Standards of Living: Notes for an Article

I

CONDITIONS in England are good. Business is prosperous, large in volume and profitable in operation. There is no social unrest, no acute labor troubles. The work week is 47 hours, and rates of pay are more or less stabilized. Taxes are high, but the budget is balanced. Changes in fiscal and industrial policy have been made gradually over a long period of years and are generally accepted by all.

Across the Channel, in France, radical changes were made in rates of pay and hours of work (40 hours per week), which industry was not able to absorb so rapidly. As a result, costs rose, consumption fell, and unemployment grew, with an accompanying social unrest which has not been allayed, and in consequence industrial activity has not been resumed. Since I was there, there has been a distinct movement to modify the original decrees, both in length of work week and in rates of pay.

Elsewhere in Europe, even in the discussions of the International Labor Board at Geneva, there is practically no agitation for a shorter work week, which throughout. Europe, with the exception of France, is 47 hours and longer.

Here in the United States, over a period of time and particularly recently, we have made rapid changes in the reduction of the work week and increased rates of pay, which industry has been able to absorb through the simplification of designs, better methods and greater mechanization of industry, and the ingenuity of management. Changes in a complex and far-flung organization must be made gradually, if they are to be absorbed without increasing costs and selling prices. As an example of our progress, in the short space of my own active working life there have been great changes. When I started work in 1895, our work week was 56 hours at 12 1/2 cents an hour, or $7.00 a week. To-day a young man of about the same grade would work 40 hours (25 per cent less) and receive 70 cents an hour, or almost six times as much. The General Electric Company went to a five-day week in 1931, for both offices and factories. Incidentally, the Exchange in England is on a five-day week.

The wages and hours bill now being considered by Congress would not affect the hours or the wage rates of any employee in any large industrial establishment, such as the General Electric Company. But it would affect these matters radically, and too rigidly, in certain sections and in smaller companies. The administration of such a law would be costly — indeed I doubt if it would be possible to administer it fairly and with efficiency.

Every country in Europe has what we know as a Social Security law, but these laws are all on a contributory basis, with contributions by the government, the employer, and the employee.

I believe in unemployment insurance, as I have testified, but I prefer a contributory system in this country, with both the employer and the employee participating, and I believe particularly in the encouragement of industry to stabilize or guarantee employment, as much more important. Both these factors — contributions by employer and employee, and the encouragement of stabilization of employment — are present in the laws of some of our states, but unfortunately neither is present in the laws of the State of New York.

I also believe in old-age pensions. We have a Federal system, which is on a contributory basis, fifty-fifty between employer and employee. I am a member of the Senate’s Advisory Council, appointed as a result of Senator Vandenberg’s questions, to consider amendments to the law. I think the law can be broadened with advantage, to cover employees of educational and philanthropic institutions not now covered, domestic servants, and to a certain extent agricultural workers; and I think the law can be simplified and modified in other respects also. It has been declared constitutional, and I am not one of those who think that it will be repealed, but it may be amended.

II

When in Europe, of course I was interested in the living standards in the different countries that I visited, as compared with those in the United States. These are difficult, if not impossible, to compare on a monetary basis, as the currencies of some of the foreign countries are either partially or completely subject to exchange restrictions, so a comparison of this character would result in no valid conclusions. Therefore I made a study of how long an average workman, in certain industries, would have to toil to pay for a year’s shelter (rent) — not a uniform standard of shelter, but shelter. The number and size of rooms, and the conveniences offered, vary greatly in different countries, especially when compared with our own; but the important thing is the length of time a workman has to toil to provide shelter for his family for a year, no matter what that shelter may be; and this shows no great variation.

The following tabulation shows the number of months a man must work in the eight countries I visited, and the United States, to pay for his year’s rent, and the percentage of his year’s income this rent represents.

In the United States, therefore, a man works 2.2 months (representing about 18 per cent of a year’s income) to provide for a year’s rent; in European countries the time varies from two to four months (representing from 18 per cent to 33 per cent of a year’s earnings).

Clothing was too varied, it seemed to me, to make any valid comparisons; but on the principal articles of food, such as milk, eggs, bread, butter, and beef (not that these articles of diet are used to the same extent by the families of workmen in different countries, but in all the countries these staples are used in varying degrees), a comparison could be made to show the varying cost in hours of work to procure these five important food items.

In the United States, therefore, to purchase a unit of these five items, a man must work 1.7 hours, while in the country that is nearest in this regard a man must work 4 1/4 hours, or two and one-half times as long, and in one country a man must work over 7 hours, or more than four times as long.

But a startling contrast between conditions in other countries and our own is seen in the way people travel to work. In our country, one of the problems in our factory towns is to provide fields for parking the automobiles of thousands of workmen. In Europe they have no such problem, as the workmen use bicycles, which are much more easily stored, or they use the tramways, or walk. As a matter of fact, in no other country but the United States, from the standpoint of earnings, can a workman afford to buy a new car, even of the lowest cost.

In the United States, on the average, it requires 4 1/2 months’ work to pay for an automobile, and in the nearest European country a man must work 8 1/2 months for it, and in one country 24 months, or two years. These figures themselves show how impossible it would be for a workman in those countries to buy a car, even on a time-installment plan, as it would be worn out before he could pay for it.

Another article in general use in the United States is the electric refrigerator.

For a radio set, the figures are as follows: —

Interestingly enough, on radio the question of government policy is involved, because certain governments have said that simple low-priced sets must be furnished to all citizens in order that everyone may listen to the words of the officials. Therefore the prices of radios in those particular countries are much lower, in comparison with prices on most other articles.

Finally I take a unit of small cost, one which adds greatly to the comfort and convenience of living — the use of electricity. Electric supply in Europe is sometimes in the hands of private enterprise, sometimes in the hands of the municipality, and sometimes in the hands of the state. Here, then, is a comparison of the length of time a man must work to purchase one kilowatthour of energy — that is, sufficient energy to light twenty fifty-watt incandescent lamps for one hour, or the equivalent.

In the United States a man must toil 3.6 minutes to provide for one kilowatthour of energy; in the nearest European country he must work 12 minutes, or over three times as long, and in one country he must work 43 minutes, or twelve times as long. In this country, generally, the development and distribution of electrical energy have been in private hands, and the problem of making it available to more and more millions of homes has been given constant study, so that now over 22,000,000 homes are electrically connected. The increase in use and the resulting conveniences are apparent on every hand.

The comparative figures on incandescent lamps are of interest: —

These are sufficient indications, from the standpoint of the workingman, that if we do not endeavor to make progress too rapidly we may have faith in the future.