| Show STATUS OF CAPITAL AND LABOR AS VIEWED BY J OGDEN ARMOUR by roger W babson J O ogden oden den armour has been looked upon as a great capitalist capitali st in incapable capable of seeing the side of either the wage wage za worker or the public today however he has outwitted his critics by coming out frankly for both the organizing of wage workers and the protection of the public mr armour be beins begins b ins his discussion by saying 6 that the problem of the employer and the wage I 1 worker is not primarily to divide profits but to assure them for certainly they must be made before they can be divided dividing them says mr armour is a mighty Z easy job alon alongside aside of making them I 1 in discussing discussion the recent strikes mr armour says strikes or lockouts merely show which factor for the moment is most powerful and not in any sense determines what is right it is the strongest side which wins and this is not necessarily the side which should his complete statement stat ment as just issued at the recent conference on public relations at the babson institute is as follows efforts to take labor or capital out of the list of commodities modi ties subject to the law of supply and demand are responsible for what is generady gene raly called the struggle between capital and labor or more properly speaking the struggle between employers and wage workers always in the past a surplus of workers has meant lower wages those with labor to sell have said that capital was cracking the whip while employers pointed to increased competition and lower selling prices as both justifying and compelling lower operating costs controversy explained on the other hand when workers are scarce wages go up then those with capital invested have maintained that the wage vage workers take advantage of the situation the wage workers reply is that higher living costs justify higher wages thus it will be seen that while there any question but that wages go up and down in accordance with the law of supply and demand there are two different explanations for the phenomenon either is reasonable or unreasonable according to ones own viewpoint there are at this writing more than the usual evidences of the struggle between employers and wage workers this is due to the fact that after a long period of increasing wages there came a turn in the tide which had been carrying wages and prices to higher and higher levels with the end of the period of war inflation came as insistent demand for readjustment just what readjustment means depends largely upon who defines it to employers it means a return to normal operating costs etc while to wage workers it means lower prices on the necessities of life inasmuch as about 90 per cent of the ultimate price of commodities in general represents the labor costs incident to production manufacture distribution etc it ought to be obvious that wages and prices are in the same boat and must float or sink together thus when markets slumped and prices fell wages were started on the down trend and thereupon workers in many industries fell back upon the strike as a weapon against wage reductions economies inexorable the law of supply and demand calls for a return to normalcy and wage workers while aiming blows at employers pl are really bucking up against inexorable natural natura in a special dispatch to san francisco journal biourn 1 spi sept laws these laws permitted high wages wages b for workers and high interest rates for capital during the war period since then these laws have forced the interest rate down and they will not permit the retention of wartime wages it may be a hard pill for both capital and labor to swallow but the fact remains that they are subject to the law of supply and demand and they cannot escape it regardless gard cy less of outside interference wage earn earner e r employer difficulties will always be settled in accordance with the requirements of natural laws and all the ills and hardships of the struggle between the two factions result from resistance si stance of these laws it seems to me that the time has come when we as a nation should take steps which will enable the natural laws to operate without the painful and damaging struggles which are now the rule and which are not productive of permanent good to either employer or employed emp loye panaceas discussed panaceas for employer wage worker ills have always been on the market but in practically all cases they have been designed to produce some effect other than that which would come from the normal working out of the law of supply and demand they have sought 6 to keep keel wages up while cutting za prices or to force wages down while maintaining price levels or have otherwise disregarded the normal and natural relations between wages and prices therefore these panaceas have not worked and never will work the sooner it is recognized that natural laws will ivill prevail the sooner will we find the solution for our troubles the proper solution must bring the same result that the normal working of the law would bring but must avoid the evils and ills and damages incident thereto the fight between employer and wage earner has been described as having to do with a division of the p profits profits if that were true the problem would be much simpler than it really is division of the profits is merely a phase of the matter the big problem is to make the profits in the first place it is astounding how much ignorance there is relative to the profits of business the lay mind assumes that the margin between the original t cost and the ultimate selling price is profit the P part art that operating costs and overhead expenses play in wiping E out this margin gets scant consideration when a business pays a dollar for raw material and sells the finished