Page:Profit Sharing in the United States.djvu/2

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THE AMERICAN JOURNAL OF SOCIOLOGY

profits of the business in which it is employed. Benefits of various kinds, as insurance, schools, libraries and beautiful surroundings, so long as maintained by employers out of their profits, and enjoyed by employes as an addition to what their wages would purchase, would have to be regarded in a strict analysis, as an indirect form of profit sharing."[1] Mr. Gilman gives this more restricted definition: "The method of rewarding labor by assigning it a share in the realized profits of business in addition to wages."[2] From the point of view of the Association for the Promotion of Profit Sharing, such a definition is acceptable; for its purpose is to encourage the multiplication of any such variations as may alleviate the existing evils of the industrial system. All such variations are to be encouraged in the hope that the one may be discovered, and in the belief that every such modification is an immediate benefit. But for the purpose of a purely objective estimate, such a definition is inadequate. It is the use of terms, not the motive, that is criticised. Nothing is to be gained, either from a scientific or a business point of view, by estimating indiscriminately, profit sharing, gain sharing, indeterminate bonus, labor insurance, stock holding by employes, percentage on sales, product sharing and similar forms. Nor is it possible, with such a vague basis of classification, to draw the line between those forms and progressive wages, sliding scales and similar forms until the wage system, so far as it is above a subsistence wage, is included. So much in justification of the use of terms in the present article. Profit sharing, as here understood, is an arrangement under which both employers and employes receive, in addition to their wages, a predetermined share in the profits. This is the meaning of the term as defined by the International Congress of Profit Sharing at Paris in 1889.

So much that is written concerning profit sharing, in any interpretation of the term, is purely a priori discussion, that the most of this paper will be given to a statement of the experience in the United States, preliminary to a further discussion of the

  1. Carroll D. Wright in the Seventeenth Annual Report of the Massachusetts Bureau of Labor, p. 152.
  2. Profit Sharing between Employer and Employé, p. 8.