The people's voice. [volume] (Helena, Mont.) 1939-1969, 1960-09-02

"A fallacy which shows dangerous
signs of becoming folklore in our land
| is that our climbing wage rates are
progressively pricing American prod
ucts out of the worlds markets
that, in short, because of our far
higher wage levels, our products are
less and less competitive with the
goods of cheap labor nations.
Another fallacy which shows equal
ly dangerous signs of becoming folk
lore is that our wage level is rising
much faster than the wage levels of
the major nations of Western Europe,
and thus the wage spread between
our country and European countries
is widening and making our competi-
tive position worse and worse.
1t we'll may be that you believe these
fallacies; they certainly. are being
publicized widely enough. But they
cannot be supported by facts. Rather,
new statistics just brought out by
world-respected sources emphasize
that:
Wages in Western Europe are ris-
ing faster than in the United States
and the likelihood is that they will
continue to rise faster, thereby clos
ing, not widening the labor-cost gap.
Although Europe's wage levels
are substantially below our levels
AS they have been for genera
tions-many factors other than
wage levels decide the total cost of
a product, and these other factors
make it possible for long list of
products to be produced cheaper in
our country despite our higher ),
wage rates.
These facts are underlined in new
study by the French National Insti-
tute of Statistics and Economic Stu
dies and are considered so important
by New York's Chase Manhattan
Bank that it is sending them in re-
port to all U. S. businessmen consid-
ering investments in Western Europe.
They surely will be of interest to
you too.
To begin with, the fact which is
basis for the fallacies about our prob
Iems in the worlds markets today is
that our wage level is still so much
above Europe's. Our hourly average
Of $2.68 compares with $1.O8 in
Sweden (highest in Europe) and 81
cents in the Netherlands lowest
average in Europe). These compari-
sons include fringe benefits or social
charges which, incidentally, account
FOR much larger part of total labor
costs in Europe than here. In Italy,
,or instance, social benefits account
,or 43 per cent of total labor costs.
In view of this central fact, how
can it be argued that wages are not
pricing us out of the worlds mar
kets? Here is how:
The hourly wage figures may often.
IS the Chase Manhattan Bank puts it,
'understate actual labor COSTS" Our {
workers. can turn out more goods per
our because they have more equip
nent behind them and they are more ]
Elective than equivalently skilled ]
European workers.
Other costs beyond wages must be
onsidered-such as the cost of fuel. {
over, construction, raw materials {
nd these other expenses frequently I
re higher abroad than here.
The trend is toward a more rapid {
Use in wages in Europe than in our '
ountry. Between 1850 and 1868, the t
age rise in six European countries |
veraged almost s per cent a year i
gainst about 5 per cent here. And t
uropean labor unions are tighten n
lg their organizations, building their I
nanclal resources, pressing harder t
'r more pay, shorter hours.