Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-03
BUSINESS BETTER,
SAYSLABOR SURVEY
Federation Warns Against
Naqe Reductions, However,
| in Monthly Issue.
Business is showing more resistance

-
: Business is showing more resistance
60 depression forces and fundamental
changes have been made for the better,
Che American Federation of Labor
states in its current issue Of its monthly
survey of business. At the same time,
however, it again issues fiat warning
against wage reductions.
The federation finds cheerful indica-
tions in the trends of business and en-
bloyment, but assails employers who cut
wages at this time, declaring they
would add a discouraging element just
when conditions are beginning 70
stabilize"
Referring to general conditions. the
survey bulletin finds that the Spring
season even brought slight advance
and that for the first time since the
decline began in July, 1929, indices OF
business activity have risen for two
months in succession.
1.-THE gains are too small to signal
the start of revival the bulletin adds,
"but they at least show that the de-
cline has been checked for another
month"
Season for Decline.
"The months from May to July are
usually months of slight decline" the
labor federation states. 1.-The best we
can expect is a smaller decline than
Usual. If the present gains can be held.
the chances are for clear road ahead
In the Fall.
"To look first at the retarding infiu-
ances: The building industry Is not
ready to start forward; demand lor
houses and apartments in the most I'M
ie efill lacking owing TO
reduced buying power. The steel IN
dustrv already sees orders declining be-
cause its best MISUNDERSTANDING
automobiles. railroadS-are not taxing
large supplies. Prices are still going
down. the stock market Is declining.
Purchasing power Of farmers ana wage
earners is low and wage cuts tnreaten;
"These are serious rocks in the road
Rsnward. but constructive tactorS are
strong. -
"The textile industry already mas
started I'D. Demand for AUTOMOBILES
has Increased and the industry is SLOW
= IN, easing production. Factories ana
mines are producing less than the pub
a. consumes, so that supplies must
eventually be used up and production
must increase before long. BUSINESS
has abandoned some OF its speculative
1sndertakings and unsound practices
and should be in good condition 10 go
ahead. These are fundamental changes
for the better" 49,
ACKNOWLEDGEMENT figures of the feder-
5stion for the first half Of April snow
ABOUT the same gain as reported IsSI
wear. but less than in 1923 or 1879.
This, the survey shows, leaves III PEI
cent still out Of work, or on lay-on,
amounting to probably between $780,
600 and 100000 wage earners.
j. Wage Cuts Significant.
Going at length into the matter OF
wage scales, the federation states
"While there have been recurring
Kalggestions of wage cuts, 1t Is slgnln-
ami that they come chiefly from bank
Frs. Industrial executives OF larger
UNDERTAKINGS are defending the high
nav urinciple. These induStriallSts take
me same position that the federation
has long taken-wage cuts curtan puy-
ing. which Is essential to business re-
Covery.
employers feel the pressure OF pro-
gonged depression and are oouDtIul ol
fhe future. But wage reductions now
would be most dangerous. They woulo
add a disorganiZing element just wnen
conditions are beginning to stabilize.
THOSE who make wage cuts find 1t nee
essary to conceal the cut or apologize.
n Is evident that the principle Of high
HaRes has rooted itself deeply In bust
ness thinking in the past eight years.
Widespread wage cuts would unoouOt-
edly postpone recovery.
The federation lists the following as
dangers of wage cuts:
81. Workers good will Is essential IN
any industrial undertaking. Wage cuts
cause discord and strife. With the
1921 wage reductions there were 2, 400
strikes. Good will Is more important
to employers than the little they might
save by wage cuts. Industrial dscoro
now would be a sure way 0oWnWaro 10
deeper depression.
20 Savings from wage cuts are much
less than Is commonly believed. Wages
bre only 40 per cent OF costs in build
Ang, % per cent in manufacturing, 80
per cent on railroads. A wage reduction
Of even 10 per cent when the decrease
sn efficiency is counted, makes a very
small change in costs; Greater savings
oan be effected by introducing produc-
ton improvements, more careful buy
arg. more efficient sales policies, etc.
90 The decline in cost OF living has
not made I'D for workers income losses
Through part-time work and unemploy-
kfent. Real incomes Of all workers in
manufacturing Cat present-day pricesl
were % per cent below the 1929 level
an January, including losses from I'M
employment Even those who kept their
dbbs had 66 per cent lower real in
comes because Of part-time work and
wage reductions.
q. Industry has suffered from wage
losses. Production in 1880 was below
hq2o by 81 per cent in shoes. 19 per
cent in hosiery, % per cent in mems
G1othing, 80 per cent in passenger au--
tomobiles Meat consumption dropped
1854. 900 900 pounds, electric railroads
kost 722, 900 900 passengers. These loss
sss were largely due TO failure OF work
ers' buying.
rs. Wage cuts will limit workers buy
Ahg for years TO come. In 1929. eight
years after the reductions Of 1921. wage
aevels had not yet entirely recovered.
90. Severe wage reductions in the
mast have been accompanied by far
Spore drastic price declines than the
s3resent In 1880 prices declined only
hn.5 per cent below 1929. but with the
kfage cuts Of 1921 the price decline was
81 per cent, and in 1879 prices fell
40 per cent, while wages dropped only
d2 per cent. There have been many in
stances Of price declines while wages
61ose. as in 1925 and 1861.
~ Wage cuts are not like price re-
kiuctions Workers are human beings
ksnd wage cuts mean deterioration in
Aheir scale Of living: often permanent
loss Of opportunity and mental or physi-
&Cal decline"