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The American wage-the amount paid by American industry to its workers-may be characterized briefly in these A comparatively small percentage (from 5 to 10 in 100) of the persons gainfully employed in modern industry are on a salary basis. The vast majority of the employees (from 90 to 95 in 100) are paid a wage or its equivalent. Among those who work for wages, the great majority (about ninetenths of the adult males)
Summary of Wage Rates in American Industry
(No allowance for unemployment) receive wage rates of $1,000
per year or less. The wagerates of two-thirds of the males fall below $750; a third below $500. These statements make no allowance for unemployment, which is a constant, irreducible factor. Unemployment due to lack of work alone is generally met with.8 Add to this the unemployment resulting from sickness, accidents, and other personal causes, and the proportion is still higher.
1 The meagre wage figures covering transportation, municipal utilities, mercantile establishments and mines indicate that the wages paid in the manufacturing industries are fairly typical of wages paid by other industries in the same locality requiring a like amount of ability or training. See Income, Scott Nearing, New York, The MacMillan Company, 1915, Chapter 4.
2 Compiled from the Reports of the State Bureau of Labor. Census of Manufactures, 1905, Bulletin 93, Earnings of Wageearners, Washington, 1908, p. 11.
4 Report on the condition of Employment in the Iron and Steel Industry, Senate Document 110, 62d. Congress, 1st Session, Volume I., p. xxvi.
Compiled from the Reports of the Tariff Board, from the Report by the Federal Department of Labor on the Strike at Lawrence, 1912, and from the State Reports.
Statistics of Manufactures for Massachusetts, 1912, Boston, 1914, 'Work and Wages, S. J. Chapman, Part II, New York, Longmans, Green & Company, 1908, Chapter 15; Unemployment in the U. S., Scott Nearing, Quarterly Publications of the American Statistical Ass'n. Vol. I, Sept. 1909, pp. 530-535.
An idea of the extent of unemployment may be gained from the reports of the New Jersey and the Massachusetts Labor Bureaus, showing the number of days worked in the various industries. See Bureau of Statistics of New Jersey, 1913, Paterson, 1914, pp. 125-126; also statistics ' of manufactures for 1911, Bureau of Statistics for Massachusetts, Public Document No. 36, Boston, p. 137.
THE STANDARD OF LIVING.
BY PROFESSOR SCOTT NEARING.
A number of attempts to ascertain the cost of a decent standard of living have been based on the assumption that physical health, education up to the age of fourteen, and the other minimum requirements of modern American life were included in the term "decency."
There is a certain minimum of food, clothing, shelter and the other necessaries of life below which physical health and social decency are impossible. That minimum exists in terms of bread and butter, shoes, overcoats, medical attendance and school books. It is fixed by the demands of nature and by the standards of society, wholly independent of cost or price; therefore, any discussion of the cost of a decent living begins with an analysis of the various items which comprise living decency. The amount of food required by the man or by his family can be fixed with scientific accuracy. The amount of clothing is not susceptible of such an accurate statement but it can be designated in terms of a certain number of garments per year. Most students of the standard of living have agreed that three or four rooms are necessary to house a family of five people decently. They have, likewise, made an allowance for medical attendance, for saving, for insurance, and for recreation.
After the number of things necessary to maintain a decent standard of living has been decided upon, the question of cost is raised. A family requires so much flour, so many pairs of shoes, and so many rooms. What is the least amount for which these things can be obtained? The answer to that question, worked out for a number of eastern cities, has placed the cost of a decent living for a family of five at from $750 to $1,000 per annum.1
The amount fixed by the recent standard of living studies is a minimum. One of the most complete investigationsthat made by the federal government-allowed $744 per year for the maintenance of a family of five in a Massachusetts city. Six-sevenths of this entire amount was expended for food, clothing and shelter, leaving only a little more than $100 a year for all of the other items in the family budget.
The exact apportionment of this sum was as follows:
The Chapin study was made for the purpose of determining the cost of a fair or decent standard of living in New York City. In summing up the results of his study, Dr. Chapin writes: 3 "An income of $900 or over probably permits the maintenance of a normal standard, at least so far as the physical man is concerned." Regarding incomes below $900, Dr. Chapin makes the following statement: "Whether an income between $800 and $900 can be made to suffice is a question to which our data do not warrant a dogmatic answer."
One other less complete, but highly satisfactory study of standards of living has been made in the Stock Yards District of Chicago. After an exhaustive investigation, the author reports that the minimum amount necessary to support a family of five efficiently in the Stock Yards District is $800 per year.*
There have been several other investigations, the most recent estimate, made in 1915 by the Bureau of Standards of the Board of Estimate and Apportionment in New York City, sets the amount for that city at $840, and estimates less complete and less conclusive, which lead to the same general conclusion, namely, that in the industrial cities of the northeastern United States, the cost of a decent standard of living for a family consisting of a man, wife and three young children, varies from $750 to $1,000.
