The Curse of Leisure

I

A MERE business man without a record of great success has little right to the rôle of a prophet. But puzzling questions have arisen so frequently that I have been compelled to peer as far as I can into a rather obscure future, and what I discern has caused me to ask many more questions. Frankly, I do not like what I think I see ahead. I hope I am wrong.

The thing that concerns me particularly is, What are we going to do with our leisure time? Where does our leisure come from? Is our leisure a good thing? What are we headed toward? Are we going ahead or going back?

In my town, which I know better than any other town, there are too many merchants, too many hardware dealers, too many banks, druggists, newspapers, coal dealers, plumbers, painters, carpenters, florists, restaurants, lawyers, garages, filling stations, contractors, blacksmiths, doctors, and far too many unemployed. There are not too many factories, but I shall pass this point for the moment.

This city offers a situation unsurpassed for general manufacturing. That is why we established our factory here. Unskilled and semiskilled labor is available in quantity at very small wages. Women will work for almost nothing. Actually I have been ashamed at the smallness of some of the pay checks I have signed. And yet we have paid all that we could afford, and sometimes more. Our employees are fine people, hard-working, industrious, loyal, resourceful. I like them all and believe that they have a similar feeling for me.

A part of our sales are conducted through brokers, and in my trips I find that they complain there are too many brokers, too many manufacturers, too much production. In despair one broker exclaimed, ‘There is too much everything!’

A similar story emanates from jobbing houses. Said one dealer, ‘When will you fellows get a little sense and quit flooding the markets?’

And at our trade conventions we talk curtailment of production — which is never accomplished, although everyone recognizes that somebody has got to quit. Then the professional booster and optimist arises and states, ex cathedra, that there is no such thing as overproduction, that what we refer to by that term is really underconsumption. And then we resolve to have a special week each year to be advertised nationally to boost our respective sales.

After that I go home and decide that we must lower costs or die in the attempt. We have cut our labor costs in half without reducing our already small wages. Factory economies have been instituted that have never been heard of before in my experience. Raw materials have been bought with the greatest care. New price sheets have been gotten out based on our improved costs, but we find that our equally harassed competitors have been fired with the same zeal and have done much as we have done.

Everywhere it is the same story: overproduction — or underconsumption, if you prefer the Pollyanna version.

Consider the farm-surplus problem. Is it overproduction or underconsumption? Well, I have never heard of people going hungry in the midst of plenty, and you have n’t either. There are too many farmers and they are producing too much. Corn, wheat, hay, hogs, cattle, sheep, eggs, chickens, and all are being produced in quantities which cause prices to be forced down to ruinous figures if they are to be sold at all. Wealth to-day is seldom measured in possessions, as of old, but is regarded as real only when it is measurable in the form of cash in the bank.

II

In the commercial dailies we read nearly every week that we are entering into a period of the most intensive competition we have ever known. But anyone who is engaged in any kind of business is well aware of the fact that we are not merely entering — we are well into such a period. And why?

Our own experience points to a partial answer. Two years ago it required forty minutes of total pay-roll labor to produce one unit of our goods. Last year we reduced it to thirty minutes, and this year we got it down to twenty and one-half minutes. This we accomplished while still keeping wages at the same rate, but by careful planning and management we were able to produce more goods with the same people at work.

Now I am not so naïve that I think the same brilliant idea has not occurred to every other manufacturer. Others may not have been able to cut labor in half as wo have done, but as a rule the saving is accomplished by producing more goods with the same crew at work. This results in an added burden on our sales department, because it must now sell more goods against the competition of every other manufacturer who is producing more goods than previously.

In our business we have come to the appalling situation wherein it costs nearly twice as much to pay for the man power involved in selling the goods as it does to pay for producing them. If every one of our factory employees would work for nothing, so that our pay roll for productive labor would be absolutely zero, the saving would not be enough to get us into the dividendpaying class. Why? Just because it costs too much to sell goods. Salesmen’s salaries, commissions, and expenses are not all of the costs of selling. There are brokers’ commissions, advertising costs, demonstrations, free deals, discounts, special discounts, circulars, and what not, till it fairly makes one sick.

I know manufacturers in other lines well enough to know when they are telling the truth, and they all tell the same story. In contrast to this are the published statements of the enormous earnings of some of the big corporations, and when I read them I take a new lease of life, vowing that we too will get our share. Others are doing it; why not we?

Costs are lowered, but more goods are produced, and inevitably we realize that there really is such a thing as overproduction, especially when one produces a commodity as contrasted to a specialty.

Recently the Continental and Commercial National Bank of Chicago published the following paragraph and statistics. The increase of production with less labor is exactly parallel with our own experience, and no doubt was brought about in the same manner.

