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Sylvia Merrill

American Labor in the Last World War

Cost of Living and Wages Had a Race –
The Former Won

(16 February 1942)

From Labor Action, Vol. 6 No. 7, 16 February 1942, p. 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

If you are one of those who are earning more this year than you were last, and wondering why you have less left at the end of the week, a glance at what happened to real wages in the last war will clear up many things.

To begin with, the war affected certain trades much more than others. Shipyard workers, munition workers and others directly involved in war production received wage increases. But for the bulk of labor the increases they received meant little or nothing because the cost of living rose much more quickly than their wages.

John B. Andrews, a labor legislation expert, in his book Labor Problems and Labor Legislation, says:

“We are forced to conclude that all the wage increases of the war (World War I) hardly changed the situation, as wages in most cases little more than kept pace with the cost of living and only very rarely exceeded it.”

All through the war the great cry was, “Earning power has not kept pace with the rising cost of living.”

The cost of living had been steadily rising for 25 years up to 1914, and wages, i.e., wages measured by what they could buy, had been falling. John B. Andrews says:

“The decline amounted to about 10 or 15 per cent over the whole period and was more rapid from 1900 to 1914 than during the previous decade.”

So we see that before the last war was declared wages actually were worth far less than their dollar and cents figure (and that was low enough). But with the declaration of war there began a sky-rocketing that had no end. We already see that taking place in this war.

Cost of Living Jumps

In the History of Labor in the United States, the section on Working Conditions by Don D. Lescohier, we read that

“The rise (in the cost of living) in the five years 1915–20 was two and one half times that of 1894–1914, that is, the annual increase in wage earners’ cost of living during the price inflation of the war period was about ten times as rapid as during the previous 20 years.”

Let us try to get a picture of what happened to real wages in the period of the last war. In order to get a rounded picture we must not begin with 1917, the year the U.S. declared war on Germany, but rather 1915, when the effect of European war orders began to be felt by the American industrial machine. The first half of 1915 was still part of the era of the 1914–15 depression. There was unemployment and slack. But the second half of the year showed an upturn and so did the cost of living.

If John Doe was working after a period of “recession” and thought he would pay off some of the debts, or buy some badly needed clothes, he found, if he read the statistics (and he knew, even if he did read them) that the cost of living had jumped nearly 13 per cent from December 1915 to December 1918.

In Real Wages in U.S. Paul H. Douglas estimates that wages in all industries rose an average of $1.32 a week, or 9 per cent during 1916.

Cost of living rises 16 per cent – wages 9 per cent.

Worker in the Same Rut

From 1916 to 1917 the cost of living went up 20 per cent. It was then nearly 13 per cent higher than in December 1914. All the findings on wage increases show that workers were no better off because of the rise in wages. By and large they were in the same spot.

From December 1917 to December 1918, the cost of living rose 31 per cent. But in most industries wages did not equal the rise. They rose 23 per cent.

Of course, those with fixed incomes, like clerical workers and government employees, were very badly hit.

The rise in the cost of living and the lagging behind of wages caused much distress and many strikes.

The National War Labor Board was set up to handle labor disputes. Its policy was to maintain the pre-war standards of real wages. There was much commotion over this, since the wage disputes were to be settled on the basis of family budgets – BUT WHOSE? There were various strata of income within labor’s ranks.

Besides which, the unions contended that the rates of pay before the war were too low and should not be used as a measuring rod. The board in 1918 heard reports from various people and committees who had figured out substantial budgets and rates of wages necessary to maintain workers in “health and reasonable comport.”

In an executive session, held by the War Labor Board in Washington in July 1918, it was decided that

“... The resultant rates (found by the committees) were so much higher in amount per hour ... than those prevailing at the time, that the board feared the dislocating effect upon production of practically applying the principle during the war period.

“After prolonged discussion and consideration, it was finally decided, for reasons of expediency, not to apply this principle in a general or arbitrary way, but only to sanction it in specific cases where wages were abnormally low and where the physical maintenance of labor for war production was being impaired.”

In other words, the board decided that the principle of “health and reasonable comfort” would have to be abandoned.

This from the body set up to handle labor grievances. Not too much thought has to be used to imagine how they mediated them.

Rank and File Pressure

Unlike the labor leaders who sat on the war boards, the rank and filers were putting pressure on the local union for action. The workers were not silent about the disparity between wages and the cost of living for they knew what the wages actually could buy. AFL convention reports of this period are full of protests and resolutions.

The 1918 convention of the Massachusetts State Federation of Labor:

“... There is a steady increase in the number of children under the age of 16 who are leaving school to go to work as a result of the necessity to supplement the family income due to the rise in the cost of living ...”

The California State Federation convention:

“High cost of living has now become the high cost of half-living ...”

The Brewery Workers Union convention in 1917:

“... wage earner finds no difficulty to keep within the advice and appeal of Food Dictator Hoover for the conservation of food” because “his earning power has not kept pace with the ever-increasing cost of all necessities of life.”

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