Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-30
OPINION JUST|F|ES
ESSENTIAL PAY CUT
Depression Produces Spirit
of ReasonabIenesS on
Both Sides.
BY MARK SULLIVAN.

What may be loosely described as 0
prevailing rule of public opinion about
wage reduction is to the effect that re-
auctions are justified il dividends have
first been reduced or omitted, and If
after this action, business continues to
be done at loss. The spirit OF the rule
was put in words about two months
ago by Ex-President Coolidge, who said
1.-The principle has been recognized l..
that the wage earners hold q preferred
position in time of depression. Those
who have made this possible are en-
titled to a great deal of credit"
In number Of cases corporations
have first reduced dividends and also
reduced salaries and compensation OF
high-priced officials and employees. This
is what has now been done by the
United States Steel Corporation. In
the cases of other corporations who
have taken this double step several
months ago, it has been found that
thereafter, if wage reductions still
seemed imperative, such corporations
have been able to effect the reduction
without material objection from the
wage earners affected.
Spirit OF NeeOnculatiOns
The spirit Of reasonableness and con-
citation on the part OF both employers
and employees has been an outstanding
characteristic of this depression. There
has been practically no strike and no
serious example OF what IN past de-
pressions figured largely as Labor
troubles" In the depression Of the
early 1905, with which the present one
is commonly compared, there were riots
of extreme violence, especially at Chi
cago and Pittsburgh which led to the
calling out of Federal troops at the
former city and State troops at the
latter.
For the country's immunity from such
violence in the present depression. credit
is usually given to the policy on the
part of employers of not reducing wages
unless compelled to, and to recognition
of this policy by labor. In several cases,
wage cuts have been suggested volun-
tarily by the labor employed In local
plants. These were cases IN which 1t
was apparent that old rates Of wages
were the cause of such high price OF
output as to make it difficult to get or
ders for goods. The wage cuts were ini-
tiated by labor, or freely accepted by
labor, as a means of reducing cost OF
output and thus bringing about greater
volume of employment.
The motive in the minds Of many EN-.
ployers in making wage reductions and
of many employees in accepting them
voluntarily is to bring about lower cost
of production followed by greater vol
ume of business and therefore greater
volume of employment. Considerable
groups of labor have come to feel there
| Is no advantage in part-time work at q
high rate of wages compared to the pos.
sibility of full-time work at a reduced
rate The building industry Is one
| which. competent judges believe. is held
back from the possibility of much great
er volume by the high price of labor.
Understanding of 1899.
The understanding arrived at when
the depression began, in the Fall of
1929, to the effect that there should be
/ no general or immediate cutting Of
wages has been in large part the cause
of a conciliatory attitude on the part OF
labor It is recognized now that at the
time the understanding was arrived at
almost literally no one anticipated that
the depression would be rs long rs 1t
has proved to be. In the same spirit, 1t
is recognized that If, after nearly two
years Of maintained wages, employers
find it impossible to continue to operate
on the old wage scale except ut . loss,
wage reductions are not likely to be
resisted by the labor affected.
The understanding of the Fall of 1929
has had several wholesome Affects
which distinguish the present depres-
sion from preceding ones. One Is that
wages have generally been kept ct the
old rate until after the cost Of living
went down. The decrease in rents, cost
of food, cost of clothing and other fac
| tors in the cost of living since 1879 has
been, roughly, Is per cent. With such
reduction in cost Of living accom-
plished, wages can now 60 down In the
same proportion, where necessary, with
out rejoicing the real compensation d
labor at all.