Show Protection and Wages IT is generally admitted by the advocates advocates advocates cates of the protective tariff in America that the primary purpose and justification l- l tion of such a tariff is to raise the rate of wages in this country At least this is the aspect the question usually bears as presented to their constituents by the political press and by candidates candidates candidates candi candi- dates for office on both sides What is really to be desired of course is that the standard of living should be raised for the whole people without regard to locality And a general advance in wages would mean nothing else than this unless the advance were not real but only nominal The argument for or against the assumption assumption assumption as as- that protection raises wages is generally substantiated by citing particular particular particular par par- cases as e. e g. g the wages of men engaged in a certain employment say workers steel-workers in a particular locality are higher or lower as the case may be during a period of protection than during a period of free trade Usually no attempt is made to generalise these particular cases that is they are seldom seldom seldom sel sel- dom summed up so as to show that the average power of the average average average aver aver- age days day's wage is greater or less under tariff conditions than under trade free-trade conditions This would doubtless be too much for the grasp of the average political audience and thus perhaps is explained the extreme fondness of the political orator for particulars and imposing arrays of figures given as they usually are without reference to logical sequence or to any clearly outlined outlined outlined out out- lined theory Particular cases however though they may serve very well as baits for catching voters are not enough to justify the position of the tariff advocate advocate advocate cate unless they can be made to prove two things 1 That the aggregate wealth of the people is increased by protection 2 That protection if it bring about this increase of the the aggregate wealth will not at the same time make it possible for the increase in wealth to together together together to- to gether with a part of the original amount to be absorbed by a relatively small number of individuals Let us consider the first of these prop prop- It may easily be shown that protection protection protection tion raises the rate of wages of a tan class or of certain classes of workmen since the relative rate of wages may be said to depend 1 upon the extent of available resources in a country at a given time 2 upon the extent to which none but competent men are engaged in the carrying on of enterprises and 3 3 upon the extent to which outside capital may be induced to come com into the given country and engage in in production there Manifestly Manifestly Manifestly Mani Mani- protection cannot increase the natural resources of a country but it may raise the standard of efficiency of both employer and employed in any given industry by making it more profitable profitable profitable profit profit- able to carry carryon on such industry in the given country than elsewhere In the same way it may induce outside capital to come into the country It is clear then that protection may in particular cases raise the rate of wages But it sometimes happens that hat both these causes become annulled ed or are wholly inoperative as may maybe maybe maybe be seen by a comparison of the conditions conditions conditions condi condi- in h high gh protective countries with those in countries where the import duties are low It may even happen that the check put upon competition by bythe bythe bythe the protective tariff will cause a deterioration deterioration deterioration deter deter- in the skill of the protected workman and also in the business skill of the conductors of the protected industry so that the advantages given by protection would be counterbalanced That this may happen is shown by bythe bythe the converse re fact that generally wages are higher in free trade than In m high tariff countries Further it is not susceptible of proof that wages will be advanced by protection beyond the amount of the tariff levied Therefore to determine whether or not protection actually raises the rate of wages in all employments we must ascertain who it itis itis itis is that pays the amount of the tariff impose Let us take an illustration Suppose it is thought advisable to levy an import duty upon wollen goods in order that the same may be manufactured manufactured manu manu- in this country it being of course understood that local manufactures manufactures manufactures tures are unable to compete with the foreign trade Let us assume that the cost of production in foreign countries is 20 per cent below what the same articles can be e produced for in America Evidently the tariff to be effective must amount to at least 20 per cent on the articles in question and since the tariff was necessary in order to tomake tomake tomake make it possible to produce the goods goodsin in America without lowering the wages obviously an equal amount will be added to the selling price of the goods so that an article which was sold for forone forone forone one dollar before the tariff was imposed imposed imposed im im- posed will bring one dollar and twenty cents when the tariff is in operation Or to complete the illustration the suit of clothes the farmer or the laborer had previously been able to buy for ten dollars will under tariff conditions cost him twelve dollars Other things equal and provided employers do not com combine bine to keep up the rate zate of profits th the wages of the manufacturing laborer will have been raised in proportion but the same cannot be said of the wages ages of the farmer He must sell in inthe the worlds world's market since the agricultural ral products of the country are vastly in excess of the home demand Therefore Therefore There There- fore if wheat was selling at a dollar a bushel before the levying of the tariff on woolen goods other things equal it will be selling at just one dollar a bushel after the imposition of of the i tariff so that the farmer must now pay pay not ten bushels of wheat only for his suit of clothes but an an additional two bushels That is the farmer pays the laborer his advance in wages The result is then that there is simply a transference of benefits from one class to another without any increase increase increase in in- crease in the total wealth of the country country country coun coun- try or in the average wages of the workingmen The total wealth may even be diminished for the tariff may have been levied to compensate for differences in natural facilities which favored favorer production in foreign countries in which case more labor would have to be applied to obtain the same re results results results re- re in this country as in other coun coun- tries The result would be a ruinous counter-competition counter of the factory against the farm ending in the drawing off of a portion of the farm labor to engage in the better paid but less productive productive productive pro pro- labor of the mills until an equilibrium should have again been reached on a basis of greater average