THE EMPLOYERS' VIEWP0IN1
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DN DRIVERS' WAGES
The Part Wages Play in Operating Costs: How They Have Increased as Compared with the Total, Increase in Operating Costs : The Determining Factor in Wage Increases
IN my article in-last week'sissue I summarized briefly the changes which have taken place in the wages paid to drivers of commercial vehicles, commencing with January, 1940, when the Road Haulage Wages Act first became operative, and coming right up to date. I showed that the total increase in all grades was 17s. ed. per week and that, -although according to the Ministry of Labour and National Service figures the cost of living had increased during the period named by 15 per cent., the gross increase in drivers' wages was 25 per cent. for Grade I, 271 per cent. for Grade II, and 30 per cent. for Grade III. The net. increase (calculated on the assumption, as I believe to be true, that the original wages scales agreed in 1940 were interim, and that
those of May, 1940. should be taken as a basis for comparison for the cost of living) is, for Grade I 17 per cent., Grade II 20 per cent. and Grade 111 23 per cent. If, therefore, it be reasonable to take the costof-living figures as a basis, and I do not necessarily agree with that, then the drivers of motor vehicles have been well treated, in so far as possible earnings are ccincerned.
I now propose to deal with the same subject, but to con sider it from the point of view of the employer, taking into.
account the fact that drivers' wages are a considerable
item in his total vehicle-operating costs and showing how -those costs are effected• by these recurring additions to his
wages bill.
Figures for a 6-tonner Which is Employed on Local Work
Taking the case of a 5-tonner, engaged on "local work, and referring to figures of -operating costs which were current prior to the war (therefore, also prior to the introduction of the Road Haulage Wages Act), I find that out of a total of £5 5s. per week standing charges 23 53. per week was paid in wages. The running costs per mile of a 5-tonner, at that time, were 51d., and if it covered 200 miles per week the total running costs were £4 7. eci. and the total operating costs, therefore, 29 12s, 6d. Wages were 34 per cent. of the total., , If I assume, for the moment, that no item of cost but wages has altered up to the present time and revised the figures accordingly, then I.must add RI Os. 6d. to the total of wages, thus increasing the total operating costs to 210 I3s., wages now being 42 per cent. of the total. The total increase in operating costs as brdught about by the additions to wages is approximately IN per cent.
It is reasonable, perhaps, to criticize the . foregoing, inasmuch as it is hardly fair to assume that wages would increase without any corresponding additions to the other items. It is logicalto assume that wages increases are brought about, to some extent, by the general increase in the costs of other items. On that basis, and revising the second set of figures, I get total costs of operation of 212 13s. 3d, per week. Wages comprise 331 per cent. of
the total. • The total increase in costs is 32 per cent., -which, curiously enough, is also the percentage increase in the 'rate of wages.
Comparisons with the 1938-39 figures, however, are not quite sound, for th6 reason that wages were not statutory at that time. A more useful picture of the effect of wages increases can be drawn if the period taken be that during which the Road Haulage Wages Act has been in force.
October! 1940, as a matter of fact, is a critical date, because there is aregulation •which insists that hauliers must not increase their rates by more than 71 per cent. of what they were at that time. The following calculations, therefore, compare conditions in October, 1940, with those of to-day.
In the figures which are included I have not tried to he absolutely accurate. The athounts are..correct -to the nearest shilling. I have not, in presenting what are cited as .to-day's figures, taken into consideration the much enhanced cost of tyres. The running • costs per mile are, therefore, short of what operators are to-day haying to pay. The approximations and the Omission to take extra tyre costs. into accouct do not, however, effect the achievement of my main purpose, as will become apparent.
I am not forgetting that, so far as many of my readers are, concerned, the subject is largely academic, because the wages of their drivers and statutory attendants are to-day being paid by the Ministry of War transport. I write in the belief, however, that-that state of affairs is likely to be of short duration. •
Now, to turn to our calculations. I will again take the case ofa. 5-tenner covering. 200 miles per week without there being any need` to exceed the 48 hours guaranteel week, so that the„sinestion of considering overtime dos not
arise. • In October, 1940, the driver's wages were 23 13s. out of a total standing charge of Re. Running costs were 6.66d. per mile and for 200 miles that is £5 1 Is., giving a total cost per week of £11 lie. Wages thus comprise 32 per cent. of the total operating costs.
To-day, the corresponding figure for wages is £4 5s. 6d. and the total standing charge is Re 1 Is. Running costs are .7.33d. per mile, so that the total is £6 2s., .giving us operating costs of 212 135. Wages, it should be eoted, now reach 37 per cent, of costs and the increase in total. operating costs, as between October, -1940, and to-day is shown as 10 per cent.
ft should be noted that the wages scales taken are those referring to Grade I, which have undergoee an increase of 17 per cent, as between October, 1940, and to-day. This compares with an increase of 10 per cent. in the opAator's expenditure per mile on his vehicles.
When a 5-tonner Covers only a.Small Weekly Mileage'
Now, take another case. it is a fairly accUrate.representation of one which I have recently been investigating. The operator uses a 5-tonner covering ,no more than 150 . miles per week, but, because of the high proportion of time spent in loading and unloading and in waiting at .terminals, the -must work his vehicles, and of course his ,drivers, for 60 hours per week. It is now, therefore, necessary to bring in the element of overtime.
