· · ..there are .many Pages
tlgbt Packed With facts.
I certainly recommend
that You buy a copy.
• THE COST OF LIVING.
•
•
•
WAGES
PRICES
PROFITS
The Canadian daily press has recently made a startling new discovery-the word "austerity". With the banning
of U.S. imports, with an accelerated rise in the Canadian price of all durable consumer goods, from tea kettles
and babies' shirts to frigidaires and automobiles, the press noisily and even joyfully re-discovers• this word.
But for the vast majority of Canadians-the millions of wage earners, farmers and small business men, the word
austerity has a long familiar ring.
Austerity is not a new word to Canadian wage earners, the vast majority of whom have never had the means to
provide adequate housing, medical and dental care, education and culture for themselves and their families.
Austerity is not a new word to wage earners, whose real wages (purchasing power) have been declining steadily
since March, 1947, and who even now find it financially impossible to provide their children with sufficient
milk, fruit, vegetables and other foods necessary to health.
WHY MUST THE GREAT MAJORITY OF CANADIAN FAMILIES LIVE AT AN AUSTERITY LEVEL?
This pamphlet deals with some of the answers to this question. It analyzes our official cost of living indexand finds it phoney. It discusses wages, profits and prices. In short, it deals in simple and direct fashion with
all the questions workers are asking in these days of the dwindling dollar.
Here, then, are some of the answers-and some of the weapon-facts in our struggle for a decent standard of
living.
IF CANADA IS TO BECOME SOMETHING MORE THAN A SECOND-CLASS NATION, IF WE ARE TO
LIVE UP TO THE FULL MEANING OF DEMOCRACY, THEN CANADIANS MUST BE ASSURED A
CONSTANTLY IMPROVED STANDARD OF LIVING.
1
EVERYWHERE TODAY, CANADIANS ARE TALKING ABOUT THE "COST OF LIVING"
-in collective bargaining, labour's spokesmen raise this issue.
-in government offices it becomes a key factor in policy making.
AND MOST IMPORTANTIt is a constantly nagging worry to housewives who must daily juggle with incomes too low to meet a rapidly
rising cost of living.
..
WHAT IS THE DOMINION BUREAU OF STATISTICS COST OF LIVING INDEX?
Background-A government study of the expenditures of 1439 "typical" Canadian families dw-ing 1938.
Purpose-To measure the increase in the cost of living over a given period (from month to month).
Method-By pricing the items in the budgets of these "typical" Canadian families.
BY DECEMBER 1, 1947 THE COST OF LIVING INDEX WAS UP
467o
OVER THE AVERAGE FOR
THE YEARS 1935 - 1939.
Thus (according to the Dominion Bureau of Statistics), a family spending $100.00 in 1935-39 would
today buy exactly the same goods and services for $146.00.
So that:YOUR 1935-1939 DOLLAR WAS WORTH ONLY 681f2c ON DECEMBER 1, 1947.
46 7o is the OFFICIAL INCREASE in the cost of living
index -
BUT
FEW
WORKERS
BELIEVE
THAT
THE COST OF LIVING HAS ONLY RISEN BY THAT
AMOUNT
DO YOU?
NOTE
ON
GRAPH
ACROSS
PAGE
Increase so far this year of 19 points almost equals total wartime increase of
19.5 points.
Sharp 1947 increase is result of price decontrols and new sales taxes, etc. not yet fully reflected in the cost of living index.
2
COST OF LIVING= 1939 ·1947
1935 -39
145
THIS YE
40
100
R (SOFAR)
41
42
43
3
'47
"IS THE OFFICIAL COST OF LIVING INDEX PHONEY?"
Let's see if we can find outQUESTION: "Are there any other cost of living indexes?"
ANSWER: "Yes, several-but none recognized by the government (or the bosses)"
Let's examine a few-
1. THE TORONTO WELFARE COUNCIL BUDGET
This organization uses the same technique as the D.B.S. but instead of publishing an index showing the
percentage change, they publish the budget itself. The Toronto Welfare Council Budget, to use its own
language, is a minimum budget on which a family of 5 can maintain health and self-respect.
THIS BUDGET IS SHOWN ACROSS THE PAGE •
Thus: A family of 5 spending $28.35 per week in 1939 had to spend $40.11 in May, 1947 for the same goods and
services-an increase in living costs of 41~ ){ . As of May, 1947, the Toronto Welfare Council cost of living
increase was 6.3 % MORE than that of the official government index.
2. THE U.S. BUREAU OF LABOR STATISTICS BUDGETS
Canadian labor is constantly being slapped down
by government and employers for using U.S.
data. But why shouldn't Canadian workers
enjoy as high a standard of living as U.S.
workers? The next time the boss or the government points out how much more the cost
of living has risen in the U.S. than in Canada,
you can tell them:
The Canadian Index is rapidly overtaking the U.S. Index.
ttl'
The U.S. Index is more accurate. The
U.S. has a Bureau of Standards which
measures changes in quality. Canada
has no such bureau. (Why not?)
SEE CHART OPPOSITE. SHOULD CANADIAN STANDARDS BE SO MUCH LOWER?
3.
OTHER CANADIAN COST OF LIVING STUDIES
Some leading Canadian Unions have also made studies of living costs. The TRADE UNION RESEARCH
BUREAU has also made a thorough study of the Index.
THESE STUDIES ALL SHOW AN INCREASE OF FROM 15 TO 20 POINTS OVER THE OFFICIAL INDEX.
(More later on Trade Union Research Bureau Study)
4
Toronto WeHare Council Minimmn Monthly Budget
•)
I
MAN, WOMAN, BOY 6, GIRL 10, BOY 12
I
NOTE:-The Toronto Welfare Council states that1939
Item
Rent
$ 25.00
$ 33.00
Food
34.40
62.31
19.18
28.28
22.00
23.05
Advancement and
Recreation
6.00
11.50
Medical and Dental-
7.45
9.00
Savings and Insurance 7.91
5.34
TOTAL
Pm MoNTH $121.94
$172.48
TOTAL
PER WED:
-
Clothing
Operation
..
