Cost of Doing Business Now Higher Than Twenty Year Average

Letter Sent to oll Lumber Yards in California by E. C. Parker, President of The California Retail Lumbermen's Association

About a month ago we sent you a letter giving actual statistics to show that the average retail lumber price in 1937 was less than a twenty year average. It can also be shown by actual statistics that most items that compose the lumberman's cost of doing business are higher in 1937 than a twenty year average. Taxes, including Federal and State in,come taxes, County and City property taxes and licenses, and Federal and State old age and unemployment taxes, are notably higher than a twenty year average, and the same is true of most other items of expense. One of the most important items of expense for lumbermen is the question of labor, and as a matter of interest we have compiled the price of labor over a period of twenty years.

The lumber industry does not have available any combined statistics relating to the retail trade, and we have been obliged therefore to average the wage statistics gathered from representative firms in the city of Los Angeles. The figures shown may be a little higher than rvould be the case in outlying districts or in other sections of the state, but we feel that they will show the trend through these years throughout the state. We have taken four classes of lumber yard labor: ordinary yard laborer or piler, loader or tally- from January I, I9L7 to December 31, 1936 inclusive and have shown same on chart A. We have also taken the rate for each of the four classifications separately over the twenty-one year period for January and July of each year and have shown same on chart B. man, medium truck driver, and stickerman, matcherman or combination millman. We have taken the simple average rate for the four classifications combined for January and July of each year and then taken the average rate for the four classifications combined for the twenty year period

The simple average of the hourly rvage rate for Laborer, Medium Truck Driver, Orderman, and Mill Machine Man combined for a period of trventy years from l9l7 to 1936 inclusive-$ .6375. Jan.

The above does not give the weighted average (rnan hours into total amount) as such statistics are not available, but the personnel of many yards in Calfiornia consists of the four wage earners listed above and the use of the simple average for them will, we think, shorv the labor trend.

The average hourly wage rate for a period of 20 years fuom I9l7 to 1936 inclusive for Laborers is $ .4696; f.or Medium Truck Driver $ .6126; for Orderman $ .6546; and for Mill Machine Man $ .8133.

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Chart A and statistics show that the simple average of the four lumber yard wage earners in July, 1937, is 24 per cent higher than the twenty-year average lrom I9I7 to 1936, inclusive. The percentage of increase is, in fact, greater than this because the statistics do not reflect the extra pay for overtime now prevalent and many other such added labor expenses to which the employer is subjected. Lumbermen are not particularly concerned with the high price of labor; they want their employees to have the best working conditions and enjoy the highest possible wage, but they are particularly concerned with the fact that statistics will also prove that the gross margin of profit on the goods sold by lumbermen is not higher than a trventy-year average, whereas practically every item of their cost of doing business is considerably higher than a twenty-year averag'e.

Is there nothing that can be done to correct this condi- tion our industry?