Rise and Fall of the Contract System in the American Iron and Steel Industry

Abstract

This paper investigates the historical accounts of the ineffectiveness of the contract system in the US iron and steel industry during the second half of the nineteenth-century. The high rate of technological innovation, along with the extensive bargaining power of the old industrial crafts, made output-related pay so costly as to be unsustainable in the long run. A sliding scale, together with piece-rate pay, did nothing but exacerbate the labour problem.