May 1947
28.35
40.11•
'i'he food would have to be planned, purchased
and cooked with the greatest care, since the money
allowed requires expert management on the part of
the housewife. The amount set aside for advancement and recreation is meagre and includes no alcoholic beverages or tobacco. No telephone and only
the bare necessities will be covered by the figure
for replacements and new articles in the operation
of the home. No provision for maintenance in old
age and savings are small when it is considered that
they would have to meet all current emergencies
as well as dental care."
THIS MINIMUM BUDGET REQUIRES $40.11
WEEKLY - $2,085 PER YEAR.
•change in the D.B.S..Cost of Living Index makes this $44.00 at December 1.
HOW MUCH DOES IT COST A U.S. FAMILY OF 4 TO LIVE?
(Seattle, Washington)
EMERGENCY LEVEL
MAINTENANCE LEVEL
$1444 per year
$2140 per year
AMERICAN LEVEL
$3114 per year
NOTE:-The U.S. Bureau of Labour Statistics says:Emergency Level--"allows for material wants but it might be questioned on the
ground of health hazards ..."
Maintenance Level--"a comfortable but inexpensive standard . . . lacks savings for
future education of children, no auto, no 'phone . . . provides no
future .. ,"
American Level
-"minimum of health care . . . some opportunity higher education
... some assurance of a future."
THUS:
In May, 1947, Average weekly manufacturing wage Canada-$33.83.
In May, 1947, Average weekly manufacturing wage U.S.A.-$48.44
CANADIAN WAGE-$6.28 BELOW SUBSISTENCE BUDGET (T.W.C.)
U.S.A. WAGE-$7.29 ABOVE MAINTENANCE BUDGET (B.L.S.)
5
I
,,)
·I
WELL THEN, HOW PHONEY IS THE COST OF LIVING INDEX?
Workers, who measure the cost of living by the drain on their pocket books, describe the official index as
"phoney", "cooked" or "fake".
The Government, on the other hand, claims that the index is compiled by experts, who are not influenced by any
pressure or bias. The index is not "cooked", says Ottawa. Correct. ·But the fact that it is not deliberately
cooked does not necessarily make it reliable or accurate.
FAULTS lN THE OmCIAL COST OF LIVING INDEX
1. FOOD
A. The Dominion Bureau of Statistics "average" family in 1938 had an income of $1,453, of which it spent
$443, or 31.3 %, on food.
But over two-thirds of Canadian workers earned less than $1,000 in 1938. In the same proportion, the cost of
living index allowed them 31.3%, or $313 for food.
Now while $443 probably bought enough food for the
$1,453 family, $313 ( $26.00 a month) certainly did not buy enough for the $1,000 family. Their expenditure
on food would undoubtedly have been more like 40%.
Since food prices have risen most, the higher the proportion of the family's income spent on food, the more the
cost of living has risen. Therefore, as shown on the opposite page, the cost of living increase has been greatef'
for poorer families to whom food is the biggest item.
B. The official food index is based on "normal" prices. But in 1939 housewives could balance their budgets by
.
shopping for "loss leaders" and specials sold below the regular price. Today the stores no longer have to resort
to loss-leaders and specials to attract business. Hence the increased food prices shown in the index do not take
account of the disappearance of their former bargains.
C. The case of fish is a good example of the way subsidies and price-ceilings were manipulated to distort the
index. Last summer, canned salmon was the only fish in common use that was still under a price ceiling, and
canned salmon was 96% of the fish included in the cost of living index. Therefore, as long as canned salmon
was controlled, the price of other fish could go up as high as you please without affecting the cost of living
index. This same thing was true of many other supposedly representative items in the index. For example, all
fresh vegetables are represented in the index by beans, potatoes and onions alone.
6
WHY COST OF LIVING INCREASE IS HIGHER FOR POORER FAMILIES
How $1,000 Income
Would be Spent
In 1939 According
To D.B.S. Index
(1)
ITEM
Price Increase
According to
D.B.S. Index Up
To Nov. 1, 1947
(2)
Cost of the Same
Bud~;ct in 1947
According to Ute
D.B.S. Index
Per Yr.
Per. Mo.
(4)
(3)
How Is Your
Income Spent?
(5)
Food -- ---- --------------------------------- $313.00
73.6 % or $230.37
$543.37
$45.28
Clothing ----------------------------------- 117.00
57.0% or $ 66.69
183.69
15.31
Rent ----------------------------------- 191.00
19.9% or $ 38.01
229.01
19.08
·----------------- ------ ------- ·--------------
Fuel & Light -----·-----------
64.00
22.6 % or $ 14.46
78.46
6.54
------------------
Home Furnishings & Services ______
89.00
51.4% or$ 45.75
134.75
11.23
---------·
226.00
18.2% or $ 41.13
267.13
22.26
----------------------
$1,000.00
$436.41
$1,436.41
$119.70
---- ~-------------
Miscellaneous
Note: In 1946 the average
° Canadian income tax payer was in the $1,200-$1,300 bracket.
Hence the third
column above is a fair representation of how much the D.B.S. Index allots for each item for a typical wageearner's budget.
0
i.e. mode, or largest concentration of income tax payers.
THESE FIGURES SHOW AN INCREASE OF 43.6% IN THE COST OF LNING AS
AT NOVEMBER 1st, 1947. (Column 3 as compared to Column 1)
Now suppose that the $1,000 a year family spent $400.00.on food in 1939 and only $139.00 on miscellaneous
items as would be more likely. The figures would be as follows:
~
Food ----------------------------------------------------------------------- $400.00
73.6%
Increase
or $294.40
1947
$694.40
Clothing ------------------------------------------------------------- 117.00
57.0%
or $ 66.69
183.69
Rent ----------------------------------------------------------------------------- 191.00
19.9%
or $ 38.01
229.01
Fuel & Light ----------------------------------;------- --------
64.00
22.6 %
or $ 14.46
78.48
Home Furnishings & Services -------------------------------------
89.00
51.4 %
or $ 45.75
134.75
139.00
18.2%
or $ 25.29
164.29
$484.60
$1,484.60
Miscellaneous
$1,000.00
In this case the increase would be 48.5 % . This proves that if the proportion of a family's budget spent on
food is higher, then the same price increase would raise their cost of living more than shown at the top of the
page.
r----------------------------------------------------------------,
• THUS FOR THE MAJORITY OF CANADIAN FAMILIES THE OFFICIAL INDEX
UNDERESTIMATES THE ACTUAL COST OF LIVING INCREASE.
