Truck wages are wages paid not in conventional
money
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money ar ...
but instead in the form of
payment in kind
A payment is the voluntary tender of money or its equivalent or of things of value by one party (such as a person or company) to another in exchange for goods, or services provided by them, or to fulfill a legal obligation. The party making the ...
(i.e. commodities, including goods and/or services);
credit
Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a de ...
with retailers; or a
money substitute
A scrip (or '' chit'' in India) is any substitute for legal tender. It is often a form of credit. Scrips have been created and used for a variety of reasons, including exploitive payment of employees under truck systems; or for use in local c ...
, such as
scrip
A scrip (or '' chit'' in India) is any substitute for legal tender. It is often a form of credit. Scrips have been created and used for a variety of reasons, including exploitive payment of employees under truck systems; or for use in local c ...
,
chits,
voucher
A voucher is a bond of the redeemable transaction type which is worth a certain monetary value and which may be spent only for specific reasons or on specific goods. Examples include housing, travel, and food vouchers. The term voucher is also a ...
s or
token
Token may refer to:
Arts, entertainment, and media
* Token, a game piece or counter, used in some games
* The Tokens, a vocal music group
* Tolkien Black, a recurring character on the animated television series ''South Park,'' formerly known as ...
s. Truck wages are a characteristic of a truck system.
"Truck", in this context, is a relatively
archaic
Archaic is a period of time preceding a designated classical period, or something from an older period of time that is also not found or used currently:
*List of archaeological periods
**Archaic Sumerian language, spoken between 31st - 26th cent ...
English word meaning "exchange" or "barter".
Truck system
A truck system includes one or both of the following practices under which truck wages are used to defraud and/or exploit workers.
* Firstly, the truck wages are demonstrably of a lesser
market value
Market value or OMV (Open Market Valuation) is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with ''open market value'', ''fair value'' or ''fair market value'', although the ...
than the amount of money that would normally be paid for the same work.
* Secondly, truck systems limit employees' ability to choose how to spend their earnings. For example, credit or
company scrip
Company scrip is scrip (a substitute for government-issued legal tender or currency) issued by a company to pay its employees. It can only be exchanged in company stores owned by the employers.
In the United Kingdom, such truck systems have l ...
might be usable only for the purchase of goods at a monopolistic
company-owned store, at which prices are set artificially high. As long as the company store is the only party able and willing to accept scrip for needed goods, there is no meaningful competition to lower prices. Hence, a truck system relies on a closed economic system in which employees are required to become subject to a retail monopoly in essential goods.
Truck systems have been specifically outlawed in many countries by
labour law and employment standards; and
legislation
Legislation is the process or result of enrolling, enacting, or promulgating laws by a legislature, parliament, or analogous governing body. Before an item of legislation becomes law it may be known as a bill, and may be broadly referred to ...
such as the British
Truck Acts.
History
Britain
While truck systems had long existed in many parts of the world, it was widespread during the 18th and early-19th centuries in Britain. Despite a long history of legislation intended to curb truck systems (
Truck Acts), they remained common into the 20th century. In a prosecution brought against a
Manchester
Manchester () is a city in Greater Manchester, England. It had a population of 552,000 in 2021. It is bordered by the Cheshire Plain to the south, the Pennines to the north and east, and the neighbouring city of City of Salford, Salford to ...
cotton manufacturer in 1827 one worker gave evidence that he had received wages of only two
shillings in nine months; the rest "he was obliged to take
n goods
N, or n, is the fourteenth letter in the Latin alphabet, used in the modern English alphabet, the alphabets of other western European languages and others worldwide. Its name in English is ''en'' (pronounced ), plural ''ens''.
History
...
from the manufacturer's daughter, who was also the cashier".
In Britain the truck system was sometimes referred to as the tommy system. The 1901 edition of ''
Brewer's Dictionary of Phrase and Fable
''Brewer's Dictionary of Phrase and Fable'', sometimes referred to simply as ''Brewer's'', is a reference work containing definitions and explanations of many famous Figure of speech, phrases, allusions, and figures, whether Biography, historica ...
'' notes the tommy shop as:
Where wages are paid to workmen who are expected to lay out a part of the money for the good of the shop. Tommy means bread or a penny roll, or the food taken by a workman in his handkerchief; it also means goods in lieu of money.
In the "Midland Tour" of his ''
Rural Rides'', the agriculturist and political reformer
William Cobbett
William Cobbett (9 March 1763 – 18 June 1835) was an English pamphleteer, journalist, politician, and farmer born in Farnham, Surrey. He was one of an agrarian faction seeking to reform Parliament, abolish " rotten boroughs", restrain forei ...
reports the use of "the truck or tommy system" in
Wolverhampton
Wolverhampton () is a City status in the United Kingdom, city, metropolitan borough and administrative centre in the West Midlands (county), West Midlands, England. The population size has increased by 5.7%, from around 249,500 in 2011 United ...
and
Shrewsbury
Shrewsbury ( , also ) is a market town, civil parish, and the county town of Shropshire, England, on the River Severn, north-west of London; at the 2021 census, it had a population of 76,782. The town's name can be pronounced as either 'S ...
