Have Wages Kept Pace with the Cost of Living?
| Author | Erville B. Woods |
| Published date | 01 May 1920 |
| Date | 01 May 1920 |
| DOI | http://doi.org/10.1177/000271622008900118 |
| Subject Matter | Articles |
135
Have
Wages
Kept
Pace
with
the
Cost
of
Living?
By
ERVILLE
B.
WOODS
Dartmouth
College
IN
attempting
an
answer
to
this
-*-
question
it
is
necessary,
at
the
outset,
to
examine
the
terms
used
and
the
general
form
of
the
inquiry.
Let
us
take
up
in
order,
therefore,
three
points
of
definition :
&dquo;Wages,&dquo;
&dquo;Cost
of
Living,&dquo;
and
the
period
during
which
it
is
proposed
to
compare
the
movements
of
the
two
factors.
THE
MEANING
OF
WAGES
AND
THE
COST
OF
LIVING
Wage
Rates
and
Actual
Earnings
First,
with
regard
to
wages:
It
is
quite
evident
that
higher
wages
paid
in
a
sufficiently
depreciated
currency
might
leave
the
recipient
poorer
than
before.
It
is
nearly
as
obvious
that
high
money
wages
in
an
era
of
high
prices
may
confer
only
an
illusory
prosperity
upon
the
wage
earner.
Here
is
the
real
point
of
this
inquiry.
We
wish
to
ascertain
whether
real
wages
have
been
rising
or
falling,
for
in
a
time
like
the
present
it is
unlikely
that
they
could
have
remained
wholly
stationary.
For
any
period
during
which
the
prices
of
the
items
for
which
the
worker
expends
his
income
have
risen
more
than
has
his
money
wage,
we
must
conclude
that
real
wages
have
fallen.
Conversely,
for
any
period
during
which
the
wages
of
the
worker
have
risen
more
than
has
the
cost
of his
customary
budget,
for
such
a
period
there
has
clearly
been
an
increase
in
real
wages.
Another
phase
of
the
definition
of
wages
should
be
noticed.
It
concerns
the
distinction
between
the
wage
rate
and
actual
earnings.
The
former
is
stated
in
terms
of
cents
per
hour,
dollars
per
week
or
month,
or
dollars
or
cents
per
unit
of
work
performed;
the
pay
envelope,
however,
contains
a
sum
of
money,
the
amount
of
which
depends
in
part
upon
considerations
other
than
the
wage
rate.
If
a
machinist
earned
50
cents
an
hour,
assuming
an
eight
hour
day,
and
worked
overtime
at
time
and
a
half
on
week
days
and
double
time
on
Sundays,
he
might
earn
by
working
10
hours
a
day,
under
war
conditions,
not
merely
48
x
50
cents
or
$~4
a
week,
but,
in
addition,
he
would
be
paid
for
two
hours
of
overtime
(for
which
he
would
receive
three
hours
pay)
each
week
day.
This
would
amount
to
18
hours
a
week;
if
he
worked
10
hours
on
Sunday
also,
he
would
be
paid
for
~0
hours’
work.
His
overtime
and
Sunday
work
would,
therefore,
net
him
38
hours
at
50~,
or
$19,
in
addition
to
the
$~4
earned
during
regular
time.
His
pay
envelope
would
thus
contain
$43
for
a
week’s
work.
Suppose
now,
that the
machinist’s
&dquo;pay,&dquo;
i.e.,
his
rate,
receives
a
rather
extreme
increase
of
50
per
cent,
which
advances
him
to
75
cents
an
hour,
and,
at
the
same
time,
the
shop
in
which
he
is
employed
returns
to
its
former
48-hour
week.
He
will
now
find
that
his
pay
envelope
contains
$36
(48 x
75
cents).
This
is
16
per
cent
less
than
he
had
been
receiving.
Thus,
a
50
per
cent
increase
in
the
wage
rate,
coupled
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