7
..
2. SHELTER
cost of livin index assumes th all eo
rent their homes. Actually, at the time of the 1941 census, less
than two-thirds of the people rented. And today, for example, in the case of veterans trying to establish homes,
usually for the first time, it is practically impossible to find a place to rent.
The Trade Union Research Bureau survey shows that the cost of buying a home has risen 173% over 1939.
Also, for those who owned homes before the war and still live in them, upkeep has increased. For example, in
Vancouver, where 50% of the.people own their own homes, taxes have risen over 30% and building materials
for repairs have risen in some cases (e.g. shingles) by over 200%.
On the other hand, the official index claims that up to December 1, 1947, rents have risen 20%.
THE COST OF LIVING INDEX INCLUDES THE 20% RIS~ IN RENTS BUT
IT IGNORES THE 173% INCREASE IN THE COST OF BUYING A HOME.
•
'
3. CLOTHING AND HOME FURNISHINGS
We all know that price increases are not the only things that raise the cost of living. For example, if a mother
who bought a certain brand of child's shoe for $3.50 before the war, which is now unobtainable, is therefore
forced now to pay $6.50 for a supposedly better brand-then this is an increase in the cost of living. Similarly,
if a worker pays 25% more for overalls, and at the same time the wearing quality is down by 20%-the total
price increase is 50%, not 25%.
QUESTION: "How does the government measure quality deterioration?"
ANSWER: "The government asks the merchant (and the consumer prays the merchant is honest!)."
THEN WHY DOESN'T THE D.B.S. HAVE A BUREAU OF STANDARDS BY WHICH TO
MEASURE QUALITY CHANGES AS IN THE U.S.A.?
4. FUEL
The cost of living index includes:
Coal-whose price is up 50 7o since 1939.
Gas-whose price is up 17 7o since 1939.
Electricity whose price is up 0 since 1939.
It leaves out:
Sawdust, which is up 92 %.
Wood, which is up 50-92%.
Fuel oil, which is up 82~%.
(Price changes are for Vancouver)
SINCE SAWDUST, WOOD AND FUEL OIL HAVE RISEN IN PRICE A GREAT DEAL MORE THAN
THE FUELS WHICH ARE INCLUDED, THE FUEL INDEX DOES NOT SHOW THE TRUE
AVERAGE INCREASE.
8
WANNA 13Uy A HOUSE
,,
?
,
•
•
OR A SU\1?
/ /
/
/
EAR .M.:qN'S
CLOTH~NG
INCREASE= 57% ~ quAUTY DETERIORATION
4414 quality deterioration tUe4 -e show on the C. of L. Index!
9
HOW WELL DO CANADIAN WORKERS LIVE?
The table opposite shows that the real wages of Canadian workers fall short even of the minimum subsistence
budget of the Toronto Welfare Council. (SeeP. 5 for proof of minimum nature of T.W.C. Budget.)
WAGES ARE LESS THAN SUBSISTENCE
In 1939 the minimum subsistence budget for an average family of 5 cost $28.35 per week. In that same year
the average wage and salary in manufacturing was only $21.56-$6.79 SHORT of the minimum.
By 1944 the average wage and salary had risen to $32.59 per week. But the cost of the minimum budget had
also gone up-to $35.85 a week. So in spite of wage gains the average worker was still getting $3.26 a week
LESS than the minimum budget.
AND BY MAY, 1947The minimum budget required $40.11 per week, while the average wage had risen to only $36.27 per week
-$3.84 a week LESS than minimum budget requirements.
DOES THE TABLE ON PAGE 11 ALSO APPLY TO FAMILIES OF FIVE?
YES! Department of National Revenue Statistics for 1946 show:
OF 145,524 TAXPAYERS WITH FAMILIES OF FNE, 75,700 or 53.1% EARNED LESS THAN
$38.50 PER WEEK.
NOTE: This only includes tax-payers. The inclusion of families too poor to pay taxes will greatly
reduce the figure for average weekly earnings of families of five.
REAL WAGES (PURCHASING POWER) INCREASED DURING THE WAR YEARS
Purchasing power (obtained by dividing money wages (col. 1) by the cost of living index) increased during
the war years. Up to 1945, purchasing power increased from $21.56 to $27.45-an increase of $5.89 per week.
TODAY, HOWEVER, the purchasing power of the average Canadian worker is 51c per week LESS than it was
in 1945. Since March of 1947 the purchasing power of Canadian workers has been steadily falling. In October,
1947, the purchasing power of the average Canadian wage and salary earner was $1.05 less than it was in March,
1947.
AND, PURCHASING POWER
IS
STILL
FALLING!
Further price decontrol and new taxes on durable consumer goods have not yet been fully felt by the working
people of Canada.
10
•
.
THE WORKER OPERATES AT A LOSS EVERY YEAR
'
The Worker's
Income
His Com
Average Weekly
Wages & Salaries
Manufacturing
Toronto Welfare
Council Minimum
Budget
$28.35
Worker's Income
Falls Short of
Minimum
Budget by:
Real Wages
( Purchasing
Power)
H.is wages would
buy as much as
a 1939 wage of:
$6.79
1939
$21.56
1940
23.23
22.16
1941
25.31
22.84
1942
29.14
25.09
1943
31.43
26.75
1944
32.59
1945
32.56
27.45
1946
32.38
26.41
1947 Jan.
32.40
25.77
Feb.
35.29
27.87
March
35.80
27.99
April
35.95
27.76
May
36.27
June
36.64
27.38
July
36.47
27.04
Aug.
36.98
27.29
Sept.
37.15
26.86
Oct.
38.02
35.85
40.11
42.85
NOTE: The above figures are for wages AND SALARIES.
