MARCH 19, 1951
HYDE PARK, Sunday—I had an interesting reaction from a gentleman who is a registered patent attorney, with a Ph.D., to the discussion on my recent television program between Michael V. DiSalle, Director of Price Stabilization, and James B. Carey.
He writes: "I was somewhat amused at labor's and management's bickering over splitting the profits (or spoils) of business.
"It is common knowledge among engineers and patent lawyers that modern industry increases its efficiency at the rate of about two percent per year, but in wartime this is increased to about four percent per year.
"In other words with the use of improved machines, 98 men can do the work that required 100 men to do the year previously; and in war years, 96 men in the year 1944 did the work that required 100 men to do in 1943.
"Obviously four percent is an average figure, and some industry where common labor is displaced by fast operating machines makes better than 4 percent of efficiency. Where, in the glass bottle industry, an Owens machine does the work of 800 men, who formerly blew bottles by mouth, obviously this increased efficiency is tremendous in the particular year when the machine displaces 800 men.
"Labor is right when it says it can get higher wages without increasing prices (due to increase in industrial efficiency). But this saving should be passed on to the public and not divided up between management or labor or whatever formula.
"The over-all result is that the common white collar workers, the brains of our society, and this includes school teachers, pay higher prices without commensurate salary increases.
"It is not surprising to find plumbers making $6,000 a year living next to graduate engineers also making $6,000 a year (after 10 years experience), said engineer spending about five years and $7,000 for his education while the plumber learned his trade while earning learner's pay at the age of 19 or 20."
Organized labor, of course, represents all labor, for when they win any benefits unorganized labor profits too, to a certain extent—if not at once, at least over a period of time. Labor represents the large, consuming public also, so they should be quite willing to see prices stabilized and the profit passed on to the public, since it benefits them to lower prices. In fact, low prices increases their income rather more than increases in wages can possibly do, since wages never keep on a par with the increase in prices.
This is a little problem to which management and the public in general should perhaps give some thought.