· · .. there are .many Pages tlgbt Packed With facts. I certainly recommend that You buy a copy.

• • THE

WAGES

PRICES

PROFITS

COST OF LIVING.

• •

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 index­

and 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 IMPORTANT-It 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.

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COST OF LIVING 1939 ·1947 1935 -39 = 100

145 THIS YE R (SOFAR)

40 41 42 43 '47

3

"IS THE OFFICIAL COST OF LIVING INDEX PHONEY?"

Let's see if we can find out-

QUESTION: "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.

The U.S. Index is more accurate. The U.S. has a Bureau of Standards which

ttl' 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

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Toronto WeHare Council Minimmn Monthly Budget

Item

Rent

Food

MAN, WOMAN, BOY 6, GIRL 10, BOY 12

NOTE:-The Toronto Welfare Council states that-1939 May 1947

$ 25.00 $ 33.00

34.40 62.31

Clothing

Operation

Advancement and

--

19.18

22.00

28.28

23.05

'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."

Recreation 6.00 11.50

9.00

5.34

Medical and Dental- 7.45

Savings and Insurance 7.91

TOTAL Pm MoNTH $121.94 $172.48

40.11• TOTAL PER WED: 28.35 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

$1444 per year

MAINTENANCE LEVEL

$2140 per year

AMERICAN LEVEL

$3114 per year

NOTE:-The U.S. Bureau of Labour Statistics says:-

THUS:

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."

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

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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

ITEM

How $1,000 Income Would be Spent

In 1939 According To D.B.S. Index

(1)

Food -- ---- --------------------------------- $313.00

Clothing ----------------------------------- 117.00

Rent ----------------------------------- 191.00

Fuel & Light -----·----------- 64.00

Home Furnishings & Services ______ 89.00

Miscellaneous 226.00

$1,000.00

Price Increase According to

D.B.S. Index Up To Nov. 1, 1947

(2)

73.6% or $230.37

57.0% or $ 66.69

19.9% or $ 38.01

22.6% or $ 14.46

51.4% or$ 45.75

18.2% or $ 41.13

$436.41

Cost of the Same Bud~;ct in 1947 According to Ute

D.B.S. Index Per Yr. Per. Mo.

(3) (4)

$543.37 $45.28

183.69 15.31

229.01 19.08

78.46 6.54

134.75 11.23

267.13 22.26

$1,436.41 $119.70

How Is Your Income Spent?

(5)

·-------------

----- ------ -----

---·--------------

------------------

---------·

----------------------

----~-------------

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 wage­

earner'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

Clothing ------------------------------------------------------------- 117.00

Rent ----------------------------------------------------------------------------- 191.00

Fuel & Light ----------------------------------;------- -------- 64.00

Home Furnishings & Services ------------------------------------- 89.00

Miscellaneous 139.00

$1,000.00

Increase 73.6% or $294.40

57.0% or $ 66.69

19.9% or $ 38.01

22.6% or $ 14.46

51.4% or $ 45.75

18.2% or $ 25.29

$484.60

1947 $694.40

183.69

229.01

78.48

134.75

164.29

$1,484.60

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

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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, 1947-

The 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

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THE WORKER OPERATES AT A LOSS EVERY YEAR

The Worker's His Com

Worker's Income Real Wages Income Falls Short of ( Purchasing

Minimum Power) Average Weekly Toronto Welfare Budget by: H.is wages would Wages & Salaries Council Minimum buy as much as

Manufacturing Budget a 1939 wage of:

1939 $21.56 $28.35 $6.79 $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 35.85 3.26 27.62

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 40.11 3.84 27.47

June 36.64 27.38

July 36.47 27.04

Aug. 36.98 27.29

Sept. 37.15 26.86

Oct. 38.02 42.85 4.83 26.94

NOTE: The above figures are for wages AND SALARIES. 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

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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

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B.C. AND YUKON ELECTRICAL INDUSTRY

WAGES

1939 . ------------------------------ $3,240,301

OUTPUT

1.998,652,000

WAGE COST PER UNIT PRICE

$1621 per mill. kwh $28,500 per mill. kwh

1944 3,579,861 2,630,409,000 1361 26,000

Decrease 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

plus $2.20 per day each, equal to 15c per square

} ~oo. 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 1940-1945 1947- 1948

14

COMPARISON-COST OF HOMES 1939-1946

VANCOUVER, B.C.

SUMMARY-ALL HOMES•

Average Prices

1939 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%

• 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

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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

1939

Wholesale Price Index

94.0

1945 ...... --------------------------------------- --------- --- 154.5

1946 ---- - ...... - ------- -------- ------------------ - 169.1

1947 (Oct.) --------------------- --------------------- 253.2

PERCENT INCREASE -------------------------- 169.3%

PRICES

Export Price

Douglas Fir

$18.42

38.40

50.78

78.89

328.2%

WAGES

Logging Wage Index

100.0

153.3

168.2

172.9 (est.)