3.26
3.84
4.83
$21.56
27.62
27.47
26.94
For wage-earners only the difference
between income and cost of living is greater. Thus average weekly wages at Sept. 1, 1947, were
$34.77, and $33.83 at May 1st, or $6.28 less than the minimum subsistence budget. The average of
wages and salaries is used above, because separate figures for wage-earners are not available for
the years prior to 1944.
Sources:
Real Wages-obtained by dividing the actual wage by the cost of living index.
Wages and
Salarie~anada
Yearbook; Monthly Review of Business Statistics, D.B.S.
11
Page 10 shows that during the war years, when price controls were in effect wage earners were able to make
modest wage gains which kept them a little ahead of the cost of living increase.
BUT SINCE THE END OF THE WAR WITH PRICE CONTROLS DISCONTINUED THE COST OF
LIVING HAS RISEN FASTER THAN WAGES-AND WORKERS ARE BEING RAPIDLY DEP.RIVED
OF THEIR WARTIME WAGE GAINS.
..
BLAME IT ON THE WORKERS
Employers tell us that wage increases are futile because (they contend), they are always
followed by price increases which cancel out wage increases.
This contention is based on the downright false theory that wage increases CAUSE price
increases.
-BUT THE FACTS BELIE THE THEORY:
A glance at the opposite page will show that this theory is not in accord with the facts. For example:
THE ELECTRIC POWER INDUSTRY: (B.C.)
Between 1939 and 1944 the wage cost of electricity per unit fell by 16.1% . If the "blame it on the
workers" theory were true the price of electricity should also have come down by 16.1 % . Actually
it fell by only 8.8 % .
THE SHINGLE INDUSTRY (B.C.)
In this industry, on the other hand, wage costs went up between 1939 and 1947.
In 1947 the wages paid in producing a square of shingles, (including production of the timber
from which the shingles are cut) was 96c higher than in 1939.
During that same period of time the wholesale price of a square of shingles went up by $5.70.
WAS THIS WAGE COST INCREASE OF 96c PER SQUARE
RESPONSIBLE FOR A PRICE INCREASE OF $5.70 PER SQUARE?
On the other hand, it is equally easy to see that the action of shingle manufacturers in raising
the price of shingles by six times the amount of the wage increase, raises the <;ost of living for all
workers and helps to make necessary a further all around increase in wages.
12
B.C. AND YUKON ELECTRICAL INDUSTRY
OUTPUT
WAGE COST PER
UNIT
1939 .------------------------------ $3,240,301
1.998,652,000
$1621 per mill. kwh $28,500 per mill. kwh
1944
2,630,409,000
WAGES
3,579,861
Decrease
PRICE
1361
26,000
16.1 %
8.8%
B.C. SHINGLE INDUSTRY
Increase in Price of Shingles per Squar~1939-1947 -------------------------------------------------------------------------- $5.70
( 1939--$2.30; 1947-$8.00)
Increase in Shingle Industry Wages per Square ----------------------------------------------------------------------------------
.52
Increase in Wages Paid in Productio~ of Cedar Logs per square of shingles ---------------------------
.44
Thus OF $5.70 PER SQUARE EXTRA PAID BY CONSUMER THE WORKERS RECEIVED ---------------
.96
SOURCES: Electrical Industry: Annual reports on CENTRAL ELECTRIC STATIONS IN CANADA, D.B.S.
Shingle Industry: Prices obtained from the trade. These may be verified by consulting newspaper
classified sections, (retail price) or D.B.S. Prices and Price Indexes (Wholesale Price).
Wages of sawyers and packers, respectively, were:in 1939 28c per square and 16c per square
in 1947 33c per square and 22c per square
}
~oo. per square
plus $2.20 per day each, equal to 15c per square
As sawyers and packers wages are baH the total wage bill of shingle mills, this makes the
increase per square 52 cents.
13
THE HIGH COST OF HOUSING
The cost of housing today has put even small houses beyond the reach of ordinary people.
On the opposite page is shown the result of a survey conducted by the Trade Union Research Bureau in
November 1946.
THE SUMMARY SHOWS THAT THE PRICE OF VANCOUVER HOUSES IN 1946 WAS 173% HIGHER
THAN IN 1939.
Although this survey was based on a large number of houses, covering a wide cross-section of representative
districts, certain factors make it impossible to make a 100% accurate estimate of the increase in the cost of
housing. However our figure is well in line with common knowledge that the cost of housing has more than
doubled.
HIGHER COSTS DO NOT EXPLAIN THE HIGH PRICE OF HOUSING
In the following several pages wherein we analyze the costs of lumber, building materials and building trades
wages, it will be seen that none of these have gone up enough to explain the steep rise in the price of housing.
The explanation is to be found in the acute shortage of housing plus the fact that there has been no control
whatsoever of housing prices.
SPECULATORS, REi\L ESTATE OPERATORS, AND CONTRACTORS (NOT ALL, BUT TOO MANY)
HAVE TAKEN ADVANTAGE OF THE SITUATION TO MAKE EXORBITANT PROFITS.
VETERANS, 'PROGRESS
1939
1947- 1948
1940-1945
14
COMPARISON-COST OF HOMES 1939-1946
VANCOUVER, B.C.
SUMMARY-ALL HOMES•
Average Prices
1946
Increase
Six Rooms --------------------------------------------------- ----------------------- $2,539
$6,274
146.7%
Five Rooms ---------------------------- 2,291
6,893
200.8%
Four Rooms ----------------------------------------------------- ---------- 1,980
5,396
172.5%
TOTAL -------------------------------- ________________________ -------·----------- $2,270
$6,188
$3,918 or 173.0%
1939
• This ~ummary is based on a survey of several hundred four, five and six room homes in eight different districts.
Changed prices were based on Newspaper ads appearing in Vancouver in August, 1939, and November, 1946.
