Current Economic Affairs/Chapter 7
CHAPTER VII
HAS OUR SCALE OF LIVING IMPROVED?
The expression “scale of living” is preferable to “standard of living.” The latter implies something that is set up as a basis, that ought to be enjoyed. It associates itself with the “living wage.” Of course there can be no such thing as the same standard of living for all the people of a country, nor will they ever be in enjoyment of the same scale of living. The town dweller has necessarily a different standard from the country man, the college professor from the ditch digger. We may, however, talk rationally about the scale of living in a country as a whole and among its classes of people. I am not intending to be oracular upon this subject, but rather, to examine conditions of the present as compared with pre-war, and especially with respect to the United States. As for Europe there is no question about the scale of living of the people having deteriorated in more or less degrees in every country, certainly the most in Russia and possibly the least in Great Britain and France, but I am frank to say that the last remark reflects my conjecture rather than my knowledge of facts.[1]
We are assured by many persons who speak prominently that the scale of living of the American people has been raised during the last 10 years. The president of the Chamber of Commerce of the United States of America asserts that and the president of the American Federation of Labor proclaims that wage earners will not consent to revert to anything inferior to what they enjoy now. Let us subject these statements, beliefs, or whatever they may be called, to some tests.
If our income, or our wages, expressed in dollars, go up and the prices of the goods and things that we want do not go up we come into the enjoyment of a better scale of living; for obviously we can have more goods and things, and it is that ability that constitutes, or determines, a scale of living.
If, however, the goods that we want are impaired in quality in order that we may obtain them at the same price as formerly we may not be any better off than we used to be. Even may we be in a worse position. Thus, if a man used to earn $6 per day and with a day’s pay obtained a pair of shoes that would last him a year he is in an unchanged economic situation if his wages having been raised to $12 per day he has to pay $12 for the shoes; or if he be offered and buys shoes for $6 that last him only half a year.
The last is a condition that may be overlooked. Yet it is a matter to be seriously considered. We hear from all quarters the comment that “goods are not what they used to be.” Some one examines an old, well-preserved automobile and comments “You can’t get such materials now.’’ Some one else observes a new house in course of erection and says contemptuously that it is even more jerry-built than such houses used to be. I have here remarked respecting a major economic condition that has received but slight attention. The consumer may be conscious that the clothing that he buys is made of shoddy material that will not last long, while he is ignorant that the storage battery that he puts upon his automobile is destined for a life of only one year, constraining him to buy a new one every year instead of every two years as formerly; and still less does he appreciate that the modest house that he builds at great cost is relatively soon going to cause him to incur large bills for its upkeep.
Due consideration should be given to such conditions in examining whether the scale of living of the American people has, or has not, advanced. This is an extra-ordinarily complicated question and much less than undertaking to answer it finally I am intending rather to offer some suggestions respecting it and to present some statistical data bearing upon it.
Without any doubt the American people as a whole have the use of more telephones and more electric appliances, of more automobiles, the pleasure of new amusements such as moving pictures and radiotelephony, and the more enjoyment of the luxury of leisure. All of those things intimate an advancement in their scale of living.
On the other hand housing is admittedly inadequate, railway travel is less comfortable, the annoyances of freight congestions are now and then experienced, the conditions of urban transportation are bad and growing worse (especially in the city of New York), and school facilities are admittedly insufficient.
We have, potentially at least, an abundant supply of wheat and corn, and consequently of meat; also of bituminous coal. But we do not get enough anthracite coal, whatever be the reason. Until petroleum is satisfactorily adapted to use as domestic fuel it looks as if the eastern part of the country will be poorer in that respect. Our supply of lumber diminishes. To a certain extent iron and steel and cement take the place of lumber, but for some purposes the latter is indispensable and the diminishing supply of it is contributory to the high cost of houses and therefore to the inadequacy thereof.
It is such things as these that determine the scale of living of a people. The enjoyment of a greatly increased national income expressed in dollars may not be helpful at all. Money is merely the medium for the exchange of goods. The real question is how much goods have we to divide, not how many dollars.
