Readjustments of Prices and Wages
For Ten Months commodity prices have fallen steadily. Sharp declines in wholesale prices have been followed—at a less rapid rate—by reductions in living costs. One of the consequences of this development has been a sharp controversy over the relation of commodity price readjustments to the future course of wages, for if living costs should become stabilized at present or lower levels and wages remain unchanged, employees generally would receive substantial gains in real wages and in purchasing power.
Opposition to wage reductions, at least in the immediate future, has been expressed recently by prominent business men who contend that wage cuts would reduce efficiency in production, would limit the markets for manufactured goods and other commodities, and thus would hamper the ...