CAUSES OF DISCONTENT

Chapter I

THE PROFIT SYSTEM

Incomes and Cost of Living

One of the chief causes of discontent among citizens of this, the richest country in the world, arises from the inability cf millions of workers to earn enough to provide a decent living for their families. Exceptional individuals may rise to affluence, but the proportion of those who can not secure a competence remains about the same-one-third to one-half the wage earners engaged in manufacturing and mining and a large number of agriculturists, according to the report of the Commission on Industrial Relations.

Royal S. Copeland, United States Senator from New York, showed his appreciation of the danger when he said: "You don't realize the amount of discontent in this country. It needs only leadership. I myself could go out and raise an army which would smash the community. So long as this discontent is grounded on criminal tendencies, of course I am against it, but in so far as it is based on the unreasonable attempts of those in authority to get labor at whatever they want to give, I am heartily in sympathy with it. . . . The men in high places do rot inform themselves. . . . I am not in favor of a living wage; I am in favor of a wage which will give the workingman a few luxuries and a chance to let his children do better."

The Bureau of the Census estimated the population of the United States in July, 1924, as 112,078,611. The National Bureau of Economic Research estimated the population on January 1, 1925, as 114,311,000 and the total national income in 1919 at $66,000,000,000, which figure they have not yet revised. Assuming the total income in 1925 to be $70,000,000,000, there would be a per capita income of $612, or apportioning the amount among the 64,000,000 adults only, each would have $1,093, or among men only and the amount is $2,121, or among the 42,000,000 workers and their income would be $1.667 each.

An examination of statistics prepared by experts from various angles shows that the income of the average worker is less than $1,200, while the cost of living for the average American family is about $2,000. And as the man who attempted to cross

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a stream whose average depth was one foot was drowned, so families having less than the average income go under or are over head and ears in debt.

Wages in various trades

In large cities, due to the trades unions, skilled labor is paid $8, $10, $12 and $15 a day. These are the aristocrats of the labor world-a minority even of organized labor which comprises less than 3,800,000 of the 42,000,000 workers in the country.

The annual income of these men is not the daily income multiplied by 300, for many obstacles intervene, as will be seen later. In 1921 the Committee on the Elimination of Waste in Industry reported: "The building trade workman is busy on the average about 190 days the year, or two-thirds of his time."

The United States Department of Labor reported average wage rates in May, 1923, varying from 72.2 cents an hour for longshoremen to $1.321 an hour for bricklayers. This means an income for the lowest paid man of $1,154 if work is found for eight hours a day for 200 days, or $1,733 if 300 days are worked and $2,114 to $3,170 for the high-priced man. This Department reported an average wage of $1,300 for 1924.

The Department of Agriculture reports wages of farm hands, without board, as $675 in 1919-20; $779 in 1920-21; $520 in 1921-22; $501 in 1922-23 and $563 in 1923-24. In two of these years farmers earned nothing on their capital, and in the last two years less than 2 per cent a year.

The N. Y. State Department of Labor reported average earnings in factories in January, 1925, as $28.30 a week, which would mean an income of $1,472 if work were continuous, or $1,415 if work is found for an average of 50 weeks a year. In New York State women are paid about one-half as much as men, the average for men being $31.37 and for women $17.14 a week.

Wages in Illinois factories are slightly less than in New

York.

The U. S. Bureau of Labor Statistics reported the halfmonthly wages of bituminous miners in 1921-22 as $55.08 to $99.50. The U. S. Geological Survey reported that bituminous miners lost 84 days in 1920 and 134 days in 1921.

The same Department found wages in the lumber industry, 1923, varied from $675 to $956 a year.

Post Office clerks were paid an average of $1,554 in 1924, which President Coolidge said was $200 more than in other Government Departments. In March, 1925, Congress passed a second bill, the first raise having been vetoed by the President, increasing the pay from $1,400-$1,700 to $1,700-$2,000. This the President signed.

1,830,000 railroad employees received from $3.24 to $7.43 a day in 1923, of whom 608,198 received less than $4 a day. At least 389,494 received less than $900 a year.

The average pay of railway men in 1923 was $1,643.

The president of the Aluminum Co. of America, Secretary of the Treasury Mellon's company, stated during the 1924 political campaign that his company paid a daily wage of $3.36.