A secondary question is how we divide the goods that we possess. The economic factors that naturally determine that are so complicated that no body of men can even hope to have the intelligence to regulate them. In trying to do so muddles are sure to ensue. When economic factors were allowed to operate freely a natural equilibrium resulted. Unbalancing of those factors by economic interferences may produce the situation wherein half the people may enjoy an improved scale of living while that of the other half is impaired. Something like that is being experienced in the United States at the present time.
In the consideration of this subject we must also take cognizance of the far reaching effects of the prohibition of alcoholic drink. I do not think there is any doubt about its having been of economic benefit, although I am opposed to the whole thing, or rather the way it was brought about, as an infringement upon liberty. Nevertheless, there must be economic account of that development, just as of the introduction of cord tires and tungsten lamps and improvements in business organization, which exemplify the real factors that enable a people to attain a higher scale of living.
This subject may be most intelligently examined through the statistics of production and consumption. The production statistics, which have been summarized in a previous chapter, give only a partial picture; for there are some commodities whereof we produce a surplus that we export, obtaining in exchange for them other commodities, such as sugar, rubber, silk, flax, coffee and tea that we do not raise at all, or else but inadequately. It is therefore the statistics of consumption to which we need to refer in order to form a true idea respecting our seale of living.
Such statistics are not easily available. It is only with respect to relatively few commodities that we have data of the deliveries for consumption, which is a different thing from consumption itself. If we should make comparisons for single years, e.g., 1913 and 1922 we should arrive at misleading results, which I know from trial. If, however, we take averages for a series of years we shall do a good deal to iron out irregularities and even statistics of production of commodities that are wholly used at home may then be closely representative of true consumption. I have selected for comparison the three years 1912–14, as the period immediately before the war, and the three years 1920–22 as the period immediately following. These two groups of years therefore represent the beginning and end of a momentous decade.
The data for consumption are based on the reports of the U. S. Geological Survey, the U. S. Department of Agriculture, the American Iron and Steel Institute and the American Bureau of Metal Statistics. Such of the data as was originally expressed in terms of bales, bushels, barrels, thousands, etc., have been converted into terms of weight by the use of well known factors in order to have a uniform expression in pounds. Wherever the authorities cited have computed consumption their figures for it have been used. Where no such computations have been made I have done them myself, adding production and imports and deducting exports. Wherever there have been data for stocks, allowance for changes in them, plus or minus, between the beginning and end of the years, has been made. This is the conventional statistical method of computing consumption, but in reality it gives deliveries for consumption rather than actual consumption. However, the differences between those two heads are probably immaterial in the present consideration.
In some instances, such as stone, clay and a few other rough commodities for which only production figures are available the same have been taken as equivalent to consumption, which doubtless is near enough. I have divided the consumption in each year of the two triennial periods by the population at the middle of the year and have computed the arithmetical average of the quotients. In considering the data in the accompanying table some allowance must be made for error in the original statistics, but with respect to all of the principal commodities such errors as there may be are surely immaterial.
In the instance of some commodities, the metals especially, there is a good deal of use for the domestic manufacture of goods that are subsequently exported. Statistically this is commonly reckoned as a domestic consumption. Of course it should not be so reckoned theoretically, but in general the available data do not enable the statistician to go any further. My own computations are made in conformity with this general statistical practice, except that in the instance of copper deduction is made of our exports in the form of rods, wire, sheet, etc., which deduction gives us more nearly the domestic consumption of this metal. Our exports of zinc and lead in manufactured forms are relatively small, but our exports of manufactures of steel are large.