'·
TO DETERMINE INCREASED COST OF HOUSING IN YOUR TOWN OR CITY
If you wish to perform a similar study in your own district, take the following steps:
1. Decide upon period you wish compared, e.g. August, 1939, with August, 1947.
2. Divide city into accepted residential districts.
3. Get sufficient newspaper want ad prices or real estate figures on houses for sale, to enable you to compare
representative number of houses in each of the years. ( 4 room houses should be compared with 4 room
houses, new houses with new houses, residential area with residential area.) If this procedure is carefully
adhered to, it should be possible to get a close idea of increased house prices by surveying about 100 homes
for every 100,000 of population.
15
ONE REASON WHY YOUR HOUSE COSTS MORE
LUMBER
Wages in the lumber industry are now at the highest point they have ever reached. At that, a B.C. sawmill
worker gets only $41.12 a week. And the men who live the unpleasant and hazardous life of the logging camp,
~
average only $50.51.
"FREE ENTERPRISE PRICES"
The opposite page shows what a small factor wages are in the rising price of lumber, for while hourly wages
have increased by 72.5% (weekly wages much less) the average price of lumber has increased by 169.3% and
on the main product, Douglas Fir, 328.2% in the export market.
The final column shows the real reason for high prices: high profits. The H. R. MacMillan Export Company,
which has an invested capital of approximately $10,000,000, is now making profit at the rate of $7,000.000 a year
after taxes, or 70 cents on the dollar. This is an increase of 612% over pre-war profits.
THE COST OF A WAGE INCREASE
In 1946, the wages of lumber and logging employees were raised by 17% . The opposite page shows, that
because of increased productivity, this wage increase cost the logging operators only 24 cents per thousand feet
of logs, or about 2.4% of their 1945 wage cost.
But remember what the employers tell us-high wages ptean high prices. So to compensate themselves
for the extra 24 cents paid out in wages, they raised the price of logs, during the same period of time, by $3.00 to
$4.00 per thousand feet.
16
LUMBER
PRICES
Wholesale
Price
Index
Export
Price
Douglas
Fir
WAGES
PROFITS
Logging
Wage
Index
Net Profit of
H. R. MacMillan
Export Company
per year
94.0
$18.42
100.0
1945 ...... --------------------------------------- --------- --- 154.5
38.40
153.3
1,520,285
1946 ---- - ...... - ------- -------- ------------------ - 169.1
50.78
168.2
2,310,362
1947 (Oct.) --------------------- --------------------- 253.2
78.89
172.9 (est.)
7,128,294
72.9%
612%
1939
PERCENT INCREASE -------------------------- 169.3%
0
328.2%
$1,000,000 (est. ) •
Estimated. Actual figures fo:- other years are: 1940-$1,095,925; 1941-$1,160,643; 1942-$1,237,534; 1943
-$1,006,002; 1944-$1,537,585.
LOGS
1945
Logs Scaled --------------------------·------------- 2,926,000,000 fbm
Payroll ---------------------------------------- _________
Increase
1946
$28,938,195
2,965,000,000 fbm
30'000,000
Labor Cost per thousand feet board measure .... $ 9.88
$10.12
24 cents or
2.4%
Price Douglas Fir ..... -------------------------------------------- 24.11
27.09
$2.98 or
12.3%
Cedar _____________________________________________________ .._______ 25.73
29.91
$4.18 or
16.3%
Sources: Dominion Bureau of Statistics:
Prices and Price Indexes
Trade of Canada, 1946
Dept. of Labor, Ottawa:
Wage Rates and Hours of Labor in Canada, and Labour Gazette. The 1947 logging wage index
was estimated from the increase in average hourly earnings, as reported in Average Hourly Earnings and Average Hours of Work (Dominion Bureau of Statistics).
B.C. Provincial Government:
'
Annual Report of the Forest Branch
Workmen's Compensation Board. The 1946 logging payroll figure of $30,000,000 is a preliminary
estimate by the board. The 1945 figure is the actual total payroll as audited by the board.
17
THE Buu.DING MATERIALS MANUFACTURER TAKES HIS CUT
The price of building materials other than lumber rose by 49.2% between 1939 and 1946.
A cost increase of 49.2% in building materials is not of much help in explaining how the price of houses went
up 173%.
But the record shows that this increase contains a large element of profiteering, and was unnecessary to that
extent.
FOR, (REMEMBERING THAT WAGES ROSE LESS THAN PRICES), THE PROFITS OF
17 BUILDING MATERIALS MANUFACTURERS LISTED BY THE FINANCIAL POST IN
1946, WERE 161% HIGHER THAN IN 1939.
AND LIKEWISE THE CONTRACTOR
BUCK-PASSING is a favorite sport of profiteers generally. Every time they up their prices they tell ·public
"It's the fault of the workers-we gave them a nickel increase last month."
The attempt is made to blame the high cost of housing upon the "unreasonable" wage demands of carpenters,
bricklayers, painters, and other building trades.
BUT, when we break down the figures for the construction industry we see the same picture as in lumber and
building materials-LOW WAGES, HIGH PROFITS, INFLATIONARY PRICES.
Can we explain a 173% increase in the price of housing up to the end of 1946 on the basis of wage increa.ses
during that same period running from 23% for plasterers to 38.8% in the case of carpenters? Is $1.25 per hour
a high wage for a man who earned 90 cents in 1939? The answer is, of course, that these are not high wages
under present cost of living conditions.
COMPARE these wage increases of building tradesmen with the profits of their employers, as shown on the
opposite page. Unincorporated Building Contractors made a profit of $47,000,000 in 1939. In 1946, with virtually
the same number of wage earners in the building construction industry they made a profit of $103,000,000, an
increase of 119%.
And 667 Building Construction Companies for whom both 1936-1939 and 1945 profits were available QUADRUPLED their profits between those periods!
WHO IS BEING UNREASONABLE?-THE WORKER OR THE EMPLOYER?
Note: Building tradesmen received moderate wage increases in 1947. But 1946 is the latest year for which
profit and price figures are available. Thus all comparisons are fairly based.
