October 9, 1920





RECORD   AND   GUIDE





511





BUILDING    SECTION





Wage Increases Cause of High Building Material Prices

Dealers Declare Drop from Current Levels Is Impossible While Common Labor
Demands Excessive Pay for Producing Structural Commodities

costs will be lower, has published the following statement:

"The hope for a reduction in the cost of building materials
rests very largely on the hope for a reduction in wages, be¬
cause for every dollar spent for brick, cement or steel which
goes into a building, from 85 to 90 per cent, of such price ulti¬
mately goes back to the laborer who dug the clay, mined the
coal, burned the brick, ground the cement, rolled the steel and
transported all of them over railroad lines to the site of the
work and built them into the structure. Until these related
wages go down, therefore, it is not reasonable to expect any '
substantial reduction in the price of building materials. With
the present attitude of labor there seems less chance for a re¬
duction in building costs due to lower wages, and with this
same attitude aflfecting 90 per cent, of the cost of building
materials, there seems small chance for a reduction in the price
of these materials."

The effect of the constantly increasing wages for common
labor has naturally been most marked in those commodities in
which it is used in greatest proportion. Sand, for instance,
stands out prominently in this line, as there is no manufactur¬
ing costs entering into its preparation for use in construction
other than that of the common labor required, first, to dig it
out of the bank; second, to screen it, and third, to load it upon
the barges and transport it to the site where it is to be used.
The cost of this commodity to the building industry has in¬
creased 150 per cent, since 1913.

Common brick prices have advanced 257 per cent, between
1913 and 1920, practically all of which is due to increased labor
costs. It is true that fuel has greatly increased in price and
that towing, machinery and other factors entering into pro¬
duction have gone up, but even in these items one of the most
important phases has been advanced wages for common labor.

The analysis made by the Fuller Industrial Engineering Cor¬
poration of the most common essentials of construction shows
the same upward trend as to prices during the past few years,
and in every instance the advance is due to higher wages.

This fact is also borne out in the study of wage rate advances
between 1913 and 1920 for the various skilled trades in the
building industry and comparing these increases with that of
common labor in the same industry during the same period.
Wages for bricklayers have advanced 78 per cent, between 1913
and the present time. Carpenters are to-day getting 60 per
cent, more than they did in 1914. Painters' wages have in¬
creased 100 per cent, in the past few years and plumbers and
steamfltters are averaging 78 per cent, higher wages now than
in pre-war times. The recent increases to electricians amount
*o 100 per cent.; plasterers, 56 per cent., and sheet metalwork¬
ers, 78 per cent.

Wages to common laborers employed in the building indus¬
try are 329 per cent, higher at present than they were in 1909,
and show an increase of about 100 per cent, during the past
year. This is the crux of the building cost situation. Builders
admit little hope of readjusting common labor wages while
there is a keen demand for labor of this character and while
emigration is retarded. The salvation of the building industry,
they say, must come first through a decrease in demand for
common labor, and less competition for it, and then by an
unlimited flow of workers from other countries who will re¬
place those who went back to participate in the war.





EXCESSIVE prices now prevailing for building mate¬
rials and supplies are based almost wholly upon the
costs of production, and until these are reduced there
can be no genuine recession in either material prices or con¬
struction costs."

This is the consensus of opinion among manufacturers of
various commodities essential to construction, dealers in these
materials and also of architects and contractors generally.
Production overhead has advanced to the high level maintain¬
ing to-day because the common labor involved in the manu¬
facture of structural materials has increased out of all pro¬
portion to the advances in other phases of production.

Tenement House Commissioner Frank Mann announced this
week that his recent statement to the effect that no combina¬
tion of building material dealers had been found reflected the
views of building material dealers. He said: "I called the
dealers of this city to a conference and their opinion was that
high prices of building materials were regulated solely by the
law of supply and demand. The dealers declared that labor
was twenty-five per cent inefiicient as compared with pre-war
standards, while at the same time that present wages were
many times above the levels prevailing in 1914."

Edward E. Buhler, manufacturer and dealer in building ma¬
terials, said that the efifect of the ruling high wage rates of
common labor required in the manufacture of practically
every kind of structural material was the most important fac¬
tor in holding construction costs to their high levels of to-day.
Mr. Buhler is strongly of the opinion that before present levels
can be lowered it will be necessary to reudce common labor
costs to a point closer to that of pre-war times

"Unless one is a manufacturer of building materials," he de¬
clared, "it is somewhat diflficult to realize the extent production
is dependent upon unskilled labor. Common and face brick,
hollow tile, architectural terra cotta, sewer pipe and other
commodities of a similar character are the product of un¬
skilled labor to a large extent. During the past few years,
really ever since the outbreak of the war in Europe, this type
of labor has been increasingly hard to obtain, and when avail¬
able has demanded wages that formerly were only obtained
in the most skilled trades. The cost of raw materials used
in the production of the majority of building materials is rela¬
tively nothing, but it is the extremely high cost of common
labor required in its preparation for manufacture, and also
that used throughout all phases of production, which have
caused selling prices to mount to the levels of to-day.

"In the manufacture of brick, hollow tile and materials of
this nature, clay is the prime raw product. This is in the
ground and costs nothing but the labor to get it ready for
manufacture. Lumber is at hand, but common labor must pre¬
pare it for milling. Ores for the great variety of metal prod¬
ucts must be mined by common labor before finished products
are possible, and so it goes throughout the entire list of struc¬
tural essentials; reduce common labor costs and a genuine re¬
cession in construction costs through labor material prices will
not only be possible, but will naturally follow."

After a very careful survey of the building situation not only
in the Metropolitan district, but throughout the country, the
Fuller Industrial Engineering Corporation, as a reply to numer¬
ous questions from prospective builders as to when building