The efficiency of labor is strikingly indicated by a comparison of the two indexes noted below. Even allowing for capital improvements and better management, the tabulation shows that a marked increase in output has gone along with a reduction in the number of workers employed in manufacturing.

I should like to know what has become of the labor that has been eliminated. A banker friend said,’Oh, they are making radios and automobiles, and producing the luxuries of life.’ Others have admitted that they do not know.

About six months ago I spent several weeks in a large Eastern city studying production in a big industrial establishment with a view to reducing costs. I found that this plant was running exactly 51 per cent efficient as a producing unit. Because of the layout and inherent peculiarities of the place, there was no chance of eliminating help until other things were accomplished. The loss was due to waste and defective goods that would not pass inspection. The necessary programme of reform was laid out, appropriations secured for proper equipment and repairs, and soon an improvement was noted. By the time I left, the place was up to 60 per cent efficiency, and it has been climbing ever since. A few weeks ago it was in the eighties.

This was all very fine and a source of gratification, but it was accomplished by the production of more goods to sell on an already overloaded market.

At noontime I lunched with the executives of other neighboring factories, and from the inevitable shop talk it developed t hat two factories were on a five-day week, one was on a three-day week, and another that until this year has enjoyed phenomenal earnings has been operating only eight hours per day, with some departments practically closed, whereas, in the days gone by, it always ran sixteen hours with two shifts.

In each case the answer was overproduction. Four of the five concerns were national advertisers.

It seems inevitable that someone has got to quit producing. Are we victims of our own producing efficiency?

III

How does all this relate to the problem of leisure, one may well ask. As I see it, we have reached a point in our ability to produce where only a part of our population is required to produce all that the rest of the people will purchase. The words ‘will purchase’ are used advisedly, for it is practically self-evident that the bulk of the population purchases a greater amount of goods than its minimum requirements. Hence, if our purchases were down to bed-rock economy, we could get along on a whole lot less than we now absorb.

For example, I have several pairs of shoes where two pairs would suffice; two overcoats; five suits of clothes; two suits of overalls. I have a big car, yet I really do not need any. Magazines and books come into the house faster than they can be looked at, and I have too much food, as my waistline will testify. We burn more lights than we need and keep the house too warm in winter.

To me it is perfectly clear that the middle-class American buys more than he needs. If the sum total of his purchases were reduced to his actual requirements, the competition in the commercial world would be correspondingly increased.

To hazard a guess as to what per cent of our population above sixteen years of age is required to produce our foods, goods, and so forth, would be rashness for any but a trained economist. However, let us look at the figures just published, and quoted a moment ago, for the year 1926.

The index of manufactures is 108 and the index of employment is 91.8. Dividing 91.8 by 108, we obtain the figure 0.85. Even my untrained mind realizes that the quotient of an index divided by an index is still an index, but I believe that it can be interpreted roughly in terms of producers. Comparing this figure with the corresponding figure for 1923, we can see that approximately fifteen less persons were required to produce 100 units in 1926 than in 1923.

What has become of those fifteen hypothetical people? Are they out of a job? Common sense tells us no, for if we had 15 per cent unemployment among our producers we should hear about it in every paper. However, there seems to be a substantial proportion of those fifteen persons who are out of work.

If anyone doubts this statement, let him spend a few weeks in the employment department of a manufacturing establishment. It is no place for a tender-hearted man, unless he has a purpose in having his feelings harrowed and his sympathies worked up because of his inability to give work to all who need it, to those who are unhappy and despondent.

Unless we have greater outlets for our goods, certainly it will become more and more apparent that, as our manufacturing efficiency increases, there will be a larger group with too much leisure.

Let no Socialist, Red, or Radical seize on this utterance as justification for sabotage, soldiering, or restriction of output per worker, because, unless a great number of establishments are able to increase their efficiency, they will eventually go into a receivership or out of business, and this will throw still greater numbers of producers out of employment.

Who are these unemployed? What sort of people are they? I do not refer to the unemployed in periods of great depression such as we had in 1907, but to the unemployed in average times. For the most part they are misfits. There is an indefinable something about many of them which tells me at a glance that they are the last persons in the world I would hire and the first ones I would lay off. I call them misfits for lack of a better term, but any employer will recognize the description. Among the men, some are hopeless ‘dubs,’ some are trouble makers, some are shifty-eyed, some are thugs and ‘plug-uglies,’ some are dissipated, but many are simply unfortunate or too old. Among the women and girls are found some stupid ones, some so fat that the experienced man knows that their great weight is too much for small feet, some repulsive, some obviously vicious gossips who would disorganize a happy industrial family in a few weeks, others who one knows instinctively are not to be trusted. Then there are the amateur prostitutes seeking an enlarged clientele, but the bulk arc unfortunates, which means that the source of their trouble is not so apparent that one can name it instantly.

