Labor Efficiency

LABOR EFFICIENCY; SKILL; INTELLIGENCE; APPLICATION COORDINATION;
CONTRACT WORK; LABOR UNIONS; REAL BASIS OF WAGES.

The realization from a mine of the profits estimated from the other
factors in the case is in the end dependent upon the management.
Good mine management is based upon three elementals: first, sound
engineering; second, proper coördination and efficiency of every human
unit; third, economy in the purchase and consumption of supplies.

The previous chapters have been devoted to a more or less extended
exposition of economic engineering. While the second and third
requirements are equally important, they range in many ways out of
the engineering and into the human field. For this latter reason
no complete manual will ever be published upon "How to become a
Good Mine Manager."

It is purposed, however, to analyze some features of these second
and third fundamentals, especially in their interdependent phases,
and next to consider the subject of mine statistics, for the latter
are truly the microscopes through which the competence of the
administration must be examined.

The human units in mine organization can be divided into officers
and men. The choice of mine officers is the assembling of specialized
brains. Their control, stimulation, and inspiration is the main work
of the administrative head. Success in the selection and control of
staff is the index of executive ability. There are no mathematical,
mechanical, or chemical formulas for dealing with the human mind
or human energies.

LABOR.--The whole question of handling labor can be reduced to
the one term "efficiency." Not only does the actual labor outlay
represent from 60 to 70% of the total underground expenses, but
the capacity or incapacity of its units is responsible for wider
fluctuations in production costs than the bare predominance in
expenditure might indicate. The remaining expense is for supplies,
such as dynamite, timber, steel, power, etc., and the economical
application of these materials by the workman has the widest bearing
upon their consumption.

Efficiency of the mass is the resultant of that of each individual
under a direction which coördinates effectively all units. The
lack of effectiveness in one individual diminishes the returns
not simply from that man alone; it lowers the results from numbers
of men associated with the weak member through the delaying and
clogging of their work, and of the machines operated by them.
Coördination of work is a necessary factor of final efficiency. This
is a matter of organization and administration. The most zealous
stoping-gang in the world if associated with half the proper number
of truckers must fail to get the desired result.

Efficiency in the single man is the product of three factors,--skill,
intelligence, and application. A great proportion of underground
work in a mine is of a type which can be performed after a fashion
by absolutely unskilled and even unintelligent men, as witness the
breaking-in of savages of low average mentality, like the South
African Kaffirs. Although most duties can be performed by this
crudest order of labor, skill and intelligence can be applied to
it with such economic results as to compensate for the difference
in wage. The reason for this is that the last fifty years have seen
a substitution of labor-saving machines for muscle. Such machines
displace hundreds of raw laborers. Not only do they initially cost
large sums, but they require large expenditure for power and up-keep.
These fixed charges against the machine demand that it shall be
worked at its maximum. For interest, power, and up-keep go on in
any event, and the saving on crude labor displaced is not so great
but that it quickly disappears if the machine is run under its
capacity. To get its greatest efficiency, a high degree of skill
and intelligence is required. Nor are skill and intelligence alone
applicable to labor-saving devices themselves, because drilling and
blasting rock and executing other works underground are matters
in which experience and judgment in the individual workman count
to the highest degree.

How far skill affects production costs has had a thorough demonstration
in West Australia. For a time after the opening of those mines
only a small proportion of experienced men were obtainable. During
this period the rock broken per man employed underground did not
exceed the rate of 300 tons a year. In the large mines it has now,
after some eight years, attained 600 to 700 tons.

How far intelligence is a factor indispensable to skill can be well
illustrated by a comparison of the results obtained from working
labor of a low mental order, such as Asiatics and negroes, with those
achieved by American or Australian miners. In a general way, it may
be stated with confidence that the white miners above mentioned
can, under the same physical conditions, and with from five to ten
times the wage, produce the same economic result,--that is, an
equal or lower cost per unit of production. Much observation and
experience in working Asiatics and negroes as well as Americans
and Australians in mines, leads the writer to the conclusion that,
averaging actual results, one white man equals from two to three
of the colored races, even in the simplest forms of mine work such
as shoveling or tramming. In the most highly skilled branches,
such as mechanics, the average ratio is as one to seven, or in
extreme cases even eleven. The question is not entirely a comparison
of bare efficiency individually; it is one of the sum total of
results. In mining work the lower races require a greatly increased
amount of direction, and this excess of supervisors consists of
men not in themselves directly productive. There is always, too,
a waste of supplies, more accidents, and more ground to be kept
open for accommodating increased staff, and the maintenance of
these openings must be paid for. There is an added expense for
handling larger numbers in and out of the mine, and the lower
intelligence reacts in many ways in lack of coördination and inability
to take initiative. Taking all divisions of labor together, the
ratio of efficiency as measured in amount of output works out from
four to five colored men as the equivalent of one white man of the
class stated. The ratio of costs, for reasons already mentioned,
and in other than quantity relation, figures still more in favor
of the higher intelligence.