| 1912–14 | 1920–22 | ||
| Building materials | |||
| Lumber | 1,586.1 | 1,122.7 | |
| Cement | 324.0 | 355.0 | |
| Gypsum | 61.0 | 67.0 | |
| Sand and gravel | 1,602.0 | [tb 1] | 1,594.0 |
| Stone | 1,907.0 | 1,380.0 | |
| Clay | 57.2 | 50.6 | |
| Lime | 72.0 | 60.0 | |
| Common brick | 498.0 | 307.0 | |
| Firebrick | 62.1 | [tb 2] | 62.5 |
| Silica brick | 12.7 | 14.2 | |
| Metals | |||
| Steel, rails | 59.5 | 40.6 | |
| Steel, wire rods | 56.9 | 49.8 | |
| Steel, plates and sheets | 115.8 | 133.4 | |
| Steel, tin and terne plate | 19.6 | 22.0 | |
| Steel, total | 631.4 | 639.6 | |
| Iron | 632.3 | 564.0 | |
| Copper | 6.9 | 8.6 | |
| Lead | 10.4 | 11.7 | |
| Zinc | 6.4 | 6.8 | |
| Tin | 1.1 | 1.2 | |
| Fuels | |||
| Coal, hard | 1,737.0 | 1,380.0 | |
| Coal, soft | 8,946.0 | 8,136.0 | |
| Water power[tb 3] | 171.0 | [tb 4] | 408.0 |
| Fuel oil[tb 3] | 257.0 | [tb 4] | 840.0 |
| Total fuel | 11,111.0 | 10,764.0 | |
| Petroleum, total | 732.0 | 1,425.0 | |
| Cereals | |||
| Corn | 1,536.0 | 1,531.0 | |
| Wheat | 360.0 | 340.0 | |
| Oat | 399.0 | 368.0 | |
| Barley | 86.0 | 63.0 | |
| Rye | 21.0 | 20.0 | |
| Rice | 14.0 | 16.0 | |
| Meat | |||
| Beef | 61.4 | 60.3 | |
| Veal | 5.5 | 7.8 | |
| Mutton | 7.7 | 5.4 | |
| Pork | 71.0 | 75.4 | |
| Total dressed meat | 146.8 | 149.0 | |
| Edible offal[tb 5] | 26.9 | 28.4 | |
| Lard | 11.7 | 12.8 | |
| Other foodstuffs | |||
| Potatoes, white | 241.3 | 225.4 | |
| Potatoes, sweet | 29.3 | 48.3 | |
| Apples | 103.7 | 76.9 | |
| Milk | 801.6 | 853.1 | |
| Eggs | 21.5 | 25.1 | |
| Poultry | 16.8 | 19.3 | |
| Sugar | 85.9 | 99.0 | |
| Luxuries | |||
| Tea | 1.0 | 0.8 | |
| Coffee | 9.4 | 12.0 | |
| Tobacco | 6.3 | 1.7 | |
| Cocoa, crude | 1.5 | 2.8 | |
| Fibers | |||
| Cotton | 29.0 | 26.8 | |
| Wool | 5.2 | 5.5 | |
| Silk natural | 0.32 | 0.48 | |
| Silk, artificial | nil | 0.27 | |
| Miscellaneous[tb 6] | 8.7 | 6.6 | |
| Miscellaneous goods | |||
| Rubber | 1.9 | 5.0 | |
| Flaxseed | 16.5 | 13.8 | |
| Hides and skins | 13.2 | 11.9 | |
| Wood pulp | 68.8 | [tb 7] | 80.7 |
| Minerals and chemicals | |||
| Phosphate rock | 40.6 | 42.1 | |
| Fertilizer[tb 8] | 141.3 | 106.3 | |
| Salt | 97.3 | 116.4 | |
| Sulphur in brimstone | 6.1 | 17.8 | |
| Sulphur in pyrites[tb 9] | 11.9 | 4.1 | |
| Total sulphur | 18.0 | 21.9 |
- ↑ Production in 1912 estimated.
- ↑ Computed from data for 1913–14 only.
- ↑ 3.0 3.1 Coal equivalent.
- ↑ 4.0 4.1 Approximate only.
- ↑ A term used by the Department of Agriculture to comprise such parts of slaughtered animals as liver, heart, heads and tails, etc.
- ↑ Flax, hemp, jute, sisal, etc.
- ↑ Computed for years 1910, 1911 and 1914, data for 1912–13 being unavailable.
- ↑ Computed from data given by the Wall Street Journal.
- ↑ Estimating the average sulphur content of pyrites at 40 percent.
