A Real Myth

RECENT political events have shown that the ultimate consumer, instead of being a myth, is a most surprising reality. A series of governmental investigations, however, extending over the past few years, has developed the fact that there is another factor in the tariff situation who is a real myth. This is the so-called American wage-earner. He is practically non-existent, and a tradition. The argument that he is the chief beneficiary of our protective tariff system is also legendary.

The United States Immigration Commission recently conducted exhaustive investigations by which detailed information was secured concerning more than half a million wage-earners, representing forty of the principal branches of mining and manufacturing in all industrial localities of any importance east of the Rocky Mountains. The results showed that three fifths of our industrial workers are southern and eastern Europeans, almost all of whom have come to this country during the past twenty-five years.

Only one out of every twenty of the wage-earners in our mines and factories was found to be a native American. The remainder of the operating forces are either Germans, English, Irish, Welsh, Scotch, or Scandinavians, of native or of foreign birth. In other words, the greater number of our so-called American wage-earners have been shown by a comprehensive Federal inquiry not to be American in any sense of the word. They are aliens. Among them, immigrants of non-EngIish-speaking races, and of inferior standards of living, representing the lowest level of the much-discussed ‘pauper labor of Europe,’ are numerically predominant. The native American wage-earner is practically a myth.

The displacement of the American wage-earner has been due to two causes: first, the availability of a cheap immigrant labor-supply; and secondly, the invention of improved machinery. Mechanical and other inventions adopted during recent years have done away with the necessity of skill and experience on the part of the operative and have made it possible for industrial establishments to employ unskilled and untrained workmen. Southern and eastern European immigrants have been used to supply the demand for labor created by the remarkable industrial expansion of recent years. A small proportion of native Americans has been retained in the mills and mines to fill positions of skill and responsibility. The greater number, however, have found it impossible to compete with the low standards of the recent immigrants, or to endure the working conditions imposed by the employment of the southern and eastern Europeans. As a consequence, the claim that a high tariff is needed to maintain the standards of living and of work of the American wage-earner is a fiction. Under the operation of our protective system the native Americans and older immigrants from Great Britain and northern Europe have vanished before the competition of the immigrant labor of low standards from southern and eastern Europe.

Not only does a non-restrictive immigration policy freely permit southern and eastern Europeans to compete with and displace the native American in our mines and factories, but it also creates conditions which prevent our industrial workers from sharing in the benefits of a protective tariff. The tariff imposes restrictions upon commodities and thus protects the manufacturer and enables him to control local markets and prices. On the other hand, the entrance of labor being unrestrained, the influx of a supply of low grade has had the effect of forcing almost all of the native Americans from our mines and industrial establishments, of causing a deterioration in working and living conditions, of breaking down labor unions based upon industrial occupations, and of weakening the general bargaining power of our industrial workers in selling their labor. Wage-earners in our mines, mills, and factories, of whatever nativity or race, have been unable, therefore, to secure any advantages from our protective tariff policy. This fact is obvious from a consideration of the economic condition of labor in the United States at the present time.

The comprehensive and intensive inquiry of the United States Immigration Commission has already been mentioned. This body expended $600,000, and for a period of over three years had agents and experts at work in all sections of the country collecting data. Information carefully secured concerning 26,116 adult male industrial workers employed in 38 of the leading branches of mining and manufacturing showed average annual earnings of only $475. Two fifths of 15,000 male heads of families who were employed in mines and factories were found to be earning less than $500 per annum. Slightly more than one half of these husbands and fathers were receiving less than $600 each year. The average yearly family income of 15,000 families was only $721. Three tenths of the families of the industrial establishments had an annual income under $500. These figures have been verified by the results of the Woman and Child Labor and other studies of the United States Bureau of Labor, which were conducted during the same period as those of the Immigration Commission.

The fact of striking significance which is apparent from a mere reading of the above figures is that the wages which the married employee receives from the mine, mill, or factory, are not sufficient to maintain a normal family life. In other words, the earnings of a husband are inadequate for the support of himself and his wife and children. Recourse to other sources of family income is necessary. This means the employment of the wife and children, or the keeping of boarders and lodgers.

Of the 16,000 families included in the industrial investigations of the Immigration Commission, only 40 per cent were entirely supported by the earnings of the heads. A considerable proportion of the families received an income from the earnings of wives, while slightly more than one fifth derived funds from the contributions of children. Three tenths of the households were partly supported by the payments of boarders and lodgers. The relative importance of the different sources may be illustrated by the data received relative to the families of 2,038 steel workers and of 745 cotton operatives. In the case of wage-earners in the iron and steel industry, seven tenths of the total family income was found to arise from the earnings of the husbands in the furnaces and mills, while one tenth was secured from the wages of children, and one fifth from boarders and lodgers. Among the employees of the cotton-goods manufacturing industry, only slightly more than one half of the total family income was derived from the earnings of the husbands in the mills. The children contributed three tenths of the total amount available for the maintenance of the families. The earnings of wives and the payments of boarders and lodgers, in about equal proportions, made up the remainder.