The following comparisons, which like all mine statistics must
necessarily be accepted with reservation because of some dissimilarity
of economic surroundings, are yet on sufficiently common ground
to demonstrate the main issue,--that is, the bearing of inherent
intelligence in the workmen and their consequent skill. Four groups
of gold mines have been taken, from India, West Australia, South
Africa, and Western America. All of those chosen are of the same
stoping width, 4 to 5 feet. All are working in depth and with every
labor-saving device available. All dip at about the same angle and
are therefore in much the same position as to handling rock. The
other conditions are against the white-manned mines and in favor of
the colored. That is, the Indian mines have water-generated electric
power and South Africa has cheaper fuel than either the American or
Australian examples. In both the white-manned groups, the stopes
are supported, while in the others no support is required.

=======================================================================
| Tons of | Average |Tons |
| Material | Number of Men | per |Cost per
Group of Mines | Excavated | Employed | Man | Ton of
|over Period|---------------| per |Material
|Compiled[5]|Colored| White |Annum| Broken
----------------------------|-----------|-------|-------|-----|--------
Four Kolar mines[1] | 963,950 | 13,611| 302 | 69.3| $3.85
Six Australian mines[2] | 1,027,718 | -- | 1,534 |669.9| 2.47
Three Witwatersrand mines[3]| 2,962,640 | 13,560| 1,595 |195.5| 2.68
Five American mines[4] | 1,089,500 | -- | 1,524 |713.3| 1.92
=======================================================================

[Footnote 1: Indian wages average about 20 cents per day.]

[Footnote 2: White men's wages average about $3 per day.]

[Footnote 3: About two-fifths of the colored workers were negroes,
and three-fifths Chinamen. Negroes average about 60 cents, and
Chinamen about 45 cents per day, including keep.]

[Footnote 4: Wages about $3.50. Tunnel entry in two mines.]

[Footnote 5: Includes rock broken in development work.

In the case of the specified African mines, the white labor is
employed almost wholly in positions of actual or semi-superintendence,
such as one white man in charge of two or three drills.

In the Indian case, in addition to the white men who are wholly
in superintendence, there were of the natives enumerated some 1000
in positions of semi-superintendence, as contractors or headmen,
working-gangers, etc.]

One issue arises out of these facts, and that is that no engineer
or investor in valuing mines is justified in anticipating lower
costs in regions where cheap labor exists.

In supplement to sheer skill and intelligence, efficiency can be
gained only by the application of the man himself. A few months ago
a mine in California changed managers. The new head reduced the number
employed one-third without impairing the amount of work accomplished.
This was not the result of higher skill or intelligence in the men,
but in the manager. Better application and coördination were secured
from the working force. Inspiration to increase of exertion is
created less by "driving" than by recognition of individual effort,
in larger pay, and by extending justifiable hope of promotion. A
great factor in the proficiency of the mine manager is his ability
to create an _esprit-de-corps_ through the whole staff, down to
the last tool boy. Friendly interest in the welfare of the men
and stimulation by competitions between various works and groups
all contribute to this end.

CONTRACT WORK.--The advantage both to employer and employed of
piece work over wage needs no argument. In a general way, contract
work honorably carried out puts a premium upon individual effort,
and thus makes for efficiency. There are some portions of mine
work which cannot be contracted, but the development, stoping,
and trucking can be largely managed in this way, and these items
cover 65 to 75% of the total labor expenditure underground.

In development there are two ways of basing contracts,--the first
on the footage of holes drilled, and the second on the footage
of heading advanced. In contract-stoping there are four methods
depending on the feet of hole drilled, on tonnage, on cubic space,
and on square area broken.

All these systems have their rightful application, conditioned upon
the class of labor and character of the deposit.

In the "hole" system, the holes are "pointed" by some mine official
and are blasted by a special crew. The miner therefore has little
interest in the result of the breaking. If he is a skilled white
man, the hours which he has wherein to contemplate the face usually
enable him to place holes to better advantage than the occasional
visiting foreman. With colored labor, the lack of intelligence in
placing holes and blasting usually justifies contracts per "foot
drilled." Then the holes are pointed and blasted by superintending
men.