In all building materials there was a diminished supply and a diminished consumption, except in the instance of cement. This positive exhibition confirms the statistics of building construction, which show substantially the same thing. The increase in the production and use of cement is attributable to increased highway construction, for which cement has come to be largely employed. The same kind of decrease is observable in iron as in the other building materials, notwithstanding the greatly enlarged consumption of steel for the manufacture of automobiles, which industry in 1922 absorbed about 10 per cent of the production, a far higher proportion than in 1913. It is to be remarked further that there has been a greatly increased use of steel in the petroleum industry, which is closely associated with the operation of automobiles.
The increased consumption of copper is perfectly explained by our knowledge that the last decade has been a period of great electrification and of great expansion in the use of the telephone. Moreover, the automobile manufacturing industry has become a great consumer of copper, about 15 per cent of the consumption in 1922 having been for that purpose. The increased consumption of zinc is explained partially in the same way, for zinc as a constituent of brass is used extensively in connection with copper. However, the use of zinc has not increased in the same ratio as copper owing to diminished consumption of it for the coating of iron and steel, which is building material.
The increased consumption of lead per person is also explained by the electrical and automobile industries, two of the major uses for lead being as casing for electrical cables and the manufacture of electrical storage batteries. Of the latter about five-eighths are now for automobile operation. If we should segregate these uses of lead we should probably find a diminished consumption per person for all other purposes. The consumption of lead for pigment is a complicated study owing to the varying substitution of other pigments, such as those of zinc and barium.
The building materials, including the metals, are used mainly for the production of capital goods or producers’ goods, in brief for goods other than for immediate consumption. To a certain extent some of them are very closely associated with consumers’ goods. Thus, nobody eats, burns or wears iron, but about 5 per cent of the production of steel in 1922 was used for food containers and in the main was consumed in fulfilling that purpose. However, such uses of the metals and building materials are relatively minor, their chief uses being for the construction of houses, railways and industrial plant. Their diminished use for such purposes corresponds roughly with the decline in savings and investment that is shown by the financial statistics.
In fuels there are some interesting exhibitions. The subject is complicated by the nature of the uses and the important changes that have been occurring during the last decade. Obviously there can be no intelligent consideration of this subject unless it be viewed as a whole, not merely with respect to coal, or any other single thing.
Fuel is used mainly as a means for obtaining light, heat and power. It may be used primarily for the generation of power and then the power itself may be employed for lighting and heating. A considerable proportion of coal consumption is for the production of illuminating gas, in which form it is used directly for lighting. A portion of the coal consumption is for still another use, viz. asa metallurgical reagent. A complete analysis of these uses would be laborious and complicated.
Coal, both anthracite and bituminous, has always been our main fuel, and especially bituminous coal. The use of anthracite, which is produced only in Eastern Pennsylvania, occurs mainly in the northeastern part of the country. In that territory it is used in its larger sizes as a fuel for house heating; in its smaller sizes for industrial purposes. For the latter the small sizes of anthracite are in direct competition with bituminous coal, or vice versa.
During the last 10 years there have been phenomenal increases in the use of hydro-electric power and petroleum. I introduce those uses into my table by computing the coal equivalent of each of them. Thereby the consumption of hydro-electric power, which is expressed originally in terms of kilowatt hours, is by me for present purposes expressed in terms of pounds of coal. Similarly is expressed the use of fuel oil, which is originally reported in terms of barrels. These transformations involve certain engineering generalizations, and possibly some error, but the extent of the latter, if there be any, will be immaterial.
My table also shows the consumption of petroleum per person, expressed in pounds. This figure comprises the American consumption of petroleum in all forms and for all purposes, viz. as fuel oil, lubricating oil, kerosene, and gasoline. The great increase in the consumption of petroleum is ascribable partly to the more extensive use of it as a fuel, in substitution for coal, but mainly to the greater use of gasoline which is directly attributable to the automobile.
These statistics show a greatly diminished use of anthracite coal per person in 1920-22 as compared with 1912-14, a greatly diminished use of soft coal and on the other hand great increases in the coal equivalents of water power and fuel oil. In the aggregate there was a small diminution in the consumption of fuels. This might be in part ascribable to improvements in the generation of power from coal, which without any doubt have been of an important nature during the last decade. Whatever there may have been in that way however is not wholly a net gain, inasmuch as it has been partially offset by the charges on the capital invested to effect it. It may be further remarked that the substitution for hydraulic power for coal is not clear gain. Hydraulic power is rendered available for consumption only with great capital outlay.[2] There is but little hydraulic power available in bulk in the United States at less than four mills per kilowatt hour. In the largest modern steam plants power can be developed as low as six mills per kilowatt hour even with present prices for coal.
