ADJUSTING WAGES TO COST OF LIVING
Adjusting Wages To Cost Of Living Schemes Adopted By Various Firms Outlined In Monthly Labor Review VARIOUS plans for adjusting wages to the increased cost of living are outlined by Professor...
...Rent was assumed to have advanced 10 per cent...
...Others gave similiar bonuses in the spring of 1917...
...Since then the index number adjustments have ceased, but a half-yearly revision of the wage scale is to be made by the wage committee...
...The Bankers' Trust Co., appointed a committee to make a further investigation...
...Fisher points out, wages usually lag behind...
...In this case the "H...
...This amounted to a compensation for about 60 per cent of the increased living cost...
...In June, 1918, the index figures had gone up 12 per cent, and this 12 per cent was added to the wage rate then in existence, and a general revision of all base rates was made at the same time...
...A first adjustment of 16 per cent was made as representing the increase of prices during the preceding year...
...In each suceeding month after January an advance or deduction of 1 per cent was made for each change of 20 points in the Bradstreet number...
...To make it conservative this figure was reduced to 80 per cent., and was applied to that part of the budget which went for food and clothing...
...The Oneida community adopted on January 1, 1917, a system by which each workman received two weekly envelopes, one containing his wages and the other a percentage of the wages based on Bradstreet's index number for wholesale prices...
...A, G. W„ Oakfield, Wis...
...One Cleveland company accepted such a scheme on the recommendation of an employees' organization, which consisted of a house of representatives, a senate, and a cabinet...
...Fisher says, in view of the extension of Government ownership and control, the device is valuable as tending to create loyalty and content...
...It was found that the cost of living as to food and clothing in 1917 was 86.2 per cent higher than in 1915...
...Fisher points out that because of the high wages due to the war emergency, the method of wage adjustment described is especially valuable...
...The plan was in operation for the first six months of 1918...
...Strikes have been settled and wage increases made specifically on the basis of index numbers...
...The principle is also recognized by the Ship Building Labor Adjustment Board, which has adopted the plan of making half-yearly adjustments in all ship-building centers, based on changes in the cost of living as determined for the board by the Bureau of Labor Statistics...
...During the upheaval of prices in America in 1915-16 a number of companies tried to compensate their employees for the decrease in the buying power of their salaries by giving them Christmas presents, which constituted a fixed percentage of their pay...
...C. L." envelope was given monthly...
...The committee found that the cost of living in 1916 was 21 per cent higher than in 1915 on 54 necessities of life...
...Enclosed herewith please find $1.00 sill attached to this letter...
...The Bankers' Trust Co., of New York, for example, appointed a special committee of employees to investigate increasing living costs...
...Thus, for example, a clerk receiving $1,000 a year and employed in July 1916, was entitled to $178.87...
...Even when there are special influences tending to raise wages, such as a shortage of labor caused by an army draft, or by a demand for workers in war industries, there is no such close correspondence as ought to exist between prices and wages...
...These adjustments, however, it was found necessary to revise as the cost of living continued to increase...
...The committee reported again in June 1918, favoring a reduction of the percentage of compensation because it was felt that the employees should bear a small proportion of the increase in living costs...
...When prices are rising Prof...
...We lave taken your magazine ever sine* the first issue and if s clean and to the point...
...Others made a more scientific adjustment...
...Adjusting Wages To Cost Of Living Schemes Adopted By Various Firms Outlined In Monthly Labor Review VARIOUS plans for adjusting wages to the increased cost of living are outlined by Professor Irving Fisher, of the Yale department of political economy, in the Monthly Labor Review of the Bureau of Labor Statistics, United States Department of Labor...
...The board is now considering the introduction of quarterly index number adjustments...
...Furthermore, Prof...
...The net result was that the percentage increase was applied to 60 per cent of the salaries...
...The chief use of index numbers in settling wage disputes has been by the National War Labor Board...
...Similar plans were adopted by firms in Duluth and Cleveland...
...Firms which have advanced wages on the bases of index numbers can make a reduction with an understanding on the part of the employees that it is the result of a change in prices, just as were the previous increases...
...Actual compensation, however, was reckoned relatively to more recent dates than 1915, varying according to the time of entering service...
...We hope it will continue to tell the truth to Wisconsin people^—Mrs...
...This led naturally to the idea of a periodical adjustment...
...Corresponding increases were therefore granted on that part of employees' salaries which was estimated to be expended for necessities...
Vol. 11 • February 1919 • No. 2
