Montana labor news., 1932-05-12
WAGE CUTS INJURE BUSINESS.
DECREASE PROPERTY VALUES

From a speech in opposition to the bill, sponsored by the Econ
omy Committee of the House of Representatives, which sought to
impose al II per cent pay reduction on Federal employees recdv-
ing more than $1,000 per year,
challenge any man or member of the House, or member of the Econo-
way out of this crisis.
Look at the experience of Europe in reduction of wages, the restitution
and ruin it brought to them. ask you to look at the experience of pr-
yate industry in America, to what happened to the Goa, the iron and stee,
Tn railroad industries. say to you and to the Economy Committee that
these wage cuts are only sinking America deeper in the mme and | plead
to you to kill this rule, which is not pointing the way out 1t is beneath
TN dignity OF this body. Let IS carefully consider this question before we
act
Wage Cuts Injure Business.
The present business depression, dating from the stock market crash of
November, 1925, has been a season. of retrenchment extraordinary. Salary
sashing has been the order of the day. resulting finally in a vicious circle
OF wage cuts, lessened consumption, and declining business volume.
1t is a familiar story The record is SO complete that none can disre-
gard it. Each succeeding wage cut has made matters worse. benefitng
none and injuing all
Unemployment and Destituion.
Moreover in the past seven years every European country has been a-
fhetedw With his same wage-cutting policy, and with exactly the san e
suits. There is no exception to the rule. Unemployment, misery and des-
ttution' declining production volume and investment returns, higher taxes,
reduced public revenues, and dBorganized business generally have followed
in the wake of wage reductions. The record is complete, and all who run
may read.
The coal miners have suffered sharp reduction in wages. More recently
the employees ii. the iron and steel industries had their wages cut, and still
more recently the railroad workers were compelled to accept a ten per cent
wage cut o the general proposition that it was essential for the welfare
Of the transportation industry
Property Values Decrease.
What has been the result? Did these wage-cuts increase the market
value of the concern, bring greater returns to their operators, stimulate and
increase production n tend to promote local o national prosperity?
These wage cuts did none of these things. They caused the exact OPP
poste to happen.
Wage Cuts Cause Government Deficit.
one OF the chief reasons advanced for a reduction in Federal wages is
the fact that a heavy national deficit Of more than $2OOOOOOOoO is in
prospect or the current fiscal year.
Accepting that estimate, let US inquire how this deficit happens to be?
1t is not due to increased Federal expenditures, many of which were in
tended to answer unemployment needs, as it wa due to a sharp drop in
Federal income, a drop that has kept pace step by step with the wage
cuts that have been made in private industry
According to President Hoovers annual message, the fall in Federal re-
cepts for the present fiscal year amounted to $685. 100000, of which ST.
O340O0,000 was in individual and corporate income taxes alone.
Simply stated, reduced wages have resulted in less consumption, and this
in turn has set in motion a series of reductions which has finally found its
full reflection in a staggering annual loss in wealth production throughout
the country. Here we find the major cause of the present national deficit;
that is, a wagecuttng policy resulting in a stupendous loss in national
income.
Pay Reduction Against Public Interest.
Now it is seriously proposed that the Government OF its W account,
and as a example, order a sharp cut in the wages of its own employees,
and to do this thing on the general concent, that the public interest will
be served thereby. Could any proposal be more absurd?
1t would make a bad situation much worse.