1 Financing the Wage-earner's Family, Scott Nearing, New York, B. W. Huebsch, 1911, ch. V.
2 Woman and Child Wage-earners in the United States, Senate Doc. No. 645, 61st Congress, 2nd Session, 1911, Vol. XVI, p. 244.
The Standards of Living Among Workingmen's Families in New York City, R. C. Chapin, New York, Charities Publication Committee, 1909, p. 245.
"Wages and Family Budgets" John C. Kennedy and others, University of Chicago Press, 1914, p. 80.
PROPERTY INCOME IN THE UNITED STATES. BY PROFESSOR SCOTT NEARING.
The toll exacted each year by the owners of incomeyielding property is enormous. The figures are not all available, but corporations alone report to the Commissioner of Internal Revenue a total capital stock of $61,738,000,000; and a total bonded indebtedness of $34,750,000,000. These figures include the wealth value controlled by those corporations which are engaged in financial and commercial enterprises, in public services, in industrial and manufacturing enterprises, mercantile activities, and in such miscellaneous activities as architects, contractors, hotels, theatres, etc. The figures do not include any unincorporated business in these fields.
It is possible to add to the figures cited by the Commissioner of Internal Revenue many other sources from which property income might be derived.
The most important items in property income in addition to the facts published by the Commissioner of Internal Revenue are included in house rent, farm rent, interest on mortgages, and similar charges. The Census figures in this field are incomplete and inadequate, yet taking the Census statements regarding the total number of families, the value of city real estate, the value of farm real estate, and adding to them the figures published by the Commissioner of Internal Revenue for corporations (the probable amount of income yielded by the property controlled through other than corporate agencies), it appears that the total income now paid to property owners in the United States is well above the six billion dollar mark.
No claim can be made for the accuracy of this estimate. The thirty-four and three-quarter billions of corporate bonds reported by the Commissioner of Internal Revenue surely pay an average of 5 per cent. interest; that is, a billion and three-quarters to start with. The sixty-one and three quarter billions of capital stock pays at least some dividends. House rent, interest on mortgages, farm rent, interest on public debt, and the various other sources from which property owners derive income all add their quota. Even at that, the facts can touch only the obvious sources of property income payments.
Grant, for the sake of argument, that the annual income paid to property owners in the United States is equal to six billions a year. There are probably ten million families in the United States which spend less than $500 a year; there are probably twelve million families in the United States, which, together, would have an annual expenditure averaging
$500. The six billions of property income would pay all of the expenses of these twelve million families, or, added to their incomes, would raise them to a level of income respectability.
The estimates on which these conclusions are based are in every case conservative to the last degree. The truth cannot be stated in figures, because the facts for accurate statements do not exist. Figures are used in order to make the matter concrete and real. It is neither practicable nor is it necessary to fix the amount of property income paid at five, six, or seven billions annually. The significant, vital fact is that property income payments are being reckoned not in hundreds of millions, but in billions. The figures for corporate bonded indebtedness published by the Commissioner of Internal Revenue alone establish this fact. It is the fact, and not the amount, that is important.
These figures relate to the incomes now being paid to property owners. The matter may be approached in another way by asking what are the possible sources of property income in the United States at the present time. The largest single group of figures is published by the Bureau of the Census, in its bulletin on "The Estimated Valuation of National Wealth," Washington, 1915, page 15. According to the census estimate, the total wealth of the United States in 1912 was $187,739,000,000. Of this amount, more than half ($98,363,000,000) was in the form of real property and improvements, taxed. Real property and improvements, untaxed, add another twelve billions to the total property valuation. Farm implements and machinery, manufacturing implements and machinery, railroads and other public utilities aggregate the vast total of national wealth. Clothing and personal adornments (non-income yielding wealth) are stated at only four and one quarter billions, while furniture, carriages and kindred property is stated at eight and a half billions. Thus the strictly personal property of the country constitutes less than 7% of the total wealth credited to the United States in 1912.
These Census figures obviously do not all represent income yielding property. If the 96 billions of corporate business property reported by the Commissioner of Internal Revenue, the 41 billions of farm values and the 5 billions of public debt are added, there appears a total of approximately 140 billions of income yielding property. These sources alone would yield at 5 per cent, an annual income to property owners of 7 billions..
The second method of computing the total of potential income-yielding property, while less accurate, is far more inclusive. The Internal Revenue figures should be increased