Figures for 1940 first. On the basis of £3 13a; per normal week, the wages payable to a driver working 60 hours would total 24 14s. 4d., that is out of standing charges toialling 27. .Adding running costs, .150 miles at 6.6ed. per mile, brings the total operating costs .to £11, 43,, of which 42 per cent. is to be debited to wages.
To-day the basic wages are 24 5s. 6d. and the total for 60 hours £5 10g. ed. The standing charges amount to 27 16s. and the running costs, at 7.33d. per mile, to . RA 12s.; giving us a total of £12 8s, for operating costs, of which wages comprise no less than 44} per cent. That is to say nearly half this .operator's expenditure is on wages. I am not taking any exception to that, but merely stating it as a fact. The total increase-as between operating. costs ,to-day and. October, 1940, is 11 per cent., compared with a wages increase of 17 per cent. Take another case, of a similar vehicle engaged on sand and gravel haulage, covering 700 miles per week of 64 hours working time. In October, 1940, the basic wages were, as before, £3 13s.. per Week and the total for a 64-houP week £5 2s. The standing charges were £7 8s. and the running costs, 700 miles at 5,1c1. per mile, 215 •fis. 'The total operating costs were, thus, £22 14s., of which wages comprised 22+ per cent.
To-day,. driver's wages would amount to £6 per week for a 64-hour week and the total of standing charges would be 28 Ss. The running costs are 51d. per mile and for 700 miles that is £16 15s., giving total operating costs of 225, of which 26+ per cent, is wages. The increase
in operating costs is approximately 10 per cent. . The foregoing figures are set out in Table I so that comparisons may be more readily made..
The Maximum-load Four
wheeled Oiler on Trunk Service
Now, take a different tirpe of vehicle altogether, engaged on work of a riattire—trunk service—involving some additional consideration of items in the wages Orders which it has not, hitherto, been necessary to take into account.
Take first of all a 7-8-tonner—•-a maximum-load fourwheeled oil-engined vehicle on trunk service—covering 1,000 miles weekly, the working' hours averaging To per week.
In 1940, the standing charges involved in connection With the operation of sueti a vehicle totalled 27 10s., of which £3 13s. was the -amount of the drivers' wages— for a 48-hour week. The actual wages paid with overtime would be much more than this amount. It would be
that plus eight hours at time-and-one-eighth and the balance at time-and-a-quarter, approximating, as a matter of fact. to £5 14s. per week and bringing the total of standing charges, so far as we have gone, to £9 Hs.
Now for the other item in the wages .Order to which. I referred, that is subsistence allowance. In 1940, the allowance was 6s. per night, and if we assume that this particular driverwas, as is most likely, away from home three nights per week, his subsistence allowance would be 18s. and expenditure on that and sundry small expenses would amount to at least £1 per week. That increases our standing
charges to 210 Ils, per week. .
The running costs of this type of vehicle, at that time, totalled 5+d. per Mile and for 1,000 miles that amounts fo £22 19s., so that the total operating costs might be £33 Ws. per week, of which driver's fvages and subsistence Look 26 145., approximately 20 per cent.
To-day the basic wages are 24 5s. Gd. per week out of net standing charges of 28 6s. 6d., again for a 48-hour week, The actual wages, with provision for overtime, are £6 13s. and the provision for subsistence allowance is now 50 per cent. higher than it was in 1940, making 30s. per week instead of 21. The total of wages and subsistence allowance, therefore, is 28 3s. and the total standing charges aee £12 45. The running-costs per mile are 6d. and for 1,000 miles that is 225 per week, bringing the total 9perating costs to £37 4s., of which wages and subsistence form 22 per cent. ,
How the Figures are
Changed by Using a Trailer
Now, take the case of a similar vehicle hauling a trailer . and carrying 15 tons for a distance of 600 miles per week. For this class of work, of course, a statutory assistant is required and his wages, plus overtime, plus subsistence allowance, makes a considerable addition to the total operating costs.
I do not propose to go into such detail as in the previous example,s, but merely to state that the total of wages and subsistence ,allowance, reckoning that these two men each spend two nights per week away from home, is £12 2s. out of a -total of 218 for standing charges. The total . operating costs come out at-a total of £35 10s., of which • wages and subsistence allowances take the not inconsiderahleeproportion of 34 per cent.
To-day, the corre.sponding figures are £14 14s. for wages and subsistence out of total standing charges of £19 7s. Running costs amount to 220 13s., so that the total operating costs are £40 per week, of which wages again. form 37 per cent. of the total. The increase in operating costs as between October, 1940, and to-day 'amounts to
12+ per-cent. •
have also worked out the figures for an eight-wheeler on the sanie duty, assuming that a second man be employed. These, with the other figures for those vehicles which are engaged specifically on trunk services, are entered in Table II, which is reproduced on this page.
Comment on the figures in these tables is postponed for a subsequent article, which I am preparing for early publication. . S.T.R.