The Relation between Wages and the Increased Cost of Living: An Analysis of the Effect of Increased Wages and Profits upon Commodity Prices

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RELATION BETWEEN WAGES AND THE INCREASED COST OF LIVING

PART I. GENERAL SURVEY OF PROFITEERING AND LABOR COSTS
A careful analysis of the data bearing on the causes of high prices and the relation of cost of production to prices leads to the following specific conclusions:
1. Profiteering -- by which is meant the exaction of profits greatly in excess of pre-war profits on the part of prodticers, middlemen and retallers -- is a fundamental cause of the high prices of practically all commodities.
2. Increased wages to labor are in no way responsible for increased prices.

To cite increased wages as a cause of increased prices is to betray an ignorance of the facts. Wage advances have been an effect of price advances, not a cause. An examination of the experience of every industry shows, practically without exception, that wage increases have lagged behind price increases and usually very far behind. In a period of rapidly rising cost of living it is inevitable that wages also rise in some measure, if the great body of wage earners, living as they do at best not far above the line of poverly, is not to suffer complete degradation.

But in no way has labor been the initial influence. Prices were pushed up by factors over which the workers had no control. They have merely struggled as best they could and in the only way they could to keep their old standards of living. In. this struggle they have met with only very partial success. For the great body of wage earners, wages have not kept step with prices.

As a result, Labor as a class is now worse off than it was before the war. Almost without exception a day's wage buys less than it did in 1912 to 1914. In other words, in the distribution of the income of the country labor is receiving a smaller proportion than it did before the war, while capital -- in the form of profits, interests and rent -- is receiving a very much larger proportion.

It is not contended that profiteering is the sole cause for the

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