18
-and Here
•
IS
the Evidence
BUILDING MATERIALS
0
Building Materials•
Price Index
Wages Index
Manufacturing
Industries••
1926=100
1939=100
Profits
Construction
Materials
Manufacturers•••
1939
89.7
1946
133.9
143.1
17,339,000
Percent Increase -----·----- ---·--------·---------
49.2%
43.1%
161.0%
100
$ 6,632,000
Dominion Bureau of Statistics Wholesale Price Index.
00
Dept. of Labour, Wage Rates and Hours of Labour in Canada, and Laboor Gazette.
No separate wage index is compiled for building materials manufacturers, but even if it were greatly out of
line with manufacturing as a whole, it would not anywhere near approach the increase in profits.
0 0 0
As listed in Financial Post Survey of Corporate Securities, 1946.
THE BUILDING TRADES
Wage Rates Per Hour-Vancouver
Carpenters
Painters Plasterers Bricklayers
0
0 0
Aggregate Profits••
Unincorporated
Building Contractors
1939 .-------------------------$ .90
$ .80
$1.00
$!.10
$ 47,000,000
1946 ----------------·- 1.25
Percent Increase ______38.8 %
1.10
1.23
1.45
103,000,000
23.0%
31.8%
37.5%
119%
Wage Rates and Hours of Labour in Canada.
D.B.S. National Accounts, Income and Expenditure, 1946.
PROFITS CONSTRUCTION INDUSTRY CORPORATIONS*
For 667 Companies reporting a profit in 1945:
Standard Profit (average profit years 1936-39) ------------·---------------------------------------~-- ---$2.374,000
1945 Profit -------------------------------------------------------------------------------------------$9,688,000
(These figures exclude losses in both cases)
0
Dept. of National Revenue, Taxation Statistics.
19
"If the poor have no bread, let them eat cake."
The lady who said that lost her head on the guillotine.
But that was 160 years ago, and certain people are beginning to say it again.
RECENTLY AS PART OF ITS DECONTROL PROGRAM THE GOVERNMENT ENDED THE SUBSIDY ON FLOUR.
During the war years, with the world price of wheat soaring, the subsidy on wheat was an important part
of Canada's program of protecting the basic standard of living of its people. With the price of bread kept within
reason, the worker could at least afford this staple food, and average per capita consumption of bread went up
from 88.3 pounds in 1939 to 106.6 pounds in 1945.
In spite of the ceiling on prices, bakers made large profits. For example, in 1945, 126 bakery companies
made profits of $7,872,000 and paid excess profit taxes of $3,610,000, which indicates that profits were greatly
incr~ased over pre-war profits. (Source: Dept. of National Revenue, Taxation Statistics.)
FLOUR MILLS ALSO MADE RECORD BREAKING PROFITS-see opposite page.
Yet when the government ended the subsidy and the price ceiling on bread this did not merely raise the
price of bread by the amount of the subsidy. Some bakeries increased their price by over twice the differe~ce
in the cost of flour.
In Vancouver, this resulted in a one pound loaf of bread rising in price from eight cents to eleven centsan increase of three cents a pound loaf. YET THE AMOUNT OF THE SUBSIDY RE,M OVED AMOUNTED
TO ONLY H CENTS PER LOAF.
20
FLOUR MILLS HIT THE JACK-POT
INTERNATIONAL MILLING CO. (ROBIN HOOD FLOUR)
INCREASES
Consolidated Net Profit: 1946--$3,462,740; 1945-$2,845,501
$617,239 or 22%
MAPLE LEAF MILLING COMPANY
Net Profit: 1947-$1,165,026; 1946--$849,734
$315,292 or 37%
LAKE OF THE WOODS MILLING COMPANY
Net Operating Profit: 1946-$1,203,075; 1945-$1,000,670
$202,455 or 20%
OGILVIE FLOUR MILLS COMPANY
Net Profit: 1946--$1,138,362; 1945-$1,111,865
$ 26,497 or 2%
PURITY 'FLOUR MILLS LIMITED
Net Profit: 1946-$460,971; 1945-$173,310
$287,661 or 166%
ST. LAWRENCE FLOUR MILLS CO.
Net Operating Profit: 1946-$388,670; lwH294,554
$ 94,116 or 32%
-AND OWN THE BAKERIES
MAPLE LEAF MILLING CONTROLS!. Cariadian Bakeries-1947 Net Profits: $15:5,377
UP 85% over 1946
2. Canada Bread Co. Ltd.-1946 Net Profit: $287,641
UP
9% over 1945
3. Eastern Bakeries Ltd.-Net Profits not stated.
LAKE OF THE WOODS CONTROLS!. Inter City Baking Co. Ltd. (and five subsidiaries including Brown's Bread Ltd., Standard Bread Co. Ltd.,
A. & L. Strachan Ltd.-1947 Net Profit: $225,579
UP 139% over 1946
PURITY FLOUR MILLS CONTROLS!. General Bakeries Ltd. (and subsidiaries including Brosseau Ltd., Purity Bread Ltd., Bryce Bakeries Ltd.,
Robertson's Bakeries Ltd.)-1947 Net Profits: $121,160 (1st year's operations).
CONTROL NOT KNOWN!. Consolidated Bakeries of Canada (and 12 subsidiaries)
1946 Operating Profit: $962,570
UP 17% over 1945
2. George W eaton Limited (and 17 subsidiaries)
1946 Operating Profit: $1,198,731
UP 41% over 1945
Source: Financial Post. Survey of Corporate Securities 1947 and weekly publication.
21
BRITISH COLUMBIANS ARE TODAY DRINKING A MILLION QUARTS OF MILK PER MONTH
LESS THAN THEY WERE A YEAR AGO.
This is a result of the fact that the price of milk has gone up 5 cents a quart, or 50% in the same period.
Many consumers, while feeling the hardship of paying this extra amount, reason that the farmers are
entitled to the higher income, in view of rising farm costs, and the hardships that farmers have suffered in the
past. We agree ...
BUT THE HARD FACT IS THAT THE FARMERS DID NOT GET THE INCREASE.
FARM INCOME FROM THE SALE OF MILK
Price to
Consumer
Month
Total Fann Income
from Milk, B.C.