The evidences of diminished production and diminished consumption of anthracite are positive. The rise in the price for that fuel is more or less a reflection of the conditions of supply and demand.
In considering the consumption of food stuffs we must of course bear in mind that the major part of the use of corn is for feeding animals on the farm, whence it is marketed after transformation into beef and pork. The consumption of oats is largely by draught animals. In 1912-14 a large part of the use of barley was for the brewing of beer, which in 1920-22 was greatly curtailed by the Volstead law, that had then come into effect. Of the most important cereal for human consumption—wheat—there was a smaller supply per person in 1920–22 than in 1912–14.
Of meats and lard there was an increased consumption. Among the other food-stuffs there was a decreased consumption of white potatoes—a cheap food—and decided increases in the use of milk, eggs, poultry and sugar. There was a decreased use of apples, but I conjecture that if there were statistics available for the other fruits they would show increase.
Among the things that I have classed as luxuries, coffee, cocoa and tobacco were in greatly increased supply and use, while of tea we did not consume so much.
Of the fibers, which constitute our main clothing material, we had much less cotton in 1920-22 than in 1912-14. The amount available for clothing was even more curtailed than the quotients indicate, for in the later period a greatly increased proportion of this fiber was being taken for the manufacture of automobile tires. Our use of wool increased about 20 per cent while that of silk was 50 per cent greater. It may be remarked incidentally that during this period there was a great expansion in the domestic manufacture and use of artificial silk.
Of hides and skins, the source of our leather, we did not have so much in 1920-22 as in 1912-14.
Speaking generally, we appear to have used less of the rough foods, such as wheat and potatoes, a little more of meat, and a good deal more of the highly palatable things like poultry and dairy products and sugar. So also as to the luxuries. We may discern the same thing in the clothing material, whereof we used more wool and silk and less cotton. These disclosures may be a reflection of the greater returns to wage earners, enabling them to buy more costly food and better clothing. However, the statistics of the consumption of these commodities can hardly be regarded as evincing any great improvement in the scale of living even in the matters of food and clothing.
In the list of miscellaneous commodities there have been changes which generally are easily explainable. The consumption of phosphate rock, and of fertilizers into which phosphate rock enters, diminished seriously. The consumption of sulphur in brimstone increased greatly while that of sulphur in pyrites decreased. Well known industrial conditions caused a substitution of the sulphur of brimstone for the sulphur of pyrites. Combining the two forms of sulphur consumption, the figures are 18 for 1912-14 and 21.9 for 1920-22. This implies an increased consumption of chemical products. The increased consumption of salt implies the same thing. Brimstone is used extensively in the manufacture of wood pulp, the consumption of which increased. This means increased enjoyment of newspapers, increase in newspaper advertising, etc., all of which is rather a difficult subject to analyze.
In general, this statistical study of the consumption of commodities in the United States bears out the previous conjecture, or deduction from other data, that on the whole the people of the United States were not in the enjoyment of so good a scale of living in 1922 as they had in 1913. The manner in which these data coincide with other data of totally different character, but of economic nature, is impressive.
The consumption of building materials shows a decrease. The building of houses and other structures expressed in terms of square feet of construction shows the same thing. We may see it also in the data for pig iron. The decreased use of that metal, together with the decrease in other building materials, matches with the decrease in the building of railways and municipal tramways, the equipment thereof and the deterioration of upkeep. This is shown in the statistics for railway construction and for locomotive and car building. We get another reflection of the same thing in the financial data of our savings and capital investments. Indeed all of this is like seeing an object in the several parts of a folding mirror. In each section the reflection is of a different view, owing to a difference in angle, but all of the images are obviously of the same thing. There can be no shadow of doubt respecting the conclusion that in the matters of houses and other buildings (such as schools) and in the means for transportation we were not so well off in 1922 as we were in 1913.
