MILL EFFICIENCY
THE same general considerations which apply to raw wool hold good as to its manufactures. There is no such thing as an average cost of production of woolen cloth in the United States. The enormous variety of cloths produced in the same mill proved an insuperable obstacle to the Tariff Board, which gave up the attempt to ascertain the actual cost of production. Instead, it undertook to obtain estimates from manufacturers of the cost of producing cloths, samples of which were furnished to them by the board. Assuming that all the estimates were made in good faith and that the agents of the board were all competent and equal to the task of checking them with the meager means at their command, the average costs even by the board represent widely differing conditions of industrial efficiency.
Industrial efficiency depends on a great many conditions an adequate discussion of which would take in far afield. One fact, however, stands out preëminently, and must be emphasized until it is seared into the consciousness and conscience of the American citizen, and that is that industrial efficiency, which is synonymous with low-labor cost, does not mean, or depend upon, low wages. Yet the lower wages in Europe constitute the stock argument in every plea for protection that is dinned into the ears of Congress.
Not being in a position to make a comprehensive inquiry into the efficiency of American mills in the woolen industry, the Tariff Board made a study of labor efficiency in the various process of wool manufacture in connection with output and wages paid. Almost invariably the mill paying higher wages per hour showed lower costs than its competitor with lower wages.
Thus, in wool scouring the lowest average wages paid to machine-operatives in the thirty mills examined was found to be 12.16 cents per hour, and the highest 17.79. Yet the low-wage mill showed a labor cost of twenty-one cents per hundred pounds of wool, while the high-wage mill had a cost of only fifteen cents. One of the reasons for this puzzling situation was that the low-wage mill paid nine cents per hundred pounds for supervisory labor, such as foremen, etc., while the high-wage mill paid only six cents. Apparently well-paid labor needs less driving and supervising than low-paid labor.
In the carding department of seventeen worsted mills the mill paying its machine-operatives an average wage of 13.18 cents per hour had a machine labor cost of four cents per hundred pounds, while the mill paying its machine-operatives only 11.86 cents per hour had a cost of twenty-five cents per hundred pounds. This was due largely to the fact that the lower-cost-high-wage mill had machinery enabling every operator to turn out more than 326 pounds per hour, while the high-cost-low-wage mill it turning out less than forty-eight pounds per hour.
The same tendency was observed in the carding departments of twenty-six woolen mills. The mill with the highest machine output per man per hour, namely 57.7 pounds, had a machinery-labor cost of twenty-three cents per hundred pounds, while the mill with a machine output of only six pounds per operative per hour had a cost of $1.64 per hundred pounds. Yet this mill, with a cost seven times higher than the other, paid its operatives only 9.86 cents per hour, as against 13.09 cents paid by its more successful competitor.
These examples could be repeated for every department of woolen and worsted mills, but will suffice to illustrate the point that higher wages do not necessarily mean higher costs. They show that mill efficiency depends more on a liberal use of the most improved machinery than on low wages. Thoughtful planning in arranging the machinery to save unnecessary steps to the employees, careful buying of raw materials, the efficient organization and utilization of the labor force in the mill, systematic watching of the thousands of details, each affecting the cost of manufacture, will reduce costs to an astonishing degree. When the board, therefore, states that the labor cost of production in this country is on the average, about double that in foreign countries, we must bear in mind the difference in costs in our own country, and the causes to which high costs are due. The fact is that the woolen industry, being one of the best, if not the best, protected industry in the country, shows an exceptional disposition to cling to old methods and to use machinery which long ago should have been consigned to the scrap-heap. That is where the chief cause of the comparatively high cost of production in a large part of the industry is to be looked for.
But, disregarding the question of efficiency, let us accept the figure of the Tariff Board, which found the labor cost in England to be one half that here, taking the manufacture from the time the wool enters the mill until it is turned out as finished cloth. The entire labor cost varies from twenty to fifty per cent. of the total cost of making cloth, according to the character of the cloth, and but seldom exceeds or approaches fifty per cent. If the protective duty is to measure the difference in labor cost, it should be fixed at not above twenty-five per cent. of the cost, that being the highest difference between the American and English labor cost. As against that, we now have a duty of about fifty-five per cent. of the selling price of the foreign cloth, in addition to the concealed protection in the so-called compensatory duty.
For decades we have been assured that all the manufacturer wanted was a duty high enough to compensate him for the higher wages paid in this country. In 1908 the Republican party laid down the formula that the tariff is to measure the difference in the cost of production at home and abroad, including a “reasonable profit to the manufacturer.” To-day the party has advocates of all kinds of protection, from those who wish the tariff to measure the difference in labor cost of the most efficient mills in this and foreign countries, as advocated by Senator LaFollette, to those who wish a tariff high enough to keep out foreign importations.
Whatever may be done with Schedule K by the Democratic Congress, it is time that we dismiss the hoary legend that the duties are maintained solely in the interest of the highly paid American working-man. The assertion comes with specially poor grace from the woolen and worsted industry, the most highly protected industry in the United States, paying the lowest wages to skilled labor. With the earnings of the great bulk of its employees averaging through the year less than ten dollars a week, while wages are about double that figure in less protected industries; with its workmen compelled to send their wives and children to the mills as an alternative to starvation on the man’s earnings; with the horrors of living conditions of the Lawrence mill-workers still ringing in our ears, it is time that we face the situation squarely and, whatever degree of protection we decide to maintain, that we frankly admit that it is primarily for the benefit of the capital invested in our industries.
Russia, Germany, and France do so frankly, and free-trade England manages to compete with them in the markets of the world, while paying higher wages to its employees. In turn we beat these nations, in their own and in the world’s markets, in the products of the very industries in which we pay the highest wages.