72.9%

PROFITS

Net Profit of H. R. MacMillan Export Company

per year

$1,000,000 (est. ) •

1,520,285

2,310,362

7,128,294

612%

0 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 ---------------------------------------- _________ $28,938,195

Labor Cost per thousand feet board measure .... $ 9.88

Price Douglas Fir ..... -------------------------------------------- 24.11

Cedar _____________________________________________________ .. _______ 25.73

Sources: Dominion Bureau of Statistics:

Prices and Price Indexes

Trade of Canada, 1946

Dept. of Labor, Ottawa:

1946

2,965,000,000 fbm

30' 000,000

$10.12

27.09

29.91

Increase

24 cents or

2.4%

$2.98 or

12.3%

$4.18 or

16.3%

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 Earn­

ings 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 QUAD­

RUPLED 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

1939

1946

• IS the Evidence

BUILDING MATERIALS

Building Materials• Price Index 1926=100

89.7

133.9

Wages Index Manufacturing Industries••

1939=100

100

143.1

Percent Increase -----·----- ---·--------·--------- 49.2% 43.1%

0 Dominion Bureau of Statistics Wholesale Price Index.

Profits Construction

Materials Manufacturers•••

$ 6,632,000

17,339,000

161.0%

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

1939 . -------------------------$ .90 $ .80 $1.00 $!.10

1946 ----------------·- 1.25 1.10 1.23 1.45

Percent Increase ______ 38.8% 37.5% 23.0% 31.8%

0 Wage Rates and Hours of Labour in Canada. 0 0 D.B.S. National Accounts, Income and Expenditure, 1946.

PROFITS CONSTRUCTION INDUSTRY CORPORATIONS*

For 667 Companies reporting a profit in 1945:

Aggregate Profits•• Unincorporated

Building Contractors

$ 47,000,000

103,000,000

119%

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 SUB­

SIDY 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,MOVED AMOUNTED TO ONLY H CENTS PER LOAF.

20

FLOUR MILLS HIT THE JACK-POT

INTERNATIONAL MILLING CO. (ROBIN HOOD FLOUR)

Consolidated Net Profit: 1946--$3,462,740; 1945-$2,845,501

MAPLE LEAF MILLING COMPANY

Net Profit: 1947-$1,165,026; 1946--$849,734

LAKE OF THE WOODS MILLING COMPANY

Net Operating Profit: 1946-$1,203,075; 1945-$1,000,670

OGILVIE FLOUR MILLS COMPANY

Net Profit: 1946--$1,138,362; 1945-$1,111,865

PURITY 'FLOUR MILLS LIMITED

Net Profit: 1946-$460,971; 1945-$173,310

ST. LAWRENCE FLOUR MILLS CO.

Net Operating Profit: 1946-$388,670; lwH294,554

-AND OWN THE BAKERIES

MAPLE LEAF MILLING CONTROLS-

!. Cariadian Bakeries-1947 Net Profits: $15:5,377

2. Canada Bread Co. Ltd.-1946 Net Profit: $287,641

3. Eastern Bakeries Ltd.-Net Profits not stated.

LAKE OF THE WOODS CONTROLS-

INCREASES

$617,239 or 22%

$315,292 or 37%

$202,455 or 20%

$ 26,497 or 2%

$287,661 or 166%

$ 94,116 or 32%

UP 85% over 1946

UP 9% over 1945

!. 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

2. George W eaton Limited (and 17 subsidiaries) 1946 Operating Profit: $1,198,731

Source: Financial Post. Survey of Corporate Securities 1947 and weekly publication.

21

UP 17% over 1945

UP 41% over 1945

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 Month Consumer

March 1946 ____________________________________________________ 10 cents

June 1946. _____________________ ______________________ 12

March 1947 ------·-- ________ -------------------------------14

June 1947 --------------· ---------·- _________________________ 14

Total Fann Income from Milk, B.C.

1,138,000

1,321,000

1,200,000

1,318,000

Source: Dominion Bureau of Statistics, Monthly Dairy Reyiew.

Fluid Milk

682,000

690,000

749,000

596,000

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 middle­

man 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!