Next to shelter, the most important things in the common life of a person are clothing, fuel and food. We did not have so much of the principal fibers, nor so much leather, in 1920-22 as in 1912-14. In other words, we were not so well off with respect to clothing material. With respect to food the figures are more confusing, and at the same time interesting. We may deduce that the scale of living of the people as a whole improved in the matter of food, not only in the quantity thereof, but also in the character. This may be construed as a reflection of the unbalancing of the previous division of the national income, which gave a larger share to the wage earners and enabled them to eat more and better. This was at the expense of housing and means for transportation, which are provided out of savings. Here again the evidence appears to fall in with other economic data. We shall see the same thing in other matters.
Thus we see the increased luxury of automobiling in the larger consumption of gasoline and rubber; the increased luxury of reading matter in the larger consumption of wood pulp; the increased luxury, or improvement of the scale of living, in the larger consumption of copper and zinc, reflecting more extensive use of the telephone, electric lights, and electrical appliances generally. The statistics for telephones, electric lighting, etc. show the same thing.
There are some things in the consumption statistics that are not so easily explainable. I find it difficult to account for the diminished use of soft coal, even after making allowances for the substitution of waterpower and fuel oil. It is probably partially ascribable to engineering economy. On the other hand I am puzzled by the increased consumption of salt and sulphur which imply increased consumption of heavy chemicals. However, whatever be the explanation, it is undeniable that we experienced improvement in that particular.
These results are of the order that would be anticipated. It would not be expected that there would be either improvement or impairment in all things. There would be naturally irregularities, indicating better living in some particulars and poorer in others. We must therefore decide how we stood on balance. My own judgment is that we did not stand so well in 1922 as in 1913, there having been impairment in major things, except in food, and improvement only in the luxuries in the main. Moreover it is probable that the enjoyment of luxuries fell especially to the people living in towns, rather than to the people as a whole.
Of course it is obvious that the quantities and quotients computed for consumption do not necessarily measure the limits of supply. In some instances they do; in others they do not. In the matter of anthracite coal, for example, we used all that we had and paid very high prices for it. In the matter of fertilizers on the other hand, we might have had and might have used greatly increased quantities if we had so elected. The plants in this industry are estimated to have a capacity for producing 10 million tons of commercial fertilizer yearly, and we have bountiful supplies of the phosphate rock and sulphur with which to aliment them. Commercial fertilizers are principally used by the cotton growers of the South, who were in a bad position in 1922 and consequently used only about two thirds of the quantity of fertilizers that they did in 1920. This illustrates very well how the data for consumption are correlated. We may enjoy some commodities at the expense of others. In drawing conclusions we ought to concentrate attention upon the final expressions. Thus, we should consider the consumption of cotton which is a direct measure of an important material available for clothing rather than the consumption of fertilizers which contribute to the production of cotton.
The question whether the American scale of living has been improved or impaired may be illuminated by a homely consideration of the affairs of several typical classes of people. We may dismiss the very rich, who have been but little affected, and besides they are a mere handful of the people. They have as good housing, clothing, food and domestic service as they used to have. However, even the very rich are constrained to use the same railways and means for municipal transportation as other persons, and they do not find them so good as they were.
We may begin our consideration with a man of $20,000 income, who will be typical of professional men, the upper class of business and banking executives, etc. During the last 10 years the salaries and gross earnings of such men have increased but little, barring that which naturally follows from advancing years and experience. Persons of this class generally had automobiles 10 years ago and have gained nothing in that respect or in other comforts. They find themselves now constrained to give up $1,600 per annum for federal income taxes and perhaps $400 for other taxes. Their expenses in every direction have risen anywhere from 50 to 100 per cent. Such a family formerly enjoyed the help of two or three servants. Many of them are now reduced to one or none at all. They see their houses falling into disrepair, through sheer inability to maintain them properly. Their ability to save has vanished. This class is in the lower range of what is graphically characterized as the “poor rich.” There is no doubt that it is not doing so well nor living so well as 10 years ago. However, this class also constitutes scarcely more than a handful of the total.
