Evening star., 1933-09-12
FEAR Of HIGH PAY
HELD UNJUST|F|ED.
Small Increase in Prices Will
Pay Difference, Expert
Finds.
,pecial Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, September 12.-Fear Of
costs increasing to point where sales
would be restricted has caused many
manufacturers and some entire indus
tries to resist an increase In minimum
wage levels under the National Recovery
Administration. However, w. l.. Church.
ill., pricing engineer, points out that only
a relatively small proportion Of price
increase is necessary to absorb q large
proportion Of a wage increase. Mr..
Churchill is the author of Pricing for
Profit" and is vice president OF the
John r. Hall Corporation.
Wages paid to workers OF manufac-
turing industries as per reports Of the
Department of Commerce for 1928, and
relating to more than 4.60o,00O wage
workers, averaged only 10 per cent OF
the amount that the manufacturers re-
ceived for their products" Mr.. Church.
i'll explained today.
"A review Of the 26 industrial groups, "
he continued. for which complete flg-
ures were available for 1928. discloses
that the largest proportion Of income
received by employers that is paid out
to employees was so per cent, paid to
workers engaged in manufacturing and
repairing railroad cars. AS little Is 8
per cent was paid to factory workers by
manufacturers of bags.
Averaged 1880 a Year.
I'm 1928 the average wage OF all fac :
tory workers in these rs industrial
groups was 1880 year. BY groups
the average ranged from $763 In the
case OF cotton goods and 1913 IN Gig.
ars and cigarettes to $l,746 for iron ana
.
1T has been estimated that II mini
mum wage rates were fixed at SO cents
an hour, based upon 48 hours q week,
the average of all wages paid to factory
workers would have been equal to at
least 81 900 per year. II so cents an
hour had been the minimum wage rate
in 1928 and 81 500 the minimum aver
age annual wage for all industries, the
price increase to absorb the wage in
crease would have been surprisingly
small proportionately.
For example. in the cotton goods In
dustry whose average wPge was only
s763 per year, it would require an In
crease Of ll0 per cent to elevate the
wages of the workers to 81 600 per year
The manufacturer however. would only
need to have % per cent added to his
average selling price in order to have
paid his workers ITO per cent more
wages. In this specific case the AS, 600
workers in the cotton goods industry
would have had over 1856 ,000. 900 Of ad-
ditional wages to spend, or roughly .
million dollars day.
Small Increase Necessary.
Available statistics indicate that the
adoption of q minimum wage scale OF
81 500 for q factory worker IN 1928
would have meant an average increase
in all factory wages of 20.3 per cent. and
vet would have required only 50 per
cent price rise to absorb such an in
crease in wages.
obviously, the tremendous increase
in purchasing power represented by IN
creased wages would be tremendous
stimulant to business, which IN turn
would 60 long way toward eliminating
unemployment.
The year 1928 was chosen Is repre-
senting a full and good business year.
I realize that average annual wages
have deprecated substantially below
1928 levels and that elevation to the
suggested minimum level now would
mean a greater average increase IN
wages than in 1928 The point to be
emphasized. however. Is that prices do
not need to be advanced in the same
ratio that wages are enhanced. Tne
1928 statistics reveal that price increases
would have needed to be less than one
NTH Of the ratio Of wage increase IN
order to have absorbed them In the re-
vised prices"