BUYING POWER

Evening Post, Volume CXIV, Issue 123, 21 November 1932, Page 9

BUYING POWER

PROBLEM OF DEPRESSION

MASSES OF AMERICA

(From "The Post's" Representative.)

3SO3W YOEK, 12th October. . :The American Federation of Labour officially estimates at; 1,140,000 the number of unemployed in the "United States. At the same time,-it notes that the present trend indicates a period of convalescence, although'it does not expect anything in the nature of a cure- until the nation's buying power has been restored. . Those who are in. employment have the satisfaction-of knowing that the dollar to-day buys as. much'as a dollar aiid a half in 1926, the peak of post-war prosperity. .In other words, an employee whose salary has been reduced 33 per cent, from what he earned six years ago is in an equally strong condition.

Wage and small-salaried workers in the United States, receiving less than £.1000 a, year, buy S3 per cent, of the goods and services consumed in a year of active business. The effect of the loss in workers' income is seen in the drastic decline in the production of motor-cars as they, own and operate over half tho passenger cars in the country. It is equally seen in the number of telephones cancelled. Another index of their conditions is the reduction of home and apartment, building, as workers' families havo been forced to "double up," and in the losses in such consumer industries as textiles, clothing, house furnishings, and i ther. products which make up the stream of retail trade.- - -

To enhance- the prospect- of public buying, 'the federation is asking that wages be- increased. " The- wage-de-flation theory, "declares the president, Mr. W. A. Green, "arose in a scarcity economy, where production could not supply enough for all. But times have changed; we are suffering from problems of over-supply and. under-eon-' sumption.. Mass production industries cannot grow unless mass-buying increases. At present, with prices boginning to rise, consuming power will decline unless wages rise also."

Even now, ho says, at the bottom of the depression, many corporations and companies could increase the wages paid to workers. In the past eight months, 190 companies have paid extra dividends, and twenty-seven have increased their dividends. If the investor's income rises, so should that of the worker. Ho pays a tribute to some companies that are restoring salaries and wages to last year's rate, Which carried only one previous reduction. The- situation is shrouded in uncertainty, however, owing to tho decision of all the railroads to make a further— in some cases a third—wages cut, owing to the continued loss iv receipts.