6

Formal jobs of the present day pay primarily cash wages, but a great number of historical employees earned primarily food, housing, goods from a company store, scrip, or debt repayment.

These non-cash payments could occur in the context of coercion; consider the many slaves and indentured servants who were and are obligated to pay for an inferior room and board. They also appear among volunteer employees in frontier economies, which are often somewhat closed.

In what circumstances have noncash wages appeared? How have employers justified the practice? Have they been a source of labor unrest?

closed as too broad by Alex, SJuan76, Mark C. Wallace, Columbia says Reinstate Monica, KorvinStarmast Dec 26 '16 at 5:34

Please edit the question to limit it to a specific problem with enough detail to identify an adequate answer. Avoid asking multiple distinct questions at once. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.

  • 3
    They've been a fair source of unrest at various contexts. In 1955, the song "Sixteen Tons", sung by "Tennessee Ernie" Ford, hit the top of the popularity charts. It had been written and recorded in 1946 by Merle Travis as a protest against the conditions for coal miners in Muhlenberg County, Kentucky. "Y'load 16 tons and what d'ya get? Another day older, and deeper in debt. St. Peter don't y'call me because I can't go: I owe my soul to the company store" – MMacD Dec 25 '16 at 15:03
  • One might consider including as "in kind" employee discounts for goods produced or sold by the employer. – bgwiehle Dec 25 '16 at 16:14
  • 1
    In fact, any management book today says things to the tune of "to retain employees, above a certain level cash alone is not enough, you need non-cash compensations (from parking spots to promotion options to formation courses etc.)" Also, in many jobs payment in kind is still normal (employees of a restaurant eating there, fishermen getting by-catch to sell themselves of to feed themselves with, etc.) You need to be more specific. – SJuan76 Dec 25 '16 at 16:30
  • Payment in scrip, at least, and probably goods from the company store as part of wages, were specifically outlawed in Britain by the Truck Acts. – Tim Lymington supports Monica Dec 25 '16 at 22:32
7

As it happens, I'm getting partly paid in food today. There is a system to record how often I go to the staff canteen, and the next month that is deducted from my payslip. Of course that's only a small percentage of the total. And I'm not really forced to go to the canteen, if I don't go there nothing is deducted. But there are days where the schedule makes buying lunch elsewhere impractical.

In addition, there is free coffee and tea. That isn't tracked on an individual basis, but it gets mentioned during hiring interviews, so it could be seen as part of the total compensation package.

A colleague of mine once worked in a company where part of the "compensation package" for overtime was that the employer would hire a cleaning service for the employee's housing -- he wanted them in front of their computer screen, not doing the laundry at home.

So there are two extremes, and a big gray area in between:

  • The company provides services as a benefit for valued employees. They do so to retain the goodwill of those employees, and to get the most out of the skilled work of their employees. It does not pay when a lawyer or a programmer brews his own coffee, have someone with a lower hourly rate do it.
  • The company wants to exploit the workers by selling overpriced goods. That seems to be the focus of your question.
  • 6
    All the free stuff on the Google Campus is a good example of this. You can drop off your laundry, exercise, get your groceries delivered to your desk, you can drive to and from work in a Google-sponsored bus with high-speed WiFi. All this is, of course, to discourage you from going home, and to allow you to work even on your commute. – Jörg W Mittag Dec 25 '16 at 12:45
  • @JörgWMittag: I believe there are also the tax benefits. These benefits-in-kind (easily worth thousands per year) may avoid taxation in the convoluted US tax system. – Kenny LJ Feb 1 '18 at 9:24
7

In the US rail road workers were often paid in such a way that their earnings usually got devoted to their food and board. In todays terms it would be like getting $500 a week but having to spend $495 at the company canteen (usually because there was no other option). Yes it did create some unrest, but not much.

Another example (on the other end of the spectrum) was ranch hands, and cattle drivers. They were often "paid in kind" by having to pay for their food and shelter, among other things. In today's terms it would be like getting a $500 pay check but having to spend $400 on the tools and food you need to get that pay check. There was generally little unrest because it was a life style choice. You got to "live on the open range", and that why you became a ranch hand.

The CCC (civilian conservation core) among other early "welfare programs" also had a way of "paying in kind". They would pay the parents of the kids $25 a week, and the kids would pay room and board, food, and other things from a canteen with their "share" of their wages. They had little extra cash after common things were bought like snacks, smokes, and sundries. In todays terms it would be like getting a $500 pay check sending $400 home and using $75 to stay at a public dorm, and $25 to buy slim-jims and deodorant. Unrest in this program was unheard of. It was generally well received as a great was to educate late teens, that would have otherwise gone homeless, become illiterate, or died. As it was depression era, steady work of any kind was a blessing, and for most involved the educational benifits (basic math and reading) would have been totally out of reach otherwise.

There are a few plans like the CCC in place today. Not focused so much on kids as alternates to welfare and homelessness for adults. Usually focused on mental conditions, drug issues, and other situations where "a hand up" is better then "a hand out". Some are privately run, some are state sponsored. As for labor unrest, generally not, as the people involved are trying to put their lives back together.

6

After the political collapse of the Soviet Union came the crash of its industrial system. As a result, for some time during the 90s many workers were paid in kind. Here's a description:

Starved for cash, factories reverted to paying workers and paying off debts to other factories in kind. Therefore, in many areas of Russia a barter economy emerged as both factories and workers tried to accommodate themselves to the economic crisis. Moreover, debts between factories were enormous; though they were diligently recorded, there was little hope of eventual collection. Thus, it was not uncommon for workers to go months without being paid and for workers to get paid in, for example, rubber gloves or crockery, either because they made such things themselves or because their factory had received payment for debt in kind.

Source

3

Kampuchea (Cambodia) in 1975-1979 under the Khmer Rouge.

Cambodia was a cashless nation; the government confiscated all republican era currency. Shops closed, and workers received their pay in the form of food rations, because there was no money in circulation. (Source.)

  • Doesn't that mean that food became the de facto currency? – Felix Goldberg Dec 26 '16 at 7:18
2

In Debt, the first 5000 years Graeber talks about how in England and Scotland for much of the 1800's, cash payments to manufacturing employees were irregular. To get them through months of non-payment, Graeber says people were expected to steal scrap and the the product of manufacture in order to get by.

Meanwhile, tavern owners, grocers, and others have to put most of the purchases by employees on a tab. The lack of cash in society was ameliorated by strong relationships.

When regular cash payments started in earnest in the 1900s, employers stopped looking the other way and security increased, preventing the "theft" of scrap and manufactured products.

Not the answer you're looking for? Browse other questions tagged or ask your own question.