Mills," CIRANO Working Papers 95s-10, CIRANO.
  • Handle: RePEc:cir:cirwor:95s-10
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    File URL: http://www.cirano.qc.ca/files/publications/95s-10.pdf
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    References listed on IDEAS

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    1. Attanasio, Orazio P & Browning, Martin, 1995. "Consumption over the Life Cycle and over the Business Cycle," American Economic Review, American Economic Association, vol. 85(5), pages 1118-1137, December.
    2. Abel, Andrew B, 1990. "Asset Prices under Habit Formation and Catching Up with the Joneses," American Economic Review, American Economic Association, vol. 80(2), pages 38-42, May.
    3. Attanasio, Orazio P., 1995. "The intertemporal allocation of consumption: theory and evidence," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 42(1), pages 39-56, June.
    4. Joseph G. Altonji & Aloysius Siow, 1987. "Testing the Response of Consumption to Income Changes with (Noisy) Panel Data," The Quarterly Journal of Economics, Oxford University Press, vol. 102(2), pages 293-328.
    5. Bowman, David & Minehart, Debby & Rabin, Matthew, 1993. "Loss Aversion in a Savings Model," Department of Economics, Working Paper Series qt0gf4p3ts, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    6. Eberly, Janice C, 1994. "Adjustment of Consumers' Durables Stocks: Evidence from Automobile Purchases," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 403-436, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Piece rate; Regional specialisation; Technical change; Taux ; a la pièce ; Spécialisation régionale ; Changements technologiques;

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment
    • N63 - Economic History - - Manufacturing and Construction - - - Europe: Pre-1913

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