Evening star., 1931-04-03
WAGE LEVELS SEEN
AS POLITICAL ISSUE
Administration Uses InfIu-
ence to Prevent Cut, Held
Necessary by Companies.
BY DAVID LAWRENCE.

An interesting difference of opinion
between the administration and industry
about wage levels promises to develop
into q major political problem.
Last Fall President Hoover summoned
the leaders of industry and urg,d them
to maintain wage levels. Most of them
tried to do it, Now. however, in the
face of pressure from stockholders for
a creditable showing and with markets
declining, most companEs feel con-
frontsd with the necessity Of making
economies on pay rolls.
The administration is using all the
influence it can to prevent wage cuts.
The theory here is that purchasing
power can bet be maintained II COM
panies do not make wholesale reduc-
tions in wages. Representative Wood,
chairman of the Republican Congress
sional Campaign Committee, told cor
RESPONDENTS at the White House that
while he had not discussed the subject
with the President. he felt that exist
ing wages would have to come down or
else commodity prices increased.
Wage Above Selling Level,
"The wage level in this country, said
Representative Wood, "is far above the
selling level of commodities, How that
is to be adjusted is a problem. Those
things naturally adjust themselves alt-
er a while lust like water seeks its level.
Where a corporation has plenty >of
reserves and can maintain wage leVe-s
during the present depression admins
tration officials feel there ought not 10
be any reduction On the other hand, II
is recorntzed that many companies do
not have the reserves and that 1t Is
case of cutting wages in order to keep
1,n factory operations at all. IN many
instances pay roll cuts have been aVolu-
ed. but the days of work and hours
have been reduced.
Politically Significant.
The most the administration can nope
10 accomplish is to prevent psycnolosy
of general wage reductions, wnlcn II Is
believed would be fatal just at time
when there are signs that the low
point in the depression has been passed
The spectacle Of the Republican ad-
ministration urging industry TO keep
nm wage levels is politically signlncant
and is in line with what the American
Federation of Labor has been urging
business to do for some time. In fact,
drastic cuts in the early part OF 1880
in businesses which might have main
tanned wage levels are regarded as hav-
ing contributed materially to the drop
in purchasing or consuming power,
which in turn has adversely affected re-
tail trade.
Changes Are SpOtty.
The argument being used in favor Of
wage cuts is that the prices Of food and
other commodities have come down TO
such q point that old wage levels have
in some instances really represented
wage increases. The dificulty, Of course,
il that there is no way Of measuring
the effect Of low commodity prices on
the individual budget, particularly since
the changes are Of a spotty character
Undoubtedly the pressure to reduce
wages has begun with the financial IN
terests of the country which are seeking
to produce better balance sheets on the
part of those who have borrowed money
from the public or from the banks. 1t
is q question how far the Governments
influence, exercised by the President
will counteract the quiet but steady
movement on the part Of industry to
attain lower wage levels
tCopyright. ls3l)