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Real wages and the standard of living in Vancouver, 1901-1929 Bartlett, Eleanor Anne 1980

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REAL WAGES AND THE STANDARD OF LIVING IN VANCOUVER, 1901-1929 by ELEANOR ANNE BARTLETT B.A., University of B r i t i s h Columbia, 1978 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS in THE FACULTY OF GRADUATE STUDIES DEPARTMENT OF HISTORY .. We accept t h i s thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA September 1980 Eleanor Anne B a r t l e t t , 1980 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of Brit ish Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the Head of my Department or by his representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of H I S T 0 R Y  The University of Brit ish Columbia 2075 Wesbrook Place Vancouver, Canada V6T 1WS 26 SEPTEMBER 1980 Date ABSTRACT For many years the consensus- among some Canadian scholars has been that the l i v i n g standards of Canadian b l u e - c o l l a r workers deteriorated during the early twentieth century. This erosion, i n the face of economic expansion, has been attributed to the rapid population growth brought about by immigration which increased the labour supply and d i l u t e d the q u a l i t y of the workforce by i n t r o -ducing large numbers of r e l a t i v e l y u n s k i l l e d workers. This explanation has come to be known as the displacement theory. However, recent evidence on national working class r e a l wages has challenged this pessimistic thesis. This paper examines re a l wages on the smaller scale of the c i t y of Vancouver in order to test the hypothesis that the Vancouver working class did not share i n early twentieth century economic growth. In doing so i t also provides one new measure of the working class standard of l i v i n g i n the c i t y . According to the indexes compiled i n this thesis Vancouver re a l wages i n -creased some 18% to 257» between 1901 and 1929. Real wages increased u n t i l 1905 and then dropped by 1910 reaching a low point i n 1911. They then increased reaching a peak i n 1915 and then dropped, bottoming out around 1919 and 1920. Thereafter r e a l wages climbed s t e a d i l y to the end of the decade with s l i g h t dips in 1924 and 1925. A l l the evidence examined here suggests that economic growth did not wholly benefit the working class i n the c i t y . The i n f l a t i o n which came with rapid eco-nomic growth could often outweigh the benefits which i t brought for the s k i l l e d and un s k i l l e d , the unionized and the unorganized. In addition the indexes do not con-t r a d i c t the argument that displacement worked to keep wages down. Vancouver work-ingmen may have benefitted less from rapid economic expansion of the f i r s t years of the century.than from more modest growth l i k e that which occurred i n the 1920s. i i i TABLE OF CONTENTS ABSTRACT p. i i LIST OF TABLES p. i v LIST OF FIGURES p. v, ACKNOWLEDGEMENT p. v i CHAPTER 1. I n d u s t r i a l i z a t i o n and the Standard of L i v i n g p. i ' CHAPTER 2. The Construction of a Real Wage Index p. 22 CHAPTER 3. The Vancouver Money Wage Index, 1901-1929 p. 54 CHAPTER 4. The Vancouver P r i c e Index, 1901-1929 p. .74 CHAPTER 5. The Vancouver Real Wage Index, 1901-1929 p. -95 APPENDIX 1. Vancouver Wage Data from Transcripts of the Commission on Labour, 1912-1914 p. " I l l APPENDIX 2. p. 115 BIBLIOGRAPHY p. 1-16 i v LIST OF TABLES TABLE 1. Value of Bui l d i n g Permits Issued by Years, Vancouver, 1903-1929 P • 8 TABLE 2. Percentage of Unemployment i n Trade Unions, June and December, 1915-1929 P« 9 TABLE 3. Nominal and I m p l i c i t Weights Derived from Census Wage Earner Data P« 58 ' TABLE 4. Iiidex Numbers of Average Hourly Wage Rates f o r Selected Vancouver Industries, 1901-1929 P- o0( TABLE 5. National Average Wage Rates P- 61( TABLE 6. Im p l i c i t Sub Group and Group P r i c e Weights P« 80 TABLE 7. Revised Bertram and Percy P r i c e Index for Vancouver, 1901-1929 P« 83' TABLE 8. Washington-Weighted P r i c e Index for Vancouver, 1901-1929 P- 84 TABLE 9. National Pri c e Indexes P« 85 TABLE 10. Vancouver Real Wage Indexes, 1901-1929 P- 97 TABLE 11. National Average Real Wage Indexes P- 98 LIST OF FIGURES Index Numbers of Real Wagess Revised Bertram and Percy Index, 1901-1929 Index Numbers of Real Wages, Washington-Weighted Index, 1901-1929 v i ACKNOWLEDGEMENT I wish to express my appreciation to W. Peter Ward for the guidance and en-couragement he has given me i n my years of undergraduate and graduate study and for acting as my thesis supervisor i n the past year. I would also l i k e to thank Donald G. Paterson for his many s e l f l e s s l y given hours of assistance i n the tech-n i c a l aspects of this thesis. F i n a l l y I must thank my c r i t i c , f r i e n d and husband, George Gregory, for his constant support and enthusiasm. 