The Bozeman courier. (Bozeman, Mont.) 1919-1954, 1924-06-25
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WAGES AND COST
OF LIVING
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The continued advance in wage
scales during the last year has been
che Of the most peculiar, and at the
same time one of the most significant,
business developments of the period,
states the current issue OF the Guar
anty Survey, published in New York.
This advance has preceded in spite
of the general industrial recession and
declining price level which charact-
erized the greater part of the year.
Considered in connection with the
changes in business activity, COM
modify prices and the cost of living,
the fluctuations in wage scales throw
a strong light on the broader aspects
Of the general economic situation.
During the greater part of the
period since the spring OF 1923, it
should be noted, the trend of the gen.
eral level of commodity prices has
been distinctly downward. Such a
trend is commonly characterized by
narrowing profit margins, smaller
trade volume, and reduced demand
for labor. with a consequent decline
in wage levels.
The popularity of the situation dur
ing the last year lies largely in the
relation between the movements OF
different groups of commodity prices.
the Survey says, which has been such
as to prevent a general drastic reduc-
ton of profit margins. While wage
levels, representing one importan'
group Of costs, have been high, tbs
prices Of raw materials and Other
producers goods, representing another
group of costs, have declined VIII
relative rapidity.
Moreover, it must be remembers
that wages, which are a part OF pro
d@uction costs on the one hand, repre-
sent consumers purchasing power OF
the other: so that high wage levels
while tending to restrict profits, d
the same time aperate to stlmula1
: consumers demand and to sustain
large volume of trade. 1t appear
:, that this tendency has made ltse'
felt during the last year. The recor,
of sales at retail, the amount OF rall
road freight traffic, and the genera
. evr,roes of retail commodity price
: lend support to this conclusion.
The real wages of industrial work
ers-that is, wages expressed not l
terms of money, but in terms OF VIVA
they will buy of the commoditle
which commonly enter into living eN
penses-are at the present time my"
or than they have ever beer oeio,'
pxcept possibly for one or two mont
in the spring Of last year.
Although it is the practice IN som !.
establishments to regulate wages /
oooordance with fluctuations in EvlD
costs. the general movement OF way
~scoles is governed by other factor'
The demand for labor is determine
Inv the profits which can be reaiize
through it's employment. These Pr
fits depend on the margin De'"eI
costs and selling prices and on -
volume of trade. Except in a Vel
lonp-term view, therefore, the e.
nlanation of the course OF wages
20 he found in the movements Oh con
modify prices as. factors in -busin :,
nro6ts.. rather than as items IN i
cost of living.
Need of Readjustment
Il is apparent that the present co. ,
e;ctinp tendencies can not go on -
definitely. With commodity pfi. :,
declining and wage levels rising, :
cost Of labor is becoming an increr
;nglv important factor in the ~
rate prices of consumers goGO
This fact is reflected in the grown