Considering all classes of industry, the estimate of the National Bureau of Economic Research of the average earnings of workers in 1918 was $1,078 and in 1921, $1,117. Since then there have been occasional increases but many reductions. One of the last remarks of Samuel Gompers before his death, in December, 1924, was an appeal to labor to resist wage reductions. The Department of Labor reported that in spite of increased employment aggregate wages were less in April, 1925, than in March.

Real Wages

In October, 1924, the cost of living, according to the U. S. Department of Labor, was higher than in 1913 by various percentages ranging from 54.5 in Portland, Oregon, to 81.7 in Detroit, the increase in New York being 73.3. The average for 19 cities was 67 per cent.

On January 1, 1925, Herbert Hoover, Secretary of Commerce, said: "The average wage in industry has been stable during the last year and remains around 100 per cent above pre-war, while the cost of living has maintained almost exactly the same level at the end of each of the last three years, 1922, 1923, and 1924—about 72 per cent above pre-war. Our labor, therefore, continues to enjoy the highest real wage in its history."

From this it follows that now, when labor is more prosperous than ever, the worker who receives $800 a year can buy only as much as with $465 in normal times, and the average

wage of $1,117 provides only as much as $650 before the war, while the $3,000 man can live only on a $1,745 scale.

Loss of Income

The U. S. Bureau of Labor Statistics estimates that there are 2,453,418 industrial accidents every year in the United States, causing a loss of more than 225,000,000 working days and a wage loss of more than $1,000,000,000.

The number of fatalities from accidents while working is over 20,000 a year. Some contractors have eliminated fifty per cent of the accidents by protective methods. Perhaps an additional 25 per cent could also be prevented.

The usual estimate of the average number of unemployed in the United States is 1,500,000, with the extreme of 5,000,000 in 1922; but a recent book issued by the Russell Sage Foundation reports a still more disastrous condition: "To conclude that, averaging good and bad years, from 10 to 12 per cent of all workers are idle all of the time is probably an understatement of the situation." The Foundation calculates the number gainfully employed as 42,000,000 and the wage and salaried workers as 31,000,000, so there are at least 3,000,000 workers unemployed at all times.

The report continues: "There is something which we are just beginning to recognize, a resentment on the part of the workers against an industrial situation in which such insecurity and uncertainty of employment are possible. It is not only unemployment but the fear of unemployment, the knowledge that any job is uncertain and insecure, subject to the fluctuations of economic change, which are responsible for much of our present industrial unrest."

Apart from idleness from lack of work, union men suffer from cessation of wages during strikes which they may or may not favor, but which are their chief defense against unfair conditions. Then there is loss from illness-about 8 days a year for each worker-during which time manual laborers are not paid as salaried workers are, though many diseases are the result of their occupations.

"The men and women are few who can long continue a search for work without developing a malignant inferiority complex. Nor can many who feel secure in positions confront an unemployed brother without secret recognition of their own superiority."-Stuart Rice, of Dartmouth College.

Hours of Labor

Long hours have been a cause of discontent. Until a few years ago it was customary for men to be employed 12 hours a day, often 7 days a week with occasional 24 or even 36 hour shifts.

Legislation has done but little to limit hours for men, and the courts have obstructed many attempts to limit hours for women and children. (See "Unconstitutionality.")

The federal government has an eight-hour law, as have a number of states, for public work. For workers handling trains there is an almost universal restriction to sixteen hours for a day's work, to be followed by at least eight or ten hours of rest. Telegraphers may be restricted to eight hours. The Adamson Law established eight hours as a basic day for pay, but the men work longer for extra pay.

The labor unions have shortened hours in several trades, and public opinion has forced large corporations to discontinue the 12-hour day, with certain exceptions. Reduction in pay has followed the shortening of hours, except where the unions were strong.

Employers who have finally conceded shorter hours have found the change economically profitable.

The Ford Motor Company described its experience when the work-day was shortened: "A certain group of men working nine hours under the old system assembled 750 radiators. The same group working eight hours under the new plan assembled 1,300 radiators. A group of men working nine hours under the old plan turned out 38 fenders. Under the new, working eight hours, the same men turned out 50 fenders. A group of 65 men working nine hours under the old system turned out 800 gas tanks. Under the new, working eight hours, the 65 men turned out 1,200. Hours were reduced, wages increased and cost went down."

The Colorado Fuel & Iron Co. resisted for twenty years the attempt to shorten hours, but a letter from L. M. Bowers, chairman of the board of directors, to John D. Rockefeller, Jr., states that after they saw that legislation reducing hours was inevitable they tried out the eight-hour day and found that it was economically profitable.