Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1919-03-02
GENERAL PRICE
\ REDUCTION NOT
likely TO CONE
Cost Of Labor Is the
Deciding Factor, Says
the President of the
Paige Company.
By HARRY M. JEWETT,
President Paige-Detroit Motor Car
Co.

PRESIDENT Palge-Detrolt motor Gar
.... Co.
There never has been a time, per-
haps since the Civil war, when both
the manufacturer and the consumer
have been confronted with such an
interesting economic condition as
now prevails. Reduced to the sim
plest terms it is the relation of the
price of commodities to the price of
labor and it has been made fresh and
interesting because of abnormal
conditions brought about largely by
the war now happily concluded.
There is one question everyone
would like TO have answered: When
will the price of commodities fall?
The answer is: The cost of living
will fall when the price of labor
comes down.
The only way to get an intelligent
conception of the price of commod-
tiles and possibilities for the future
is to consider labor in its relation to
commodities. We are prone to forget
that more than 90 per cent of the
cost of any manufactured article is
represented in the money paid out
to labor. Labor is the governing
factor.
Same For Products.
The same thing is true of farm
products. The bushel of wheat that
formerly sold for 90 cents now
brings $2.26 because of the greatly
increased cost of production. Until
we have cheaper wheat it is idle to
think of cheaper -four or bread.
A ton Of iron ore in the ground is
worth rs cents. When it has been
mined, transported to the mill, con-
verted into steel, forwarded to the
machine shop and fashioned into
automobile parts, it is worth $1,500;
and practically every penny of the
enhanced value is a labor charge.
1t is quite evident therefore that
the cost of the labor must come
down before commodity prices can
be reduced. Such a reduction OF
the wage scale must be general-a
national movement-and the pro-
cess, as l see it, is going to take
a long time.
Prices Are Down.
OF course certain articles were
affected by war conditions and fic-
titious prices were put on them, but
since the armistice was signed these
have been reduced to competitive
prices regulated by the cost of
standard labor. For a further re-
duction in commodities the standard
price of labor would have to be re-
duced all along the line, or the
quality Of the goods lowered. Now
the standard price of labor as paid
in the United States today ! do not
think is in for a reduction for some
months to come.
These are the reasons why we re-
Gently announced that we had dehn-
itely fixed the prices of our Linwood
and Essex models at ST SIS andS2, $50,
respectively. We are convinced that
skilled workmen, the kind employed
in the manufacture of these cars,
will continue for some time to come
to receive the wages they are now
earning and We cannot look else
where than to labor for reduction
of our manufacturing costs unless
we change our standards as to the
quality of our product. This we do
not propose TO do. As a matter of
fact the situation is one to inspire
confidence and optimism, for just
so long as labor is kept busy at
good wages will business be good
and prosperity be the lot of all.