Fluid Milk
March
1946____________________________________________________ 10 cents
1,138,000
682,000
June
1946.___________________________________________12
1,321,000
690,000
March
1947------·-- ________ -------------------------------14
1,200,000
749,000
June
1947--------------· ---------·- _________________________14
1,318,000
596,000
Source: Dominion Bureau of Statistics, Monthly Dairy Reyiew.
Thus the 40% increase in the price of milk from March, 1946, to March, 1947, raised the farmers' income
less than 10%. And his income in June, 1947, at 14 cents a quart was actually lower than in June, 1946, at 12
cents a quart.
This happened for two reasons. In the first place the government took most of the increase by removing
subsidies. For example, the increase in October, 1946, raised the price to the consumer by 77.6 cents per 100
pounds ( 38.8 quarts ). But 55 cents of this went to the government and only 6 c;ents to the farmer, the middleman apparently pocketing the difference.
At the same time the higher price of milk forced low income families to buy less. This fact cut Huid milk
sales from 20,195,000 pounds in July, 1946, to 17,368,000 pounds in July, 1947. This left the farmer with a smaller
income in spite of the higher price.
THUS BOTH
FAR~'IERS
AND
CONSU~1ERS
ARE WORSE OFF FOR THE INCREASE IN THE PRICE
OF MILK. BUT THE HEAL VICTIMS ARE THE NATION'S CHILDREN WHO ARE GETTING LESS
MILK.
22
HOW MUCH BREAD
DOES A DOLLAR BUY?
ONE POUND LOAVES
-v--~
HOW MUCH MILK
DOES A DOLLAR BUY?
QUARTS~
CIGARE'li'ES UP 17 ~ 1'o
Until November, 1947, cigarettes cost 33c a paclcage.
Today they cost 35c a package. (Sometimes more).
Since 2Hc is the amount of tax per package
This increase amounts to 2c on
11~
or
17~% .
WAS THIS PRICE INCREASE NECESSARY?
The manufacturers who raised their prices claimed they had to because of increased material and labour costs.
BUT TAKE A LOOK AT THE OPPOSITE PAGE!
( Passing Note )
Since June, 1942, all additional tobacco taxes do NOT show in the Dominion Government's Cost of Living Index.
Seems they want to discourage luxuries like snoose and rollings.
24
BEHIND THE SMOKE SCREEN
NET PROFITS BEFORE TAXES (1)
( 4 Companies)
1939
1940
1941
1942
1943
1944
1945
1946
------------------------------------------------------------------------$ 8,800,000
-----------------·--····--·····-----------------------------$ 9,600,000
----------------·-················--------------·----------------·----------------------$10,200,000
-----------------·-··-···-----------------------------------------------------------------$12,000,000
---------------------------·······---------------------···-----···-···--·-···------------------$11,300,000
-------------------------------------------------------------------------$11,200,000
---------------------·--····--·--··--· ·---------------····------·-·-····--······---------$12,200,000
----------------------------------------------·---------------·-------------------$11,500,000
AN INCREASE SINCE 1939 of $2,700,000 or 30%
THE ABOVE PROFIT FIGURES ARE FOR FOUR COMPANIES
-BUT 1 COMPANY (IMPERIAL TOBACCO) HAS CORNERED 75% OF ALL CANADIAN BUSINESS
IMPERIAL TOBACCO CO. OF CANADA LTD.-PROFITS (2)
( ... . so fully packed! )
Net Profit
Before Tax
After Tax
Dividends
1944 ---------------·-------------------------·· $ 9,501,000
1945 -----------------------------------····- $10,567,000
1946 -----····----------------------- $ 9,677,000
$ 5,749,000
$ 5,782,000
$ 6,265,000
$ 4,262,000
$ 4,262,000
$ 4,262,000
Year
PRODUCTION IS UP!
Production of Cigarettes ( 3)
1939 --------------------------------------·----------------------------------- 7,163,000,000
Per Capita Consumption
1945 -------------------------------------------------------- 17,684,000,000
630
1209
WAGES ARE- WELL
1945-Males-Average Weekly Wages -------------------------------------·--·-····-·-$25.68 ( 4)
1945-Females-Average Weekly Wages -----·-·-··------------------------·······-·····$19.01
1947 (Oct. )-All Workers-Average Weekly Wages ---------·---------------$28.37
•
IN 1945 THE TOBACCO INDUSTRY MADE A NET PROFIT ON EVERY EMPLOYEE
(WAGE and SALARY EARNER) OF $1150
Sources:
( 1)
( 2)
( 3)
( 4)
Bank of Canada-Statistical Summary Oct.-Nov. 1947.
Financial Post Survey of Corporate Securities 1947.
Statistical Handbook of Canadian Tobacco D.B.S. 1947.
As ( 3) and Hours and Earnings, D.B.S. October 1947 (All Canada).
25
HOW IS CANADA'S NATIONAL INCOME DIVIDED?
National Income is defined as the total earnings of all residents of the country. It is the sum
of wages and other labour income, investment income, corporation profits and net income of
farmers and unincorporated businesses.
The extent of profiteering in Canada during the past decade is startlingly shown by the publication, National
Accounts Income and Expenditure, 1938-46, issued by the Dominion Bureau of Statistics. This publication
analyzes the National Income of Canada, showing who received it and how it was used.
An increase of 138% is shown in the Net National Income which was $3,972,000,000 in 1938 and $9,464,000,000 in 1946. This is partly due to an increase in production, and partly to an increase in prices.
AGGREGATE INCREASE 1938-1946
Labour Income _______________ ---------- .------------------------------------------------------------------1(11%
Investment Income -········--- -------------------------------------- 80%
Agriculture and other unincorporated businesses -----------------------------169%
CORPORATE BUSINESS ----·····--····-------------------------------------------------302%
However, the 'figure above gives a highly exaggerated impression of the increase in labour income. For while
it is true that ALL employed workers received 107% more money in 1946 than in 1938, there were 55%
more people employed. ( 1 ) Therefore the larger payroll was divided among a larger number of persons and each
one received
only 33.5% more money income than in 1938. It is safe to say that the whole of this 33.5 %
canceUed out by higher cost of living and taxes.