The conclusion is, therefore, apparent, that the earnings of married adult males employed in all branches of American mining and manufacturing are not large enough entirely to support their families. In the cotton and other textile mills as well as in the iron and steel plants, glass factories, bituminous, iron-ore and copper mines, and in all of the basic industries, the prevailing wage is a family and not an individual one. Mining communities, with the exception of the anthracite coal localities, which have silk and hosiery and knit-goods mills, are usually isolated and offer no opportunities for the employment of women and children. In these localities family income supplementary to the earnings of the heads, is mainly derived from taking boarders or lodgers into the homes. In communities which have developed in connection with the manufacture of iron and steel it is usually easy for the women and children of the households of the ironand steel-workers to find work. Special manufactures, such as that of cigars and tobacco, are established in these large centres of population for the special purpose of exploiting this class of labor. In the case of the manufacture of clothing and textiles, and to some extent in the glass industry, all members of the family find employment in the factories.

The result of this situation is twofold: first, the children of wage-earners are forced to leave school and seek employment as soon as they have reached the legal working age; and secondly, an independent form of family life is destroyed by the necessity of taking boarders and lodgers into the homes.

This condition of affairs has tended to lower the standard of living among our industrial workers. Congestion and unsatisfactory and unsanitary living arrangements are everywhere apparent. Of 17,000 selected families studied by the Federal government, the heads of which consisted of all classes of wage-earners, three out of every ten had boarders or lodgers. For every ten households there was an average of 34 boarders or lodgers. Rent payments being based on the number of rooms, the tendency is, of course, to hire as few rooms as possible, with the result that a high degree of congestion is the usual condition.

In the 17,000 households already referred to, there were 246 persons for every 100 sleeping-rooms. Almost two fifths of the families had three or more persons in each sleeping-room; about one fifth had four or more, and a considerable proportion five or more. In the case of some households all rooms of the apartments occupied were used for sleeping quarters. There was no separate kitchen, living-, or dining-room. One third of the families had only one room available for cooking, eating, and general living purposes. The congestion, unsatisfactory methods of living, and low standards of the families of our wage-earners may, perhaps, be more quickly grasped from the statement that the average monthly rentpayment per person was found by the Immigration Commission in its study of 17,000 households to be only $1.60. In other words, our wage-earners have not only been forced to put their children at work and to keep boarders and lodgers in order to supplement their own wages, but have also found it necessary to crowd the members of the household into the smallest possible space in order to reduce the percapita outlay for rent.

The standards of living of the southern and eastern Europeans, who now form the largest proportion of our industrial workers, are much lower than those of the native Americans or of any other class of wage-earners in our mines and factories as set forth above. The preponderance of single men among the newcomers, or, what practically amounts to the same thing, of married men without their wives and families, has made possible a boardinggroup system as the usual method of living. Under this arrangement, which prevails in all industrial localities, a married workman, as a rule, acts as head of a group of immigrant wageearners ranging in number from four to twenty. His wife does their cooking and washing and the general housekeeping. Each lodger either buys his own food and has it cooked separately, or the housewife buys it all, and its cost is distributed equally among the members of the group. The head of the household receives a fixed sum, usually $3.00 per month, from each lodger. His profit obviously increases in proportion to the number of boarders or lodgers he can keep in his house or apartment, and consequently he endeavors to crowd his rooms to their utmost capacity. All available space is utilized for sleeping purposes. Often the same beds which are occupied at night by day workers in the mills or mines are used during the day by men on the night shifts.

Every effort is made by the recent immigrants to live on a basis of minimum cheapness. By doing this and by earning as much as possible, they hope after a few years to return to their native lands with an amount of savings which to them will be a competency, or at least the means of greatly improving their economic condition. They have no permanent interest in this country or in the advancement of the wage-earners in the industries in which they are employed. Obviously, native American workmen cannot compete with their low standards, or work under the conditions which their attitude produces.

Such is the status of our industrial workers under a protective tariff policy. No more convincing proof of the failure of that system to benefit them can be found. If additional evidence be required, however, it exists in abundance in the form of the recent reports of the Tariff Board and the Federal Bureau of Corporations.

