The German Labor and Wage Situation.

Hokitika Guardian, 27 September 1921, Page 4

The German Labor and Wage Situation.

A well-informed writer in a recent number of the London Economist discusses at some length the labor situation in Germany and the tendency of wages. He throws light upon a subject very generally misunderstood. He says, in part:— The underlying assumption that throughout a long term of years German cheapness, which is a vagary of the incalculable foreign exchanges, will prevail, is not justified by observation, any more than it is by economic theory. German gold prices, as I showed last week, have been overtaking the higher gold prices of the gold exchange countries. German iioiiiinal prices (commodities,) are to-day almost exactly the same as they were in February, 1020, when the dollar exchange touched UM marks; the dollar is tvday (10; mid in the meantime the gold prices of the United States have fallen to about half their maximum. The belief that the German workman works for long hours is mistaken. He works for eight hours, in coal mines tor -even hours; if a bill already submitted ts passed lie will work in all mines fur seven hours, and last year in the Ruhr mines a general strike was threaten'd in favor of six hours. The assumption that German workmen wotk, and will work, for extremely low wages is based on confusion between nominal wages, gold wages, and real wages. German gold wages are very low. Tno German real wage, the only wage thill comes into account in considering work-ing-class "content,’’ and "apparent acqiiisieme." is lint low. Ii is considerably higher than before the war. The cost of living index (Statistical : Bureau's) is NSO ; the Wages Index (Frankfurter Zcitiing'sl is 1.132: in oilier words, real wages are 30 per cent higher than before the war. Further German workmen show the same persistency as British nr American workmen in pushing up or keeping up wages. Between January, 102(1, and April, 1021, ihe cost nl' living in Germany rose oil per rent, whereas nominal wages, always as' (lie result of agitation, rose 120 |>er cent ; so that the present movement is alloeether lor a higher real wage. Naturally, in foreign trade competition it is not real wages, or nominal wages, but gold wages that count, lint the German nominal cost of living i- kept at its present level only by price-restriction and food-subsidizing. This is no permanent system ; a great part of it has been abolished, and the rest is to be abolished ; and should the cost of living in consequence rise there is no doubt that workmen will demand higher wages as they did when cost ol liviiiy; ui«s ris,iny; in an-'l tins, y; a stable exchange, will mean a rise in gold wages. A new vagary ol the exchanges land the mark exchange in three months of 11)2(1 rose 200 per cent) may upset all these calculations, so that calculations for -Hi years ahead bused on a present exchange level are not convincing.

In fact, it is not easy to see low the reparations payments can lie made unless the German workman does ci’iisent to work long hours lor low wages; the dillieiihy is that German workmen -how no conscious lies; nl the necessity. The practicability of the plan to compel Germanv to pay in lertain kinds ol goods which do not compote with Rriiish industry is doubtful. The coal output of Germany cannot be rapidly increased; for two years the aiteiiiptmuilc have for labor and technical reasons. failed; potash is not being bought, by Allii'iica, the elliet iurmor customer, because it is already 100 dear, and Frame, the . bid' reparations claimant, is herself exporting potash ; and the sugar abundance which Mr McKenna points to does mu exist. The finances of the German Govern m ,.;,i are still in bad shape, with the volume of currency increasing, bill too inneb emphasis should not be placed upon this. There is reason to believe Dial the situation is not so Ini' out ol band as may appear, and that by doing away with food subsidies, placing Die railroads on a self-supporting basis and other reforms the sit nation may lie rapidly improved. The crops in Germany this year aie Vi .rv good, which will i-erinit a reduction in food importations.