In the case of the non-labour groups the numbers are relatively the same or less than in 1938.
•
THE INCREASE IN PER CAPITA LABOR INCOME BETWEEN 1938 AND 1946 IS 33"% .
FOR CORPORATIONS IT IS 302%.
( 1) Source: D.D.S. Employment Index.
26
wtU
PROFITS OF BUSINESS
Unincorporated
Corporations•
Business
( except farmers)
Salaries, Wages
& Supplementary
Labor Income
1938 ---------------------------------------------- $2,476,000,000
$429,000,000
$292,000,000
1939 --------------------------------------
2,565,000,000
440,000,000
421,000,000
1940 -------------------------------------------
2,922,000,000
493,000,000
614,000,000
1941 ---------------------------------------------
3,555,000,000
575,000,000
935,000,000
1942 --------------- ---------------------------- - 4,219,000,000
607,000,000
1,126,000,000
1943 ---------------------------------------------- 4,703,000,000
636,000,000
1,126,000,000
1944 ------------------------------------------
4,869,000,000
691,000,000
1,068,000,000
1945 -----------------------------------------------
4,859,000,000
771,000,000
1,102,000,000
1946 ---------------------------------------------
5,113,000,000
907,000,000
1,174,000,000
111.4%
Increase 1938-1946 --------------------------------------107%
0
302%
Excluding dividends paid to non-residents.
Source: Dominion Bureau of Statistics, National Accounts, Income and Expenditure, 1938-1946.
PROFITS OF UNINCORPORATED BUSINESS
INDUSTRY
1938 Net Income
or Profit
Agriculture ----------------------------------·---------------------$371,000,000
1946 Net Income
or Profit
Percent
Increase
$1,244,000,000
235
Forestry and Mining _____ -----·- ___ ___ __________
14,000,000
20,000,000
43
Fishing, Hunting and Trapping -----------------
10,000,000
69,000,000
590
Manufacturing ------------------------------------------------- 59,000,000
90,000,000
53
Construction --------------------- --------------------------------
44,000,000
103,000,000
134
Transportation, Communication, Storage ____
17,000,oo0
36,000,000
112
Wholesale Trade --------------------------------------------
19,000,000
45,000,000
137
Retail Trade ---------------------------------------------- 111,000,000
263,000,000
137
Finance ----------------------------------------------------------
11,000,000
20,000,000
82
Community Service ------------------------------------
61,000,000
113,000,000
85
Recreational Service --------------------------------------
3,000,000
6,000,000
100
Business Service ----------------------------------------------
32,000,000
61,000,000
97
Personal Service ---------------------·----------------------- 48,000,000
81,000,000
68
Total -----------------------·----------------------------$800,000,000
$2,151,000,000
Source: Dominion Bureau of Statistics, National Accounts Income and Expenditure, 1938-1946.
27
169%
-
Canada's $9,500,000,000 national income is sufficient to provide its people with a decent standard of living.
It would be enough to provide about $800 per year for every man, woman and child in the country, or $4,000 for
a family of 5. Unfortunately, it does not provide the majority of us with even the minimum budget compiled by
the Toronto Welfare Council.
The Toronto Welfare Council budget in May, 1947, worked out to $2,085 per year. The great majority of
adult Canadian workers were earning less than this amount and therefore were not able to support a family at
even a minimum subsistence level, as the following facts show:
IN 1946, OF APPROXIMATELY 5,000,000 EMPLOYED PERSONS, ONLY 2,545,809 EARNED ENOUGH
TO PAY INCOME TAX. SINCE THE INCOME TAX EXEMPTIONS WERE $660 FOR SINGLE PEOPLE,
and $1,200 FOR MARRIED PERSONS, THIS MEANS THAT NEARLY 2,500,000 PEOPLE EARNED LESS
THAN THESE AMOUNTS. o
Even among those who did pay income taxes, the majority were below the Toronto Welfare Council minimum:
Of
142,524 taxpayers with families of 5-75,700 or 53.1 %
294,616 taxpayers with families of 4-156,200 or 53.0 %
423,520 taxpayers with families of 3--237,800 or 56.1 %
2,545,809 taxpayers of all classes-1,757,050 or 69.07o
)
t
EARNED
LESS THAN
(
)
$2000
IN OTHEH. WORDS, IN ADDITION TO A:LL THOSE WHO EARNED TOO LITTLE TO
PAY INCOME TAX, NEARLY 70 PERCENT OF THOSE WHO DID PAY TAXES WERE
NOT EAH.NING ENOUGH TO SUPPORT A FAMILY OUT OF THEIR OWN RESOURCES.
"'These and the following figures are from Dept. of National Revenue, Taxation Statistics.
torporation Profits Tripled !
Industry
Number of
Companies
Agriculture, Fishing, Forestry ----·-···-···------ ___________ 345
Mining -------------------------------------------------------------- 315
Manufacturing -------------------------------------------------- _ 6,426
Construction -------------------------------------------------------- 667
Publie Utili ties ---------------------------------------___________ 1,081
Wholesale Trade -------------------------------------------------- 3,091
Retail Trade ---------------------------------------------------------- 3,924
Service ----------------------------------------------------- ______ 2,228
Finance ----------------------------------------------------- 2,817
57
Unclassified ------------------------------------_____________________
TOTAL ---------------------------------------------------------------20,951
Standard Profit
(i.e. 1936-1939
average profit)
$ 1,021,000
15,049,000
203,808,000
2,374,000
37,346,000
31,227,000
41,210,000
11,069,000
25,549,000
115,000
$368,768,000
1945 Profit
$ 4,840,000
82,001,000
627,832,000
9,688,000
148,497,000
91,580,000
118,897,000
31,949,000
82,897,000
513,000
$1,198,694,000°
Percent
Increase
374%
446
208
321
298
194
189
189
225
346
225
Note that in 1945 the average company made over three times its standard profit.
"' The difference between this figure and the figure of $1,102,000,000 shown on the previous page is that the latter
was corrected for losses of companies not included above.
Source: Dept. of National Revenue, TAXATION STATISTICS, Sept., 1947.