On the basis of the income tax payers of 1916 we may go down to the dividing line of incomes of $3,000 per annum in that year and find that there were not so many as 2 per cent of the people possessing incomes of that amount or more. In going down to that level we shall find the same impairment in the scale of living that we have observed on the way down from the top, but the lower we go the more acute is the adversity. In other words while a family with a $20,000 income was not so well off in scale of living in 1922 as in 1913, a family with a $3,000 income was in a situation relatively much worse.[3]
If economic conditions were in the old equilibrium we should expect to discover such changes for the worse exhibiting themselves in increasing degree down to the lowest stratum. The economic equilibrium having been disturbed, however, the change in the ratio of division of the produce of industry occurring somewhere around the line of the income tax payers of 1916, we may expect consequently to discover a reversal of experience, at least partially, below that line.
In the great mass of people possessing incomes of less than $3,000 in 1916 there may be made some clear-cut classifications. Primarily there is a division between the farm population, which numbers about one third of all, and the urban and suburban population. The latter comprises what is commonly called “labor” and the small merchants, clerks, public servants and others who may be generalized as the “white collar” classes.
I do not think there can be much doubt that the scale of living by the farmers on the whole was lower in 1922 than in 1913. As a class they did not suffer from shortage of shelter and probably not much from shortage of food, although perhaps they did not have so much luxury under that head. In clothing, fuel and transportation service they were not so well off. On the other hand they came unmistakably into great enjoyment from automobiles, cinematography, radiotelephony, and the phonograph and telephone. We may ask seriously however, whether such enjoyment has not been largely at the expense of their roofs, fences, equipment and live stock and the fertility of their land; in other words at the expense of their principal.
Among the urban and suburban population there is no doubt that the white collar classes have suffered impairment of their scale of living. It is notorious that in general the wages of clerks and public servants have risen but relatively little; to a far less extent than the general rise in the prices for consumer’s goods, which means that they could not have so much of them. Nothing more need be said with respect to the adversity of this class.
Among laborers themselves there are wide differences. The lower classes of labor improved in their living to some extent, especially in their food and clothing. They did not improve in their housing, for there was not enough of the most desirable kind to go around. The position of domestic servants improved immensely, and so did that of artisans, anthracite coal miners and railway employees. All of those classes became able to have such clothing, food, leisure, and amusements, including automobiles, as never before. More and more did they become able to send their children to college and to obtain better professional assistance.
It may be pointed out, however, that even the aristocrats of labor experienced the drawbacks of inadequate housing, inadequate fuel, inadequate school facilities and inadequate means for transportation like everybody else, wherefore perhaps even their improvement in the scale of living is more superficial than real. The impairments that I have mentioned are obvious, except with respect to transportation, which perhaps is not so clear. Some of the ways in which transportation service has deteriorated are these: On many lines convenient trains have been annulled. The running time of others has been reduced. All trains are more crowded. Travellers by Pullman cars are constrained to order their accommodations days in advance. Not infrequently persons are unable to get seats on the trains and at the times they wish. The greatly increased rates, although proportionately less than for many other things, are a restraint. In the subways of New York the congestion is a vexation to the mind and a torture to the body, which is a condition affecting a large part of our population. Municipal transportation everywhere has deteriorated. Out in the country side of New England many tramway lines have been abandoned and people who used to enjoy their convenience no longer are able to do so. On other lines the service that formerly used to be every half hour is now only once an hour. In other parts of the country, on the other hand, there is improved local transportation by motor bus.
I do not think that many persons will dissent from the charge that our present postal service is inferior to what it used to be. So far as I have been able to make personal observations our express service is less prompt, while certainly it is more costly. Is there not in shopping less attention and less celerity of service? Are we not constrained to dispense with the use and enjoyment of many of the articles in our possession owing to the high cost of repairing them? Surely that is true in households whereof I know.
