BRITAIN'SINCOME

Dominion, Volume 12, Issue 196, 14 May 1919, Page 9

BRITAIN'SINCOME

; THE NATION'S WAGES INTERESTING. STATISTICS / The national income is not so very big, 1 and if it were divided out'among all our families it 'would not seem big at all. .Such (says "Public Opinion") seems to be the conclusion of Professor Arthur L. I.Bowley, Professor' of Statistics in .the. University of London, : in a valuable ' document on "The Division of tho Products of Industry." He sets out to examine theso two statements:— "Two-thirds of (the population), that is to say, the.manual working class, ob- . tain for all their needs only one-third of tho produce of each year's work."—"Tho Principles of the Labour Party," Sidney and Beatrice Webb, 1918. "Let a close examination bo mado of the., whole industry of any country, and I am much, mistaken if the result will not be approximately as follows:—Sov- ' enty-five percent, of tho total sale valuo oZ the commodities produced will have' ; pone to pay the persons engaged in producing them."—"The Rights and Responsibilities of Capital," Sir Hurli Bell, Manchester Statistical Society, 1918. . / •■ . The National.lncome. "Tho national income," srys Dr. Bowley, ."as- tho total of the individual incomes is generally designated, is estimated as amounting to nearly in 1911. ■ Of this. total about; 'iM.fIOO,- . .000 -was received .ae wiiges, and .'approximately .£260,000,000 was received as salaries or earned bv independent workers, farmers on a moderate scale, small Tioldjbk... and other 'small' employers. '.£936.000,000' was ' received by -about 1,100,000 income-tax payers. Tho remainder is. made up of. various small items. ■■' . . "Of the income-tax payers' income, .about ; was , 'derived', from 'investments abroad, and was in no sense the product of iho manual .work at home in the year 1911, whatever may ■ havo been its origin in the past. By now a considerable part of the capital from which this was derived has been brought home in the form of munitions and food, and the former owners have. ;received •war-stock in exchange; The. income, from this part is now .replaced'by. a debt from the'-nation, to'the holders of the .warstock. ' /' ...-.■ '■': "The:- income' derived .from '.'the produce of the year's'-work,'- with which alone we are concerned in the sequel, is approximately .£1,300,000,000;.. of> which over- is , received 'by manual wage-earners and other workers,- whose earninge are ..less than £160 per annum. '/We'wilL first-examine from a general ixrint of. view what: is the-'maximum sum that, can, even on extreme hypotheses,..be regarded as-luxuriously or'unnecessarily spent by persons with incomes of JJI6O or more, and is the broadest target for attack by those who wish to obtain a less.unequal distribution of income.' .The Income.Taxpayers. ■ - "Tho Lhome-income' of- income taxpayers was about £742,000,000. Of this ,£17,000,000 f is estimated as- evading -tax; about ,£175,000,000 was taxed atthe rate for- unearned income; ,£10,000,000 of- farmers' income was not taxable;-the remaining .£240,000,000 was taxedatone.of the. rates for'earned incomes. ;•'...•' ■■' ■■•"■ "In estimating the maximum open to attack-it is assumed for the purposes of argument that tho whole of rent and. interest could be transferred from its present owners to the nation;- but the ■£50,000,000 .in -the possession' of people with less than .£IGO per annum, which include the.result's of small savings, pensions, annuities, and incomes of people incapable of work, is regarded as nontransferable. . '.. ■ • ■" .""." . . .-.;... , ■■■ "Earned \ incomes' are,also,- of course, . open to attack. A- sufficiently supposition in these cases is that every income might !»' rreduced to <£IGO. (at the price levels of 1911). Putting aside -the email amount of taxed faimers'- income, we have ,£235.000,000- in question, divided between salaries, and profits. - "The salaries of 355.000 'employees of the Government, companies, : firms, or individuals account for nearly .£130,000,000, the average salary being' J!340. About - .40,000 -salaries :o£i;over ,;C'soOr;were assess--cd, thp -aggregate - of: -these- bein? , r.£38,000.000. If all. salaries were' Teduced to ,£l6O. while none below the sum was increased, the amount saved would b.babout. JJ70.000.000, equal to 9 per cent, of the national -wago bill; :•.."There.remains iJE10.';,OOO,O0O paying tax at.the lower rates; this is the earned in- ■ come if. professional men, employers,.- or firms, using no , 'capital'or .working ou their own capital, whose individual incomes, froin all sources' are less- .than .X3fl(!0 per annum,.- The averaen assessment per head in these groups (including 'tlinss over J!3000) U about .£555 gross, say. wEfSOf) net. This affords a rough estimate of the average profits of nrofrssional and business. men of all kinds whose earned incomes are over XtGO.per annum." Supposition About Unearned Income, "If now we take the supposition , that nil. 'unearned' iricome could have been nationalised, except : that belonging to persons with less than £M all tpld, ami all salaries,' professional earnings,, and employers' profits reduced to! .£IOO per, liead, while .lower salaries, wore not raised, and the surplus devoted to national objects, perhaps ,£550,00l),000 would-have . been available., .. i .-':■■.. "Actually, the cutting down of earned Incomes would, in fact, seriously diminish the power as well as , the. will to }york,

niid a rooil 3oal of income would disappear in . the . process of transfer. .£550,000,000 is then an outside estimate of tho part of home-produced income •that is the. target of attack by extreme Socialists. j "Out o'F. this sum, however, tlie great part of national saving is made and a large part of national expenses are met; wnen these are subtracted only .5200 to .£250 millions remain, which on tho. cxtremest reckoning can have been spent out of home-produced income by the rich or moderately well-off on anything of Hie nature of luxury. This sum would have little more than sufficed to bring (lie wages of adult men and women up to tho minimum of 355. 3d. weekly for n man, and 20s, for a woman, which" Mr. Rowntree, in The Human Needs of Labour,' estimates ae reasonable. "In fact, the spendable wealth of the nation derived from home industry, has been grossly exaggerate!) by loose reasoning - ', - Possible Family incomes. "Beforo the war the home income would not have yielded more than jilSO gross annually per family of five, or ,£l7O net after all rates aud taxes were paid and an adequate sum invested in homn industries. The income brought home from abroad .amounted to about or ,£lO a family. The avern#o family is not, however, five, as is frequently assumed, but about 4.1 persons; the number of households is uol" 9,000,000, an just tilken, but-about 10,000,000, and the average net income of a family would have fjccn d>ls3 from home product, cr .£l62' if income from abroad is included. If this sum is compared with pre-war Wages it must' lie remember that there nrt-on an average nearly two .earners to n family. ' • > ' 'I'i'he' wealth of the country, .however divided, was .insufficient before the var for a general high standard; there is nothing as yet to show that it will be greater in the future. Hence tie most important tusk—more important immediately than the improvement of the division • of the prodnct—incumbent on employers and workmen alike, is to increase tho national product, mid that without sacrificing leisure and the amenities of 'life." '. ' . '