product for 2 the layman says there is a dollar profit but as often as not such a margin between cost and price means a loss it may cost considerable to turn the raw product into the finished article since the labor involved and the equipment used may be a very big expense handling increases costs on top of that there will be storage char charges and freight bills and sales costs there are a dozen charges that enter in and conspire to wipe out the margin and not the least of these is represented by the tax that the business pays the sum total of all its operating and overhead charges may easily wipe out what appears to be a wide margin between raw product costs and finished prices men work vor for a livelihood and capital works for interest and there always will be room for difference of opinion as to what wha constitutes a good livelihood and a good interest but there I 1 need be neither men nor 01 ol no question about this fact money will work without a return the problem of waged wage earner and employer then is 1 not to divide profits but t to assure profits for certai certainly nl I 1 yi they oey must be made before they can be divided dividing them is a mighty easy job alongside 1 I of making them everybody has a right to opinions as to the cure for industrial ills and the business with which I 1 am connected is now low engaged in trying out a plan which holds forth great pron promise lise it is not designed 6 to bring about the millennium neither does it promise to give workers high wages and employers high ZD profits plan tried out it ift is founded on knowledge that the business must prosper if either employed or employer is to prosper with the two factors working 6 together with mutual understanding and recognition 1 of the problems confronting 11 1 1 the industry the results of the law of supply and demand can be attained without injury to either factor and with consequent benefit to both this is being accomplished with us by the workers organizing into anio what resembles political constituencies coil they ele electing i acting their representatives to minor and major conference boards the minor boards consider matters of purely local and departmental interest while the major boards broaden the scope of their interests up to the point where the general conference board sits in judgment on problems affecting the entire organization the conference boards are made up of equal numbers of representatives of employed emp loyes and of the management and all their decisions call for agreements between the two factions the plan assumes that reasonable men who are acquainted with all the facts about a matter will reach an agreement when they place their feet under the same table and give honest consideration to the problem before them on the outside chance that some situation may arise in which the two factions cannot agree after such honest and careful consideration provision is made for arbitration but it is not expected that this will be necessary union ideals praised it takes a very narrow minded person t to 0 believe that the announced aims of unionism are other than right and just but there is also the certainty that in practice the relations between unions and employers will be tests of strength length A strike or a lockout merely shows which factor is for the moment dominant and in no sense determines what is right or what is best for the business and when I 1 ay y best for the business I 1 mean best for those who are vesting their labor as well as those who are investing their ir capital we do not expect this plan to acco accomplish malish the impossible but do believe that when reasonable men get together to discuss and consider mutual problems a solution can n be found which will obviate tests of strength such as the e strike and the lockout under existing conditions 95 per cent of the people are made to suffer mentally physically and financially when 5 per cent engage in industrial dispute everyone agrees rees that the whole public ought not be made to suffer by reason ason of wage earner earn er employer empl oyer disputes but as long as certain inalienable continue to rights now recognized as be so recognized the public will remain the innocent bystander who gets the most of the bricks wage earners earners say they have a right to refuse work players employers Pl claim the same right wage workers say they haare ave a right to fight for what is due them employers make a lini similar ilar claim I 1 appreciate the danger of advocating the rogation abrogation of any rights but it does seem that the public has some rights and that its rights have precedence over the rights of any minor factions be they workers or employers or stockholders arbitration necessary 1 I am a firm believer in the fact that men in the main are reasonable reasonable and that when they understand what is the re requirement ment of economic law they will find a way to adjust themselves to it but if they fail to do so and if their failure is detrimental to public interest then there ought to be means for forcing settlement through compulsory arbitration tra tion I 1 am today an advocate of compulsory arbitration as a means for andin ending Z employer wage worker disputes which cannot be ended by mutual agreement 1 I 1 state to the babson institute that there should be a tribunal of such character that its integrity 11 and fairness is beyond question upon that tribunal should rest responsibility for settling 6 difficulties when direct negotiations fail the tribunal should have ample powers to compel submission of disputes to it and to enforce its findings only in that way can the interests of the great majority be safeguarded strife between employers and wage earners based on misunderstanding of economic laws must be brou brought ht to an end |
