Columbia University Libraries Digital Collections: The Real Estate Record

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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