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This Issue in Brief
The international cost-of-living survey just completed by the International Labor Office indicates that the cost of living of workers' families in several European cities is not very much less than in the United States, and in one city, Stockholm, it is estimated as being substantially the same as in Detroit. This inquiry, while subject to many limitations as to complete accuracy, represents the most comprehensive study of the kind ever undertaken. Page 1.
Average output per man-hour in the sheet department of the iron and steel industry showed a steady gain from 1925 to 1929, except in the annealing operations, according to a productivity study made by the Bureau of Labor Statistics. Page 19.
Vocational guidance should be extended to boys and girls in all parts of the country, according to the committee on vocational guidance and child labor of the White House Conference on Child Health and Protection, 1930. Such guidance, the committee holds, is necessary in order to reduce the human and financial losses resulting from the failure to aid pupils to make educational adjustments which will prepare them properly for vocations harmonizing with their interests and abilities. Page 80.
The working week in foundries and machine shops in 1931 was shorter than in any other year for which the United States Bureau of Labor Statistics has collected data, averaging 50.3 hours in foundries and 49.8 hours in machine shops, according to the latest survey by the bureau of wages and hours in such industries. The highest full-time hours per week were worked in 1923, when they averaged 52.4 in foundries and 50.8 in machine shops. The hourly wage rate of 60 cents in foundries in 1931 was less than in any other
year since 1923, when it was 55.8 cents, but in machine shops the rate in 1931 (63.3 cents) was higher than in any preceding year except 1929, when it was 63.8 cents. The low point in full-time weekly earnings in foundries and machine shops occurred in 1923, being $29.24 and $28.40, respectively. In 1931 full-time weekly earnings averaged $30.18 in foundries and $31.52 in machine shops. Page 134.
A marked preference among employers for the payment of wages by check was found by the Department of Labor of Illinois in a survey of methods and frequency of wage payment in that State. Of the 1,173 reporting establishments represented in the survey, 86.1 per cent paid their employees by check. The firms included in this 86.1 per cent had 89.3 per cent of the total number of wage earners represented, and disbursed 90.5 per cent of the combined wages bill of the reporting firms. A weekly pay period was the rule in 68.3 per cent of the establishments and of these over three-fourths paid by check; 25.3 per cent of the firms paid semimonthly, all but about 1 per cent paying by check. Page 153.
Fewer immigrants are now being admitted to the United States than at any time during the past 100 years, only one immigrant being admitted now where five were admitted a year ago, the Secretary of Labor states in his annual report for the 12 months ended June 30, 1931. Only 3,534 immigrants were admitted in June, 1931, as compared to virtually fifty times as many in June, 1913, under the opendoor policy. Furthermore, in 1930–31 over 18,000 aliens were formally deported, while many thousands of others who might have been expelled were permitted to depart voluntarily. Page 34.
The average expenditure per job filled by the California State employment agencies was 61 cents during the biennium 1928–1930. If each of the 295,385 jobs filled at this rate, and secured free of charge by the workers through the public employment offices, had been obtained at the rate of $4.17, the reported average cost to the workers per job received through a private employment agency, the total cost to the clients would have been $1,231,755. Page 27.
The Employment Stabilization Research Institute of the University of Minnesota is undertaking
a study of unemployment by means of three separate projects. The first of these projects will be devoted to the economic aspects of unemployment, the second to individual diagnosis of cases and retraining, and the third to development of public employment agencies. The announcement of the plans of the institute states that the work will be carried on as a part of the university's work, use being made of the various research facilities of the university. Page 28.
Housing costs and allied information on housing conditions in Buffalo, N. Y., for a group of families with incomes not exceeding $3,000 form the subject of a special study submitted to the President's Conference on Home Building and Home Ownership. The study showed that 59 per cent of the home owners were carrying both first and second mortgages in 1930, 48 per cent of the breadwinners were in skilled occupations, and average earnings of the breadwinners amounted to $2,057. Page 130.
HE results of the international cost-of-living inquiry, which has Labor Office, have just been made public in a report entitled "International working-class living costs." This inquiry was originally undertaken by the International Labor Office at the request of the Ford Motor Co., which desired information regarding the extent to which cost of living varied in certain European cities, where it had established or contemplated establishing plants, in relation to the city of Detroit, in order that it might consider the possibility of fixing its minimum wage rates in its European factories at levels which would secure for the employees in such plants living standards equivalent to those of its Detroit employees.
There were two steps necessary to such an inquiry as that proposed. The first was to ascertain just how the Detroit employees lived. The United States Bureau of Labor Statistics undertook this part of the inquiry, in a survey made in the early part of 1930. It covered a group of 100 families, in which the husband was employed by the Ford Motor Co. at, or approximately at, the minimum of $7 per day established by that company, and during the preceding year had worked approximately 250 days. Each of these families consisted of a husband, wife, and two or three children. The 100 families were thus quite homogeneous both as regards composition and income. The average expenditure of these families was $1,720 during the year 1929. A report giving the full results of this survey was published in the Monthly Labor Review for June, 1930. This report showed, in very considerable detail, how the total annual expenditure of $1,720 was distributed, giving for each item of food, clothing, etc., the average amount of money spent and also (with a few unavoidable exceptions) the exact quantity of goods or services obtained for the money spent.
