The American Omen by Garet Garrett

Author:Garet Garrett
Language: eng
Format: epub, pdf
ISBN: 9781610162630
Publisher: E. P. Dutton & Co., Inc.

VI

Finding the True Law of Wages—A Law of Proportion

The great error of industry had been to see the wage earner only as a producer. Not until it began to see him also as a consumer was it possible for a new philosophy of division to be imagined.

The equally great error of the wage earner had been to see himself only as a consumer, and it was not until he began to see himself also as a producer that it was possible for any philosophy of progressive division to act. There was nothing for it to act upon.

These two revolutions of thought have definitely occurred, and there is, for that reason, now the basis of a common language between capital and labor.

The American Federation of Labor, holding its forty-fifth annual convention at Atlantic City in 1925, declared:

“We hold that the best interests of wage earners, as well as the whole social group, are served by increasing production in quantity as well as quality, and by high-wage standards which assure sustained purchasing power to the workers, and therefore higher national standards for the environment in which they live and the means to enjoy cultured opportunities. We declare that wage reductions produce social and industrial unrest and that low wages are not conducive to low-production costs.”

Production first.

Here was a clean break with a doctrine that had obsessed the thought of organized labor from the beginning of its history—the doctrine that wages are paid out of capital’s profit. If that were true, then, as a wage earner, the less you gave to the job the more jobs there were and the more of its profit would capital be obliged to divide with labor. It is not true. Wages are paid out of production. Labor at last accepts the fact. In resisting the efforts of capital to increase the productivity of labor it has been all the time limiting the fund of divisible wealth out of which wages are paid. The wage earner now sees himself as producer. He embraces the principle of high productivity. Then he sees himself again as a consumer and stipulates that he must share increasingly in what is produced.

Business has already perceived him in the light of consumer, and how to sustain his buying power is its own anxiety. It is ready therefore to indorse both sides of the Atlantic City declaration.

Four years before this, in 1921, business had been divided. The evil of postwar deflation was upon it. Profits had collapsed. There were many who said, “Now is the time once for all to liquidate wages.” There was a movement to do so. Labor naturally prepared to resist, but that was not what stopped it.

There was a new faith to be tried. It said: “The trouble is not high wages. It is high costs. The trouble is not overproduction from too much capacity. It is that we employ our capacity wastefully. Let us reduce our costs by better method and more power and let wages stand. The result will be a greater consuming power than we ever had before.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.