cost of production The great unexhausted resources of this his country have been the one cause of high wages No one would engage in manufacture so long as he could get the manufactured articles he desired by exchanging for them farm products which represented a less amount of labor than would be required to produce produce produce pro pro- duce the same articles at home That Thatis is to say the manufacturer must be paid sufficient wages to keep the laborer in the factory and out of the field It must appear to the latter that he can live at least as comfortably and with as little exertion in the former pursuit as in the latter But Butth th the conditions of agriculture are vastly different in the European countries from what they are in America There the soil is exhausted by centuries of use use and andis IS is pressed to the last limit of diminishing returns here it requires comparatively little labor to produce large crops hitherto there has always been an abundance oi ot free freeland freeland freeland land to be had for the taking I It is therefore the condition of agriculture in the old countries that under free competition determines the price the American farmer must pay for manufactured manufactured manufactured manu manu- products and not the condition condition condition condi condi- tion of in America Which is is to say we must pay the English or orthe orthe orthe the German not enough to to keep him out of agriculture in America with its fertile lands and numerous resources but enough only to keep him out but of agriculture in the community in which he lives with its exhausted soil and its generally overwrought overwrought over over- wrought rought conditions And whatever amounts are appropriated by the governments of the various countries which which- export to America for the support support support sup sup- port of in those countries countries countries coun coun- tries tend also to increase the difference in our favor The conclusion is then that 1 protection protection protection pro pro- cannot advance the wages of the whole people of the United States but may on the contrary increase the cost of the necessaries of life to the whole people And 2 in these days of great combines there can never be beany beany beany any certainty that employers will not appropriate to their own use the whole of the increased selling price of the protected commodities Under present conditions there is still another consideration that seems to render protective tariff arguments worse than self self The whole aim of the tariff is to increase home production and to wages It cannot cannot cannot can can- not raise the wages of the farmer since he must sell not in in the protected market but in the worlds world's market What then would be the result Suppose there were were in in operation a tariff high enough to exclude all articles of foreign manufacture that can be produced in this country and in consequence consequence consequence con con- sequence wages for those enga engaged ed in such manufactures were in like ratio hi higher her than in foreign countries Can it be doubted that the foreign laborers of this class would at once immigrate to America It must be borne in mind that all require skilled labor of one kind or another and the most radical exclusionist exclusion- exclusion would hardly advocate closing our ports to such an element Such a policy would then transfer to our shores the manufacturing population of the old world and its dependencies and at the same time increase their wages wages' by the amount of the tariff on onman man manufactured articles Such has hag actually actually actually ac ac- been the result under past tariff conditions The whole eastern sections where protected industries have been established have been filling rilling up with a mixed foreign population It is estimated that more than third one-third of the factory population of New England England England Eng Eng- land is now made up of French Cana Cana- Add to to this the number of recently imported foreigners of other nationalities and how many Americans remain to share the benefits of protection protection protection tion As shown above the farming part of the community must pay these extra wages which induce these foreigners to leave their occupations in their own countries and come to to- ours That is we invite them to share the benefits of our great resources not on equal terms but giving them the lions lion's share for the tariff makes the adjustment adjustment adjustment adjust adjust- ment not on the basis of true conditions conditions conditions condi condi- which is a continuous decrease of returns to labor applied on the land but on the basis of the conditions existing existing exist exist- in ing at the time of the enactment of the tariff laws For at a given time it may require a tariff of 40 per cent to enable manufacturers to pay wages sufficiently high to induce men to engage engage engage en en- gage in factory rather than farm labor but in ten or even five years from that time because of the operation operation operation opera opera- tion of the law of decreasing returns in agriculture the operation of the tariff will have thrown the balance in favor of the manufacturer making it necessary necessary necessary sary for the farmer if he would share the advantages of protection to sell his land and implements and offer his services to the manufacturer And it itis itis itis is evident that he would be compelled to sell at a a. a sacrifice on account of the burden imposed upon agriculture by the tariff The result would be in the end the completion of a vicious circle i. i e. e a readjustment on a basis of increased cost of production as explained above but with the additional evil of an enormous enormous enormous enor foreign population who would have brought their foreign customs with them and of the segregation tion made possible nay even required by the conditions of factory labor would retain them to such a degree that they would constitute a constant menace menace to American institutions Unless Americans are a race of fools who dont don't know what industries would be profitable under our natural conditions conditions conditions condi condi- but must continually be dictated by their government that is must have a tariff or a bounty law to indicate indicate indicate indi indi- cate what industry should be built up it is obviously as impossible to increase increase increase in in- crease the wealth and the average wages of their country by means of a protective tariff as it is for a man man to raise himself into mid-air mid by the band of his trousers The comparison is a homely and hackneyed one but exactly to the point poin t. t Whenever it happens that that with our natural resources it is more advantageous advantageous advantageous for us to manufacture all our own products than to import some of them theIr from abroad be sure there will not be wanting Yankees enough to begin the necessary Of course they will wait wai t for the if there is any hope of getting it but they will understand well enough that Jonathan Hayseed will Lave have nave to foot the bill and will not hesitate to pull pun the wool of his own sheep over his eyes to keep seeing it too Rex |