The next step was to ascertain what the Detroit standard of living, i.
e., the quantities of goods and services consumed by the Detroit employees, would cost in the European cities. This phase of the inquiry was carried on by the International Labor Office, which enlisted the cooperation of the national statistical organizations in the several countries. Many difficulties were encountered. In some cases, articles purchased by the Detroit families could not be duplicated exactly in the foreign city being studied. Again, as in the case of housing, there was difficulty in meeting the Detroit standard. A full discussion of these difficulties and the methods attempted to meet them is given in the report of the International Labor Office. In general, however, there was involved only one problem of a seriously controversial character. This had to do with the question of substituting items, especially certain food items, for those in the Detroit budget in order to meet possible differences in national or racial habits of consumption. To the extent that such differences exist, they should, of course, be taken into account, in such an inquiry as the present one, since the object of the inquiry was to find the cost of a standard of living in the foreign cities equivalent to but not necessarily identical with the Detroit or American standard. The difficulty, however, is in determining whether existing differences in consumption habits are due to real differences in taste or merely to differences in income. To cite a concrete case, various studies show that in the United States wheat is the customary cereal food of workers as well as of other classes of the population, whereas similar studies in Europe show that in certain European countries rye bread is the customary cereal food of the working class. The question then arises whether the use of rye bread by the workers in these countries represents a real preference or whether it is merely the result of a traditional lower living standard, rye bread being cheaper than wheat. If the choice represents a bona fide difference in taste, then the inquiry into living costs should recognize the difference, and make the proper substitution of rye for wheat in pricing the Detroit budget. If, however, the choice of rye is due merely to its cheapness, then to substitute rye for wheat would be to perpetuate the traditionally low living standard and thereby miss one of the essential purposes of the inquiry.
The International Labor Office, in the report giving the results of its European inquiries, states that this problem of "consumption habits” was thoroughly examined, and that, while local standards were taken into account, this was done in such a way as to obviate the objection that such procedure would bias the results. As regards food, for instance, it is pointed out that in certain countries budget studies showed that the weights used for workers' families and for high official families produced the same results. Nevertheless the point raised is one of such importance that it deserves further critical analysis, and the International Labor Office promises a more detailed examination of it in a subsequent report.
The results of the inquiry by the International Labor Office are shown in Table 1. In it the cost of living in Detroit is taken as a base of 100, and the relative cost of living in each of 14 European cities is shown as percentages of the Detroit base. For certain cities no single figure could be agreed upon, and for these minimum and maximum figures are given. Further, it is to be noted that while the inquiries in the various cities were necessarily made at various periods during 1930 and 1931, the attempt has been made to bring all the figures to a uniform time base (January, 1931) by utilizing the avai ble information as to changes in the cost of living in the several cities, including Detroit.
Because of the difficulties involved, the International Labor Office, in submitting the results of its inquiry, emphasizes its limitations and the possibility of error.
The office is aware that the information obtained is not of equal value, and it will be evident to students of the report that the "margin of error is greater for some cities than for others; and although, as explained in the fol
lowing chapters, careful attempts have been made to reduce this margin as much as possible, it has not always been possible to obtain strictly comparable data. It is primarily as a study of methods that this report is published. As far as the office is aware, no similar inquiry of this nature has been undertaken before, and while it is limited to a particular category of employee and to certain cities in a limited number of European countries, it is thought that a full account of the methods adopted, the difficulties encountered, and the problems raised in the course of the inquiry will be of special interest to all students of social questious. The experience gained in the course of the inquiry has been extremely valuable, and it is hoped that if an inquiry of a similar nature is repeated (whether by the International Labor Office or by others), this account of methods and results will be of service.
TABLE 1.-RELATIVE COST OF LIVING IN DETROIT AND CERTAIN EUROPEAN CITIES,
JANUARY, 1931 1
1 The International Labor Office states that the figures in this table are subject to revision.
Minimum Wage Rates of Ford Motor Co. in Detroit and in European Cities
As has already been noted, the international cost-of-living inquiry here reviewed was undertaken at the request of the Ford Motor Co. in order to secure information which would permit that company to consider the factor of relative living costs in establishing wage scales in its foreign plants. It is thus of interest, now that the results of the international inquiry are available, to compare the wage rates actually being paid by the Ford Co. in European cities with the rates as they would be if they were fixed solely on the basis of relative cost of living, with the Detroit rate as the basis.
For the purpose of such comparison, the Ford Motor Co. furnished the Bureau of Labor Statistics the actual hourly rates being paid on August 1, 1931, to unskilled labor in its European plants then in operation. The accompanying table shows these actual wage rates and also shows what the wage rates would be in the several foreign cities if established solely on the basis of relative living costs as computed in the report of the International Labor Office. To the extent that these computed living-cost relatives are accurate, the adjusted wage rates would give the workers in each of the European cities the same general standard of living as that obtained by the Detroit employees who in August, 1931, averaged 86 cents per hour, or $6.88 per day of 8 hours.
Owing to changes in the plans of the Ford Co., the cities in which branches are now established are not, in all cases, the same as those in which it was contemplated establishing branches at the time the cost-of-living inquiry was undertaken. For convenience of reference, however, the table includes all cities for which either cost-of-living data or wage rates, or both, are available.