In its report on the pulp and newsprint paper industry, the Tariff Board showed that the total mill cost of making one ton of news-print paper averaged, in 1911, $32.88. The average price received for this class of paper in the New York market during the same year was $43.90. The gross profit to the manufacturer per ton was, therefore, $11.02. The labor cost was approximately only 10 per cent of the total cost and only 36 per cent of the profit to the manufacturer. In other words, the startling fact was disclosed that if the wages of the work-people in the pulp and paper mills were doubled, and if the New York price remained the same, there would still be a profit to the mill of $7.75 for each ton of news-print paper produced. Smaller increases in rates of payment to the workmen would of course have less effect upon profits and total costs.

The low proportion of labor-cost to total cost in the steel industry is also shown by the study of the cost records of the United States Steel Corporation by the Federal Bureau of Corporations. As a result of this inquiry it was found that the entire cost per ton of producing Minnesota and Michigan iron ore and delivering it to the lower lake ports was $2.88. Of this amount only 35 cents per ton, or 12 per cent of the aggregate outlay, was for labor at the mines. The expense of producing a ton of coke in the Connellsville, Pennsylvania, region was ascertained to be $3.69, out of which only 25 cents was expended for productive labor. In making pig iron, and Bessemer and open-hearth steel ingots and rails, the sum paid for labor was ascertained to be only from 3 to 5 per cent of the total cost of manufacture. Furthermore, the present duty on steel products was found to be from three to sixteen times the labor-cost per ton.

In the woolen and worsted and cotton-goods industries there are also many illustrations to be had of the low range of labor-costs, as well as striking comparisons of the high tariff duties on textiles with the small amounts paid to workmen in the mills. A yard of men’s worsted suiting was found by the Tariff Board to cost an American mill $1.71 to place on the market. The rate of payment to the weaver on this cloth was ascertained to be only 5 cents per yard, but the present tariff duty is $1.02. In manufacturing women’s serge cloth of a certain description on which there is an import duty of 49 cents per yard, the total American expense of production was shown to be 65 cents per yard plus the labor-cost of only 10 cents. On comparing foreign and domestic costs for another sample of women’s allwool serge, the total expenses of manufacturing it in the United States were discovered to be 43 cents, and the labor-cost only 9 cents per yard. The duty on a yard of this cloth, however, is 49 cents, or 1.44 per cent of the difference between the expense for labor in the United States and England, the country showing the lowest labor-cost.

As regards cotton goods, it was found that the duty on some fabrics was 2.5 per cent of the difference in labor-cost between this country and Great Britain. The inquiry of the Tariff Board also showed that the money wages of English cotton-mill workers were only one third less than those of operatives in our mills. A comparison of real wages disclosed the additional fact that the operatives in both countries were on practically the same level, with a slight advantage in purchasing power in favor of the English workmen.

Illustrations might be multiplied indefinitely to show the small proportion which labor-cost forms of the total outlay for manufacturing articles of general consumption. Numerous other cases might be cited to demonstrate how extensively, although a wide margin of protection is afforded theoretically to labor by our present tariff law, labor has failed to obtain any advantage from this margin. It is apparent that our wage-earners are not getting their proper share of tariff benefits and that their compensation might be greatly increased without any serious injury to profits or to industry. The rates paid to workers in the iron and steel, paper and news-print, and the cotton, woolen, and worsted goods industries, for example, might be doubled and still leave large profits to be divided by the manufacturer and the wholesale and retail merchants. The wage-earners in these and other branches of mining and manufacturing are not securing their share of protection from the tariff because they are not in a position to demand it. It is being obtained by the manufacturers and jobbers or distributing agents, principally the latter.

The significant, features of the entire situation may be summed up in a few words. Our liberal immigration policy has made possible the competition of immigrant laborers with American workmen. This competition has gradually become more and more direct; and, because of mechanical inventions, has within recent years penetrated to occupations which were formerly skilled, and exclusively held by Americans. In other words, we have had protection to commodities, but free labor. This labor has been without industrial experience, but it has been possible by the adoption of improved machinery in industrial establishments to use it to displace American labor.

As a consequence, labor unions and other organizations for collective action among wage-earners have been disrupted, the bargaining power arising from skill or training has been destroyed, and the American wage-earner has not been in a position either to maintain his status or to demand his share of the output of industry. The bargaining strength of the employer, on the other hand, has been improved, and ‘protection to the American wageearner’ in the face of an unrestricted alien labor-supply of a low grade has had the effect of adding to the profits of the manufacturer, mine-operator, and wholesale merchant, rather than of assisting the members of the operating forces. Under these conditions the American wage-earner has largely disappeared, and neither he nor his immigrant successor has been properly benefited by our protective tariff laws.