. He describes the logic of the tommy as:
The manner of carrying on the tommy system is this: suppose there to be a master who employs a hundred men. That hundred men, let us suppose, to earn a pound a week each. This is not the case in the iron-works; but no matter, we can illustrate our meaning by one sum as well as by another. These men lay out weekly the whole of the hundred pounds in victuals, drink, clothing, bedding, fuel, and house-rent. Now, the master finding the profits of his trade fall off very much, and being at the same time in want of money to pay the hundred pounds weekly, and perceiving that these hundred pounds are carried away at once, and given to shopkeepers of various descriptions; to butchers, bakers, drapers, hatters, shoemakers, and the rest; and knowing that, on an average, these shopkeepers must all have a profit of thirty ''per cent.'', or more, he determines to ''keep this thirty per cent. to himself''; and this is thirty pounds a week gained as a shop-keeper, which amounts to 1,560 l. a year. He, therefore, sets up a tommy shop: a long place containing every commodity that the workman can want, liquor and house-room excepted.
Although Cobbett sees nothing wrong ''in itself'' in the tommy system, he notes that "The only question is in this case of the manufacturing tommy work, whether the master charges a higher price than the shop-keepers would charge," but given the guaranteed market, Cobbett sees no reason why any master should ever abuse the system. However, in rural regions he notes the virtual monopoly of the shopkeeper:
I have often had to observe on the cruel effects of the suppression of markets and fairs, and on the consequent power of extortion possessed by the country shop-keepers. And what a thing it is to reflect on, that these shopkeepers have the whole of the labouring men of England constantly in their debt; have on an average a mortgage on their wages to the amount of five or six weeks, and make them pay any price that they choose to extort.
United States
One reason for the truck system in the early history of the United States is that there was no national form of paper currency and an insufficient supply of coinage. Banknotes were the majority of the money in circulation. Banknotes were discounted relative to gold and silver (e.g. a $5 banknote might be exchanged for $4.50 of coins) and the discount depended on the financial strength of the issuing bank and distance from the bank. During financial crises many banks failed and their notes became worthless.
[ ''How Gold Coins Circulated in 19th Century America'' David Ginsburg](_blank)
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]
Australia/New Zealand
The chorus of the sailing song "The Wellerman" references Weller Bros., an Australian whaling supplier that paid in goods rather than money to the workers at their whaling stations in New Zealand
Whaling is the process of hunting of whales for their usable products such as meat and blubber, which can be turned into a type of oil that became increasingly important in the Industrial Revolution.
It was practiced as an organized industry ...
:Soon may the Wellerman come
To bring us sugar and tea and rum.
Some day, when the tonguin' is done, tonguing" = breaking up and processing captured whales
We'll take our leave and go.
The subtext being that "some day" never comes, because without wages, the workers could not afford their passage back home.
Relationship with company towns
Truck systems often existed in tandem with company towns (communities owned by an employer for the purpose of housing workers), which usually contained company stores. However, a truck system is not a prerequisite for the existence of a company town or vice versa.
Truck systems often persisted in long-settled, densely populated areas which hosted many employers and many merchants nominally in competition with one another. In such areas, their existence depended on the ability of employers to pay employees in scrip exchangeable at a company store. Such arrangements meant that potential nearby competitors were not typically in a position to accept the scrip at their stores (or at least not at a competitive exchange rate) since even if the company issuing the scrip was willing to accept it from non-employees, it would only accept it in exchange for goods at company-mandated prices. In this regard, employers' policies regarding the transferability of their scrip ranged from a willingness to accept it from anyone bearing it regardless of his or her relationship with the company (least restrictive) to refusing to accept scrip from anyone except the person it was paid to (most restrictive). The less restrictive the policy, the greater the potential workers paid in scrip could exchange it (likely at a discount) for goods and/or services the company store was unable (or unwilling) to provide, or for cash to obtain those goods and services. Indeed, one justification often given by employers for paying in scrip was that it supposedly prevented their workers from spending their earnings on "immoral" goods and services such as alcohol
Alcohol most commonly refers to:
* Alcohol (chemistry), an organic compound in which a hydroxyl group is bound to a carbon atom
* Alcohol (drug), an intoxicant found in alcoholic drinks
Alcohol may also refer to:
Chemicals
* Ethanol, one of sev ...
and prostitution.
On the other hand, a company town in a remote area with both the ability to keep any potential competition for company stores out and an ample supply of cash might be able to exploit workers in a manner similar to that of a truck system without actually employing a truck system. If the company store is the only vendor to which employees in a remote location have reasonable access to obtain goods, then such a company is in a position to pay wages in cash while charging inflated prices (also in cash) at the company store.
See also
* Company store
A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared ...
* Company town
* Wage slavery
Wage slavery or slave wages refers to a person's dependence on wages (or a salary) for their livelihood, especially when wages are low, treatment and conditions are poor, and there are few chances of upward mobility.
The term is often used ...
* Debt bondage
Debt bondage, also known as debt slavery, bonded labour, or peonage, is the pledge of a person's services as security for the repayment for a debt or other obligation. Where the terms of the repayment are not clearly or reasonably stated, the pe ...
* Truck Acts
* Statare
''Statare'' were contract-workers in Swedish agriculture who, contrary to other farmhands, were expected to be married, were provided with a simple dwelling for their family, and instead of eating at the servants' table were paid in kind with foo ...
- Sweden
* Coal scrip
References
;Notes
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{{Employment, state=collapsed
Wages and salaries
Payment systems