The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1929-06-28
SPENDING POWER OF WORKER is
KEY TO PROSPERITY

Every worker should be able to buy motor car.
He should be able to buy radio too and piano
and perhaps some day an airplane. His wages
should be large enough to permit him to buy these
and many other things over and above the bare
necessities of life because such wages assure the
continuance of prosperity.
This is today the generally accepted theory in
the world of big business 1t is being propounded as
orthodox by bankers as well by the chief execu-
tive of the American Federation of Labor. It's
latest expression comes from Lawrence Stern
Co., investment bankers of Chicago ard New York
According to Stern & Co., the increasing spend
ing power of American wage and salary earners is
the motive force that keeps our prosperity going.
AS long as this force continues to operate Ameri-
can prosperity is not likely to decline They say:
Economists are in substantial agreement that 1t
is production over and above actual necessities that
keeps the industrial machine revolving the high
gear of prosperity. When wages are high enough
10 enable the worker to buy motor car, then
motor car that would otherwise not have been
built is produced. And the production of that mo-
tor car helps make work and good wages possible
for score of other workers, who, in turn, spend
their surplus for additional goods, producing work
and wages for still more workers"
Some of the fundamental facts back of current
proper Judgment as to the future trend of the Sc
curity market as outlined by Stern & Co., are:
Real wages 20%6 to 2596 greater than before the
war; average weekly earnings of industrial work
ers 11796; of clerical workers 749o and of union
workers 141@o above prewar; individual income tax
returns for the year 1928-29 approximately $780,
100000 over the previous year; approximately l.
100000 wage and salaried workers with more thar
one billion dollars in stock; savings deposits VI
over Is billion dollars in five years
Among the facts cited as indicating the steadily
increasing standard of spending of the American
worker are: Volume of yearly residential construc
ton up about 5000 since 1920; 100000 passenger
automobiles purchased in 1928; 10 million electric
ally lighted homes; $2OOO,OOO,OO0 spent ANNUALLY
for amusements; billion dollars for vacations an
travel and another billion dollars for candy sof
drinks and chewing gum; $8O0,OOO,0O0 annual
for sport; two million washing machines and vacu
UNI cleaners purchased annually for America
homes; life insurance sales up 200@o since 1915
and important gains in the number of students al
tending high schools colleges and universities
In addition to compiling these statistics Stern
Co. questioned more than score of the importan
business and industrial leaders of the country.
without single exception" the report say
"they were agreed that high wages and improve
industrial relations were largely responsible fC
continued prosperity. Any attempt to reduce wage
generally they believe, would have bad reactio
the purchasing power and consequently upo
the prosperity of the country"
Without attempting to weigh all the facts offe
ed in this survey the vital question is whether Il
point of view represents the reaction of the employ
ing class to temporary condition or the begl
hing CT fundamental shift in social outlook. II
test Will come when the interests of profits elias
with attempts to raise still further the averae
purchasing power of American workers
Such a clash is sure to come. Fsrds move
bring the purchasing power of E1-opeac worke
to par With those in America may postpone Il
clash but the final result may be to make it worl
wide vhen it comes.