One man told me he had been looking for work for seven months, and once a veritable female scarecrow said to me, ‘ Well, I dee-clare. It was easier for me to get a man to marry me than it is to get a job.’

IV

What is the future of those possessed of too much leisure, not as individuals, but as a group?

We have had three shutdowns in my experience, and in our town is another much larger plant that frequently turns nearly everybody loose on the first slackening of orders. The manager, who is a good friend of mine, tells me there is no other way to avoid bankruptcy. Competition has forced its prices down to the point where there is virtually no profit. It swaps dollars, hoping everlastingly for better days. Most of its labor is skilled and semiskilled. When the lay-off comes, common and semiskilled labor go. The skilled labor is retained.

I have watched with considerable concern these good folk we have laid off, to see how they survive, for I have always felt a moral responsibility for the man who has cast his lot with us.

Those who get along best are those who own or rent small tracts of land, have good gardens, raise chickens, keep a cow or two and perhaps a pig. One of my former employees has five acres, and this possession renders him absolutely independent for long periods of time.

Those who do not ‘get by’ are more of the city type, who must buy everything that they consume. The grocer carries them a few weeks, finally cuts off their credit, and they drift away, seldom to return. Of course the grocer loses his money.

The present tendency toward decentralized manufacturing, as practised by the Ford Motor Company and a few others, is a step toward taking advantage of a situation where labor is not dependent on its daily wage for existence. If a shutdown must come, it is not such a hardship for all concerned; those laid off can exist for considerable periods without becoming debt-ridden, and they do not drift away as rapidly as they do in the cities.

My experience in city and country manufacturing leads me to prefer the latter every time, except where highly skilled labor is required in quantity. A worker who has been a farmer is the most resourceful person one can find, because the long years of isolation have developed a self-dependence unequaled in any other group. To one who has had opportunity such as I have had to observe both city and country manufacturing the contrast, is astonishing, and labor costs are 50 per cent less in the country than in the city.

However, the worker who is selfsufficient, who produces most of his living, except perhaps shoes and clothing, and frequently has something to sell besides the labor for which he has been hired, is not the potential consumer as is the city type of worker, who must buy everything.

Further evidences of the drift toward the utilization of the self-sufficient type of employee are frequently visible. It is apparently brought about by competition, but from it a vicious circle of events may result. Whenever a family or person develops a less highly specialized form of living and does more for itself, it will buy less from others. Manufacturers, shopkeepers, and farmers will alike share in the reduced market, and competition for the remaining trade will be heightened. Efficiency will increase; it must increase under such competition. The production per worker will increase, but there will be still more leisure available for those who do not want it.

Without the intervention of outside forces, such as enlarged foreign demand, wars, or wholesale destruction of producers, I foresee the gradual but considerable development of two sorts of what might be called peasantry. The buying power of both groups will be somewhat limited. The first group I think of as that of the industrial peasant, who is well fitted to survive. This is the group who work in industry when possible, but take their living off the very small tracts of land. They are selfsufficient and independent. Perhaps we should call them country gentlemen, but they are not true farmers. They produce for their own needs and sell only a part of their labor. As a potential market they are not a large factor.

The second group, which I shall term the true peasants, are those who cannot make a go of life in any place independently and whose struggle is for existence itself. The misfits who seldom get a job may go back to the land, if they ever came from there. They cannot exist in town, they are incapable of handling farms. What can they do? In Europe they are usually peasants or retainers, working for five to ten dollars per month and a place to live. Many of them spend their entire lives in that fashion.

A distinguished European told me last month that his greatest surprise on coming to this country was to hear all the talk about getting ahead, whereas in his native land fully half the population were satisfied if they had shelter and enough to eat. It is hardly possible that America will ever come to such a situation, but the conclusion is inevitable that there are forces at work that tend in that direction.

The downfall of civilization predicted by the world-famous prophets of gloom may or may not come about. If it does occur, it will probably take the following order. One by one the weaker members of our industrial units will be forced out of existence, and those persons previously engaged in such enterprises will seek employment elsewhere. A larger proportion of the people will become more and more self-sufficient by reversion to a less specialized form of life. Those who cannot adapt themselves will attach themselves as retainers or peasants, as they do in Europe today, to larger landowners and live on next to nothing, or they will be public dependents.

Even as the saturation point in the automobile industry will be first found in the used-car market, so in life it will be found in the discarded individual and the empty factory.

As I said in the beginning, I hope that I am wrong. It would give me a real sense of satisfaction to have every point refuted beyond the possibility of a doubt. For once in my life I should like to be shown that I am absolutely and hopelessly in error. These are, however, not the reflections of a moment only, and they have been discussed with men in many walks of life. Very few disagree with me, but still I hope I am wrong.