The Washington herald., 1920-12-10
WAGE. and Production.


1t would seem that few fully realize the tre-
mendous advance made in settling the problem of
labor's relation to industry by the recently an
nounced program of the American Federation of
Labor and the terms of settlement of the coal
strike in Great Britain Jointly these have sig
nifeance that is Of the utmost importance.
The war fixed the cost of living major
factor in establishing wage scales. Great Britain
was first to recognize this by formally Using it as a
wage basis for sliding scale, as the price of the
basic list on which the cost Of living is estimated
should go up and down. This not so formally,
but quite as conclusively adopted in this country
until wage scales and living costs became COM
panions, it were, in the misery OF the consum-
ing public.
= Gradually the reaction of the upon the
other came to be appreciated. The cost of labor
is large element in the price of things. this
being estimated as high as 70 per cent, that it
was found that every wage increase was almost
at once reflected, if not exaggerated in prices. so
that an increased wage brought only partial relief
to the workers and greatly increased the burdens
to the innocen: bystandcrs
Moreover, it was found that as wages went
up, labor production actually went down, until at
last the American Federation went on record for
mally by declaring that the cost of living relief tor
workers lay father in increased productonI than in
increased wage scales. At almost the same time
the coal miners returned to work at an increased
wage tied to an agreement that the price OF coal
should remain stationary but also recognizing pro-
duction tonnage as the deciding element OF any
further increase in wage.
So it is that for the first time organized labor
in the two greatest industrial Countries recognizes
production as basic element in fixing the pay OF
workers. This seems so simple and SO obvious
that the wonder may we'll be tha: it has waited
so long, and it should be received with an adequate
appreciation of its importance, for the fact is, that
labor has heretofore steadily refused to recognize
or acknowledge this interdependence of produc-
ton and wage.e
The American Federation took still another
decisive step in a concerted effort to rid itself of
the radical element that has sought to force it
close to communism by boring from withn." !"
This same movement is in other countries. Organ
lied labor has been discredited by these men of
glib tongue and of little conscience, who have used
famboyant oratory to smother common sense.
To a large extent those of much speech and
little morals have been able to mislead labor, driv-
ing it away from its wiser, more conservative
leadership, forcing it into lawless, unsanctioned
strikes, the breaking of formal contracts and max
ing agreements with the recognized agents OF
unions but scraps of paper.
Now the turn has come and with it the oppor-
tunty in cooperation With the broader minded,
less prejudiced employers to confirm this po-
sition of organized labor and establish that pro-
duction shall be conclusvely element in wage
scales and making contracts with unions de-
pendable between business men. The loss to
industry through the at least quascontrol of labor
by the radicals, has been enormous. To end this
would be equal gain. - -.---i -bv't
1t this newer policy which led Mr.. Paul
Warburg, his recent return from Europe, to
n
countries lay in organized labor and that it in
combination with the broader minded, less hide
bound employers, would become the controlling
force of the future
Mr. Warburg not be classed labor
sympathizer, as inclined to Socialism or other
than smon-pure capitalist. His observations
were those of a man concerned chiefly with inter
national credits and his conclusions are to be
weighed with that in mind.