( Pas sing 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 ------------------------------------------------------------------------$ 8,800,000 1940 -----------------·--····--·····-----------------------------$ 9,600,000 1941 ----------------·-················--------------·----------------·----------------------$10,200,000 1942 -----------------·-··-···-----------------------------------------------------------------$12,000,000 1943 ---------------------------·······---------------------···-----···-···--·-···------------------$11,300,000 1944 -------------------------------------------------------------------------$11,200,000 1945 ---------------------·--····--·--··--· ·---------------····------·-·-····--······---------$12,200,000 1946 ----------------------------------------------·---------------·-------------------$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! )

Year Before Tax

1944 ---------------·-------------------------·· $ 9,501,000 1945 -----------------------------------····- $10,567,000 1946 -----····----------------------- $ 9,677,000

PRODUCTION IS UP!

Net Profit After Tax

$ 5,749,000 $ 5,782,000 $ 6,265,000

Production of Cigarettes ( 3) 1939 --------------------------------------·----------------------------------- 7,163,000,000

1945 -------------------------------------------------------- 17,684,000,000

WAGES ARE- WELL

Dividends

$ 4,262,000 $ 4,262,000 $ 4,262,000

Per Capita Consumption 630

1209

1945-Males-Average Weekly Wages -------------------------------------·--·-····-·-$25.68 ( 4)

1945-Females-Average Weekly Wages -----·-·-··------------------------·······-·····$19.01 1947 (Oct. )-All Workers-Average Weekly Wages ---------·---------------$28.37

Sources:

•

IN 1945 THE TOBACCO INDUSTRY MADE A NET PROFIT ON EVERY EMPLOYEE

(WAGE and SALARY EARNER) OF $1150

( 1) Bank of Canada-Statistical Summary Oct.-Nov. 1947. ( 2) Financial Post Survey of Corporate Securities 1947.

( 3) Statistical Handbook of Canadian Tobacco D.B.S. 1947.

( 4) 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% wtU

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

Salaries, Wages & Supplementary

Labor Income

1938 ---------------------------------------------- $2,476,000,000

1939 -------------------------------------- 2,565,000,000

1940 ------------------------------------------- 2,922,000,000

1941 --------------------------------------------- 3,555,000,000

1942 --------------- ---------------------------- - 4,219,000,000

1943 ---------------------------------------------- 4, 703,000,000

1944 ------------------------------------------ 4,869,000,000

1945 ----------------------------------------------- 4,859,000,000

1946 --------------------------------------------- 5,113,000,000

Increase 1938-1946 --------------------------------------107%

0 Excluding dividends paid to non-residents.

PROFITS OF BUSINESS Unincorporated

Business ( except farmers)

$429,000,000

440,000,000

493,000,000

575,000,000

607,000,000

636,000,000

691,000,000

771,000,000

907,000,000

111.4%

Corporations•

$292,000,000

421,000,000

614,000,000

935,000,000

1,126,000,000

1,126,000,000

1,068,000,000

1,102,000,000

1,17 4,000,000

302%

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

Forestry and Mining _____ -----·- ___ _ __ __________ 14,000,000

Fishing, Hunting and Trapping ----------------- 10,000,000

Manufacturing ------------------------------------------------- 59,000,000

Construction --------------------- -------------------------------- 44,000,000

Transportation, Communication, Storage ____ 17,000,oo0

Wholesale Trade -------------------------------------------- 19,000,000

Retail Trade ---------------------------------------------- 111,000,000

Finance ---------------------------------------------------------- 11,000,000

Community Service ------------------------------------ 61,000,000

Recreational Service -------------------------------------- 3,000,000

Business Service ---------------------------------------------- 32,000,000

Personal Service ---------------------·----------------------- 48,000,000

Total -----------------------·----------------------------$800,000,000

1946 Net Income or Profit

$1,244,000,000

20,000,000

69,000,000

90,000,000

103,000,000

36,000,000

45,000,000

263,000,000

20,000,000

113,000,000

6,000,000

61,000,000

81,000,000

$2,151,000,000

Source: Dominion Bureau of Statistics, National Accounts Income and Expenditure, 1938-1946.

27

Percent Increase

235

43

590

53

134

112

137

137

82

85

100

97

68

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 % ) EARNED 294,616 taxpayers with families of 4-156,200 or 53.0% t LESS THAN 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 ) $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 ! Number of

Industry Companies

Agriculture, Fishing, Forestry ----·-···-···------ ___________ 345 Mining -------------------------------------------------------------- 315 Manufacturing -------------------------------------------------- _ 6, 426 Construction -------------------------------------------------------- 667 Pub lie Utili ties ---------------------------------------___________ 1,081 Wholesale Trade -------------------------------------------------- 3,091 Retail Trade ---------------------------------------------------------- 3,924 Service ----------------------------------------------------- ______ 2,228 Finance ----------------------------------------------------- 2,817 Unclassified ------------------------------------_____________________ 57

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°

Note that in 1945 the average company made over three times its standard profit.

Percent Increase

374% 446 208 321 298 194 189 189 225 346 225

"' 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.