1 CHAPTER 1 The Standard of Living and Industrialization For many years the consensus among some Canadian scholars has been that wage earners did not always benefit from early twentieth century economic expansion. Proof of economic growth was not hard to find. For that, the stati s t i c s of increasing revenues in manufacturing industries and natural resource extraction, the miles of newly-constructed railway lines and the value of building permits, to name a few, could be cited."'' However, econo-mists and historians were less certain of the extent to which the workingman shared in this prosperity. Specifically they spoke of the blue-collar worker, that i s , the manual worker who earned a wage and was more subject to the vagaries of capitalist production and free markets than the non-manual worker. Clearly the workingman's labour had been greatly in demand at certain times, while at other times many of his number had roamed the streets in hope of a job, or f a i l i n g that, r e l i e f . Even in times of f u l l employment his wages might have been eroded by high living costs. However, in 1979 in an ar t i c l e published in the Canadian Journal of Eco- nomics , Gordon W. Bertram and Michael Percy produced evidence which challenged 2 this pessimistic thesis. They gave estimates of average national working class real wages which increased rather than remained constant or declined as did the real wages estimated'earlier by other scholars (Essentially a real wage compares changes in money wages with changes in the cost of living so as to give a measure of the purchasing power of wages*) In the United States in 1961 Albert Rees had similarly challenged the position of American scholars that workingmen had not immediately shared in £he profits of late nineteenth 3 century and early twentieth century American economic growth. 2, Much of this paper i s concerned with duplicating Bertram's and Percy's methods of deriving real wages on the smaller scale of the city of Vancouver. This i s being done to test the thesis implied by O.J. Firestone, Sylvia Ostry and others that the Vancouver wprking class did not share in early twentieth century economic growth and to provide one measure of the working class stan-dard of l i v ing in that c i t y . Of necessity, much of the discussion which follows w i l l be technical. The data used and the method of constructing real wage indexes from money wage and price indexes w i l l be explored. In addition, this quantitative evidence w i l l be considered in the context of the existing qualitative record. The remaining discussion in this chapter w i l l explore more fu l ly the historiographical debate about the condition of the Canadian working class in the early part of the twentieth century. I t w i l l also summa-rize the findings of other standard of l i v ing studies which have investigated the impact of industr ial ization on labouring people. In the f i r s t three decades of th is century Canada's economy expanded rapidly. The years up to 1913 commonly have been referred to as the boom 4 period, the prosperous Laurier years, or the era of wheat, ta r i f f s and r a i l -roads. The post-war period up to about 1929 was the calm before the storm, the bubble of prosperity that depression burst. Certain contemporary obser-vers thought that this prosperity was general. In his observations of Canada, published in 1906, J .A. Hobson remarked that "every able-bodied man can find a job", and quoted the then Minister of Labour who sa id , "we have no poor""*. Injected into this good times mentality, however, were certain reservations. One of the most prominent social c r i t i cs of the time, J . S . Woodsworth", - was not convinced that a l l social groups shared in prosperity. He published his observations of poverty and cripplingly high l i v ing costs in Winnipeg and Vancouver. For example, in Strangers Within Our Gates, f i r s t published 3 in 1909, he cited the plight of poverty-stricken Italian migrants l i v i n g in Winnipeg's North End who were driven by high rents into crowded, unsanitary tenements.^ In On the Waterfront, published in 1919, he quoted a disgruntled Vancouver dock worker's complaint, 'Aren't the capitalists making their millions out of us. This new ship nearly paid for herself in the last voyage and yet the price of rice goes up.'? Latter day economists and historians have taken a pessimistic position about the condition of the working class in the early twentieth century. O.J. Firestone, i n his book Canada's Economic Development, 1867-1953, pu-blished in 1958, produced estimates of net national income per capita which showed an annual rate of change of 1.95% for the years 1890 to 1910, but ne-8 gligible change for the years 1910 to 1930. Firestone attributed the growth of the f i r s t period to Canada's shift away from being a predominantly agri-cultural society, a society i n which the standard of living was "usually quite low." He attributed the negligible rate of growth in the second period to the economy's need to absorb the rapid population growth of the f i r s t decade of the century, and the workingmen's goal of hours of work reduction, a goal often more important to them than wage increases. The impact of both.of these fac-9 tors was to slow down the effect of economic expansion on real incomes. Sylvia Ostry in Labour Policy and Labour Economics in Canada, written in conjunction with H.D. Woods, produced statistics which showed erosion of the workingman's position at an earlier point in time than Firestone's estimates had shown. She estimated that national real wages declined by 3.9% between 1901 and 1914.1-0 Like Firestone, Ostry attributed the erosion of the working-man's position, in the face of economic expansion, to the rapid population growth brought about by immigration. She wrote that: 4 The bulk of these immigrants were from