This analysis, which enables us to visualize the position of our classes of people, is quite in line with the statistics of commodity consumptions. Even those figures fall in with the data showing the disturbance of the old balance in the division of the produce of industry, the consequences of mulcting the rich through surtaxes, and the failure to maintain the necessary national rate of saving. It will be hard to escape from the conclusions that the scale of living of the majority of the American people on the whole has deteriorated during the last 10 years; that when there are appearances to the contrary it is in frivolous things at the expense of the really needful ones; that much of the quasi-improvement is at the expense of the principal of the very people who are having a good time; that only a relatively small class of wage earners has really improved its scale of living, and that even with respect to them this has been more or less at the expense of the national principal, although not perhaps of their individual savings.
The statistics of commodity consumption will be very illuminating if they be thoughtfully considered. They bring out clearly how it is not dollars that we have to divide, but rather pounds of goods. The exchange of dollars for them is merely a means to effect the division. If the number of dollars that we use be increased or decreased the quantity of divisible goods is not necessarily changed. Simply we exchange $2 for the same number of pounds of a thing for which $1 formerly sufficed; or oppositely. At least that is what would happen if the new dollar were allocated in the same proportion as the old ones. If not, and if, as unfortunately happens, one class of workers gets proportionately more dollars than formerly they therewith grab more pounds of goods and correspondingly less remains for division among other people. It does not matter materially how much the rich get in dollars, for they can not use for their own consumption much more pounds of cotton, meat, and other commodities per person than other people. Their surplus of dollars in the main is saved in the form of capital goods from which all people benefit. Economic unhealthfulness results from the wasting of surplus, either by rich or poor.
We may now make a rough correlation of some important data set forth in this and previous chapters. Comparing 1922 with 1913 there was no increase in the production of goods in the aggregate, but the national produce in terms of dollars was written up by about 1.7. Labor as a whole obtained a larger share of the goods available by raising its percentage of the national income from about 70 to something more than 80. This was at the expense of property and management. The inroad upon the largest and weakest branch of the capitalistic class, viz. the farmers, both impaired their scale of living and led them to live to a considerable extent on their principal. Among the well-to-do of the capitalistic class, say about 2 per cent of all the people, there was also impairment in their scale of living and of their principal, but to a less extent than among the farmers, the chief effect upon them being the curtailment of their ability to save. The last appears in the contraction of the national rate of saving from 15 per cent to about 7}4 per cent, and in the diminished production and use of building materials. Even a great deal of the latter has been diverted from the production of capital goods to consumers’ goods.
Notwithstanding this perversion, however, there has not been a sufficient increase in consumers’ goods, the production and supply of them in the aggregate having been no more per person in 1922 than in 1913. Herein we may find the true explanation of the continuance of high prices. The shorter the supply the higher the price, e.g., anthracite coal. The better the supply the lower the price, e.g., rubber. If the general index of inflation, or writing-up of dollars, be 1.7 there would be the same division of goods as when it was 1 if the incomes of all classes of people had also been written up by 1.7. It appears, however, that for some classes their income has been increased to 2.25 while for others only to 1.25. Obviously, then the former become able to get more goods and of better quality, while the latter get less and of inferior quality. The scale of living of the -1.7 people deteriorates. That of the +1.7 people improves prima facie, but in the last analysis it does not improve so much as it seems to, or perhaps does not improve at all, for the reason that by the curtailment of the share of property and management in the national income there is a curtailment of savings and the production of capital goods, which in ultimate consequences is most adverse to the wage-earners themselves.
- ↑ A rather large percentage of the people of Great Britain are being supported by doles, i.e., directly at the expense of other people, which is of course a highly uneconomic state of affairs, resulting from unemployment, The people of France have been well employed and have been fairly productive. So far as I know the position of the people in no other country has been statistically examined by the method proposed in this chapter.
- ↑ According to the engineers who conducted the super-power survey in the New England and Middle Atlantic States, a coordinated and fully developed electrical power system can be developed in those 11 states which would save about 50,000,000 tons of coal per annum, effecting an annual saving of over $500,000,000 for a capital outlay of about 1¼ billion dollars. This gives an idea respecting correlation between fuel economy and capita outlay.
- ↑ For the purpose of classification I am here using the incomes of 1916 as a scale. In general the $3,000 salary of that year was higher in 1922, but there has been so much irregularity as to this that it seems better to revert for a scale to a year before the derangement became chaotic.