The labor journal. [volume] (Everett, Wash.) 1909-1976, 1921-11-04
LOW WAGES AND
UNEMPLOYMENT
(From Common Cause, Aus
tralian Labor Paper

In this time of widespread unem-
plovment it is being industrlousiyI
circulated all round this misgovernedi
Continent that if the workers would
only be reasonable" and accept
lower scale of wages, unemployment
would very soon almost cease TO
exist.
Not only is this statement untrue,
but the very reverse is the case, Tor
general reduction in wages Wouid
throw thousands more out OF work:
There is a superficial appearance OF
reasonableness about this fallacy,
however, which causes many work
ers to swallow it as gospel truth;
therefore a little explanation be-
comes necessary. Apart from pure
lv local circumstances, the man
reason for unemployment is what IS
called reproduction"
Under our system of production
for profit, machine production OF
commodities under the wage system,
causes the average worker to pro-
duce from four to five times more
wealth, in the shape of goods or
commodities, than his wages will en-
able him to buy back.
The surplus belongs to the employ
ing class, who, out of this surplus
value have to find the taxation for
the upkeep Of the army, navy, police
force, magistrates, judges and other
non-producing functionaries, servit-
ors and satellites, who exist to pro-
tect or to pander to them.
The balance still remaining en-
ables the employing class to live in
luxury and enjoy all the good things
of life and still have a large amount
left over.
This they export when they can
find foreign market.
When, however, through any rea-
son, they cannot find profitable
market abroad, their warehouses and
factories soon become glutted with
the goods which many thousands of
the workers would like to obtain,
but cannot afford.
The consequence is that the fac
tories stop producing. or only work
part time, and their Glands" are dis
charged or put on half time.
This results in the purchasing
power of the working-class being
still further reduced, and by caus-
ing slackness in other industries,
causes still more to be thrown out
of work.
This, again, further lowers the
ability of the people to buy goods,
and so continues to widen the ever
growing circle of unemployment,
with all its accompanying evils of
destituton, misery, prostitution and
crime.
This position holds until the cap
italists and their satellites have used
up all the surplus. Then the pro-
cess starts off again on the old
vicious circle.
Now it is easily seen that the
bulk of the trade of any community
depends upon the general level of
prosperity of the working-class, be-
cause while the individual employer
spends much more in buying COM
modities, on the average, than the
individual worker, yet the workers
comprise such an enormous major
ity of the people that it is their ag-
gregate expenditure which maintains
trade and commerce.
If, therefore, the average wage of
the whole working-class could be re-
duced by, say, % per cent. (there
being no proportionate fall in prices)
it would have the same effect, eco
nomically, as if one quarter of the
workers were thrown out of employ
ment altogether; because it would
reduce thep urchasing power of the
community by that amount.
1t is clear, therefore, that lower
ing wages (prices remaining high
instead of curing the evil of unem-
ployment would immensely aggra-
vate it.
1t may be asked how unemploy-
ment is ever going to disappear, if
it re-produces itself in a vicious and
ever-growing circle, as herein set
forth.
The answer is that revival of
trade can only take place, either by
the recovery of the foreign markets,
the opening out of new ones, or
otherwise by the gradual absorption
of the accumulated commodities.
The all-important fact with which
the working-class is now faced, is
that as more and more countries be-
come industrially developed and able
to supply their own requirements in
manufactured goods, so do the for
elgn markets become ever fewer with
more manufacturing nations Compel
ing for their trade.
At the same time inventions and
discoveries are multiplying so rapid
ly that workers are being displaced
every day by some new labor saving
device.
In consequence the depression and
unemployment caused by glutted
markets becomes more and more fire.
quent, and lasts longer than in past
times. 1t is now that war plays
its part by mopping up an immense
volume of wealth, which has to be
replaced.
1t is easy to see from these plain
facts that the present system is
reaching the end of its tether.
That it is almost ready to collapse
even now cannot be denied.
That it will produce much desola-
ton and misery, and millions of
ruined lives in the process of decay
is absolutely certain, unless the
WOrklng-claSS ORGANIZES IN cciantif;o