Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1922-12-23
KEEP COSTS
DOWN, ROGER
!. J .BABSON URGES
Statistician Warns Against
Fixing Wage At Top Of
( Wave =

Wellesley Hills, Mas, Dec. 81
Commenting OF the present scarcity
Of skilled labor In certain lines, Roger
w. Ba bison today Issued a distinct
warning to both executives and 'inves-
tors who would base future plans on
present conditions. I'LL,
THE last SIX months OF 1922 have
been marked by q scarcity of labor in
many lines" a. Mr.. Babson. par
tieularly conlmo labor and the skill
ed building trades. Employment con
ditions the country over have Ina
proved In these months. There has.
therefore, been a general tendency on
the par tot labor to seek increased
wages. and on the part of employers.
even when they did not see the way
clear to raise wages, to consent to
their sterilization at the present or
the preceding levels. This situation
Is likely to continue for the first, six
months Of 1923, going far enough to
cover the usual, wage settlements
which come up In the spring.
Employers. therefore, are going to
be confronted with demands which.
If granted. will of necessity mean in
creased production costs. In 1917
and 1918 we were in a similar posi-
ton. Labor was getting scarce; bus
mess was running along brisl1ly. and
the demand for increased wages was
lnsistent. At that time, my advice to
business men was. that they should
make terms with labor as quickly as
possible, SO as to keep their factories
costs were to be charged up to the
consumer. This advice, the business
men of the country cheerfullN. took,
even to the extent Of improving upon
1t. 81.
A the present time. my advice is
! directly opposite. Under no condi-
tons shrould wage rates be increased,
II 1t is at all possible to avoid It. A
wage rate, once established. Is a mill
stone o an employers neck. The
fundamental long swing tendency OF
wages and OF commodities Is down
ward. This present stiffening of con-
ditions Is blu an eddy in the main
stream. A yea from now, perhaps.
the lower price. tendency will again
be resumed. The employer who has
: allowed himself to be weighted down
with increased wage rates will find
himself at a disadvantage when the
downward tendency is again resumed.
If. therefore. you MAJ pay more
for your help. in order to secure la
Dor, and keep the peace continued
the statistician, do 1t by some kind
of a bonus which will be eliminated
automatically when the turn comes.
AS "AN ASAo SSu P1L5o AS SVO&o VII
to the public, but that time has gone.
The~public is not looking for goods at
any price; 1t Is looking for goods at
a lower price. and II your goods are
put into the market on the basis of In
creased production costs, they will not
n a ready sale. p
Furthermore. investors are RotnH
TO be extremely cautious about put
ting their funds into industrial enter
prises. They are going to ask a great
many perplexing and embarrassing
questions. First'among these 10 going
to be the question as to how far the
particular plant has got it's produce
ton costs down to a permanent level.
These questions are going to be asked
strictly from the divid end paying
basis. On all sides the proft-makinx
possibilities of productive enterprises
are going to be curtailed. Your nor
NAL margin of profit in the years Just
ahead of us is going to be very much
less than 1t has been for the last nve
years. Any element, therefore, which
tends to increase production costs il
going to add~to the embarrassment OF
your company. For this reason. in
vestors are going >to look beyond the
income and things of. like kind. They
are going to ask to see your wage
sheets and to demand information as
to how the, wage Levels under which
you are operating correspond with
those OF six months and q year ago.
This is a perfectly legitimate ques-
ton and upon the answer. to 1t. Will
depend not only thesprofts. which you
will make in 1923, but also the DIM
culties which Won will meet In OBJ.
talning money to finance your opera