The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-09-24
The Wage Cuts

Every intelligent citizen from President Hoover
on down will regret the wage cuts announced IN the
steel automobile copper, rubber and other industries
All that the President and others have been saying
in recent years about the economic advantage OF
wages high enough to balance consumption with pro-
duction is as true today as ever.
Production overshot itself Consumption failed
to keep pace Instrumentation of wealth resulted
Had wages, which represent consumption been
higher in the good years. and more of that vast &C
emulation of capital distributed through spending
channels instead of powed back into produc-
tion we would not be in present fix. High wages
create prosperity for both capital and labor.
But merely to blame these employers for the an
nounced wage cuts will get nowhere 1t is not
so simple that.
In time of sickness. painful and dangerous opera
ton often is necessary. American business is sick
Was this operation necessary?
The answer to that question depends on other
questions, including the following: Had these cor
poratons exhausted their reserves, are they pro-
tectng stockholders at the expense of labor? During
the period did they rob their labor reserve fund
assuming they had such. fund-to pay excessive
dividends to add to already overexpanded pantsP
Was the old wage an adequate wage and does the
decrease thus merely balance the costof-livng cut,
or was the old wage inadequate, meaning that the
decrease creates a starvation wage?
Most of these questions in the case of most of
the corporations involve factors which neither
labor the public has complete information. More
over, they involve factors over which neither labor
nor the public has control.
Under American system in times of crisis
capital exercises dictatorship There is no pro-
vision for the other interested partiesabor and the
consuming public-to share in the decisions which
make or break the prosperity of the country.
Therefore, the fault is not so much with the in
dividual power with the system which forces him
to meet cut-throat competition and to think first of
larger immediate dividends rather than of the in
terests of the industry of labor and of the country
When dog-eat-dog system precipitated the
depression President Hoover and others that the
only way to check the catastrophe was to maintain
employment and wages. Both efforts have failed
Unemployment is widespread and wage cuts are
widespread
Employers as a whole are not to blame. The best
employer is forced finally, matter of sheer bust
ness survival to the level of his most INSCRIPTIONS
competitor; he is forced to lay off some and
to cut wages of others.
Today there are employers all over the country
who have been holding out against layoffs and wage
at tremendous cost themselves and their bust
ness
Heroic as have been the efforts of those enlight-
ened business leaders and of the Hoover administra-
tion the last two years have proved that such hero
ism and good intentions are defeated by the very
nature of our chaotic business system itself.
We believe there is no cure except through basic
reorganization to stabilize whole industries units.
We believe that some such revolution in our bust
structure outlined recently in the imperfect
Young plan. must come; that the system which
virtually forces these depressions, wage cuts and
unemployment rapidly is destroying itself by its
ineficency.
But we believe that any new system, to be effec-
tive must be form Of industrial democracy in which
labor and the public share with capital the response
blity and power to stabilize prosperity.
To try to maintain employment and keep up
wages on a national scale during recurring depres-
sions of the present system, hopeless trying
to make water up hill. 1t can be done, butsnot
long
This is very disagreeable fact to face. But so
these wage cuts hard to face. The important
thing is that we learn our lesson