On development work with the foot-hole system, unless two working
faces can be provided for each contracting party, they are likely
to lose time through having finished their round of holes before the
end of the shift. As blasting must be done outside the contractor's
shifts, it means that one shift per day must be set aside for the
purpose. Therefore not nearly such progress can be made as where
working the face with three shifts. For these reasons, the "hole"
system is not so advantageous in development as the "foot of advance"
basis.

In stoping, the "hole" system has not only a wider, but a sounder
application. In large ore-bodies where there are waste inclusions,
it has one superiority over any system of excavation measurement,
namely, that the miner has no interest in breaking waste into the
ore.

The plan of contracting stopes by the ton has the disadvantage
that either the ore produced by each contractor must be weighed
separately, or truckers must be trusted to count correctly, and to
see that the cars are full. Moreover, trucks must be inspected for
waste,--a thing hard to do underground. So great are these detailed
difficulties that many mines are sending cars to the surface in
cages when they should be equipped for bin-loading and self-dumping
skips.

The method of contracting by the cubic foot of excavation saves
all necessity for determining the weight of the output of each
contractor. Moreover, he has no object in mixing waste with the ore,
barring the breaking of the walls. This system therefore requires
the least superintendence, permits the modern type of hoisting,
and therefore leaves little justification for the survival of the
tonnage basis.

Where veins are narrow, stoping under contract by the square foot
or fathom measured parallel to the walls has an advantage. The miner
has no object then in breaking wall-rock, and the thoroughness of
the ore-extraction is easily determined by inspection.

BONUS SYSTEMS.--By giving cash bonuses for special accomplishment,
much the same results can be obtained in some departments as by
contracting. A bonus per foot of heading gained above a minimum,
or an excess of trucks trammed beyond a minimum, or prizes for
the largest amount done during the week or month in special works
or in different shifts,--all these have a useful application in
creating efficiency. A high level of results once established is
easily maintained.

LABOR UNIONS.--There is another phase of the labor question which
must be considered and that is the general relations of employer
and employed. In these days of largely corporate proprietorship,
the owners of mines are guided in their relations with labor by
engineers occupying executive positions. On them falls the
responsibility in such matters, and the engineer becomes thus a
buffer between labor and capital. As corporations have grown, so
likewise have the labor unions. In general, they are normal and
proper antidotes for unlimited capitalistic organization.

Labor unions usually pass through two phases. First, the inertia
of the unorganized labor is too often stirred only by demagogic
means. After organization through these and other agencies, the
lack of balance in the leaders often makes for injustice in demands,
and for violence to obtain them and disregard of agreements entered
upon. As time goes on, men become educated in regard to the rights
of their employers, and to the reflection of these rights in ultimate
benefit to labor itself. Then the men, as well as the intelligent
employer, endeavor to safeguard both interests. When this stage
arrives, violence disappears in favor of negotiation on economic
principles, and the unions achieve their greatest real gains. Given
a union with leaders who can control the members, and who are disposed
to approach differences in a business spirit, there are few sounder
positions for the employer, for agreements honorably carried out
dismiss the constant harassments of possible strikes. Such unions
exist in dozens of trades in this country, and they are entitled to
greater recognition. The time when the employer could ride roughshod
over his labor is disappearing with the doctrine of "_laissez faire_,"
on which it was founded. The sooner the fact is recognized, the
better for the employer. The sooner some miners' unions develop
from the first into the second stage, the more speedily will their
organizations secure general respect and influence.[*]

[Footnote *: Some years of experience with compulsory arbitration
in Australia and New Zealand are convincing that although the law
there has many defects, still it is a step in the right direction,
and the result has been of almost unmixed good to both sides. One
of its minor, yet really great, benefits has been a considerable
extinction of the parasite who lives by creating violence.]

The crying need of labor unions, and of some employers as well,
is education on a fundamental of economics too long disregarded
by all classes and especially by the academic economist. When the
latter abandon the theory that wages are the result of supply and
demand, and recognize that in these days of international flow of
labor, commodities and capital, the real controlling factor in
wages is efficiency, then such an educational campaign may become
possible. Then will the employer and employee find a common ground
on which each can benefit. There lives no engineer who has not
seen insensate dispute as to wages where the real difficulty was
inefficiency. No administrator begrudges a division with his men
of the increased profit arising from increased efficiency. But
every administrator begrudges the wage level demanded by labor
unions whose policy is decreased efficiency in the false belief
that they are providing for more labor.