southern, central, and eastern Europe and were, on the whole, less skilled and less educated than those from the British Isles and north-western Europe, the previous major sources of immigrant inflow. These factors un-doubtedly explain the f a l l in real wages. Not only had the supply of labour increased enormously, but large numbers of relatively unskilled workers dilluted the 'quality' of the labour force.H William L. Marr and Donald G. Paterson, in Canada: An Economic History, have elaborated on what has become known as the displacement theory. Between 1901 and 1911 these less skilled and less educated immigrants came to Canada to farm. Facing capital barriers to farming which they had not anticipated, they entered the labour market thus swelling i t s size. Labour demands were 12 more than met by this swollen labour market and, so, real wages were reduced. The pessimism of Woodsworth has been most strongly echoed by two histo-rians, Terry Copp, in his study of the Montreal working class during the early twentieth century, and Michael J. Piva . i n a similar study of Toronto. From their studies of available Dominion and provincial labour department material on working class wages and l i v i n g costs i n the two cities they concluded that the real wages of most blue-collar workers declined and a large number, i f not a majority, of blue-collar families' incomes were not sufficient for them to 13 l i v e decently. .Even in the prosperous days of the late 1920s Copp argued that "47 per cent of the Montreal labour force / f e l l / well below /the/ poverty line and an additional 25 per cent /were/ on the edge . . ." Copp's poverty line was an income of $1590 per year which was the cost of a budget described by the Dominion Department of Labour as meeting the ordinary needs of a family 14 of five. Piva estimated that in 1921 a family of five in Toronto needed $1,655.29 per annum to purchase the items covered in the Department of Labour's budget. However, he noted that the average Toronto adult male blue-collar worker's wage was only 75.6% of this amount.*"' In addition, Copp and Piva 5 argued from their estimates of increases in return from production that the social inequality of incomes increased i n both c i t i e s . They noted that the value of production return grew more rapidly than did workingmen's 16 wages. As an economic and demographic setting Vancouver seemed to have a l l the necessary preconditions for labour displacement, f a l l i n g real incomes, i n -sufficient working class real wages and growing social inequality. Between 1901 and 1929 the exploitation of the natural resources sector was undertaken in B r i t i s h Columbia. Exports of lumber products increased ten fold from 326 million board feet in 1902 to 3.3 b i l l i o n in 1929; the value of mineral production increased from $20 million in 1901 to $68 million in 1929; and the value of fishery production increased from $8 million in 1901 to $24 million in 1929.*^ The value of a l l manufactures in the province, including secondary processing of primary products, increased from $19 million in 1900 18 to $271 million i n 1928. The demographic character of Vancouver reflected provincial economic expansion. The city's population grew from 27,000 in 1901 to 100,000 in 1911, to 117,000 in 1921 and to 247,000 in 1931. 1 9 This growth was mainly a result of migration and not natural increase. Immigrants flocked to the west coast to pursue economic activities of their own or to work for others. In 1911 only 44% of the population had been born in Canada, 20 of whom only a third had been born in B r i t i s h Columbia. Most of the immi-grants were men of working age, a fact borne out by the 1911 sex* ratio for Vancouver which showed that there were l h males for every female and by the median and mean ages of the Vancouver population in 1911, 27.48 and 27.96 respectxvely. 6 The c i t y ' s economy did not always seem capable of absorbing the growing population. At times employers experienced real shortages of labour. An ar -t i c l e entit led "Lots of Work in Vancouver" published in Br i t i sh Columbia Maga- zine in 1911 attested to this in i t s warning to "hoboes": ...Keep away from Vancouver, town no good, work stares in your face from every labor agent's window and comes a l l the way to meet you. If you come here you are l i k e -ly to get shanghaid into a logging camp or a railway con-struction camp and put to work keep away In times of depression, though, the labour surplus reached high levels as men drifted into the city from the pra i r ies , the inter ior of the province and American coastal c i t i e s . In the autumn of 1908 the mayor of Vancouver for -warded the following notice to a number of newspapers in Manitoba, Saskatche-wan and Alberta: "The citizens of Vancouver desire to notify a l l parties that for the present winter the labour market in Van-couver i s rather overdone, and no inducement can be offered for labourers before, at least , next March or A p r i l . "We give this notice in view of the rush of labourers to this city from the prair ie d is t r ic ts last f a l l . The city w i l l only take care of actual residents who have resided here at least s i x months.23 The Vancouver labour force was affected by the province's periods of boom and bust as well as regular seasonal fluctuations. The province's natural resource industries were dependent on external demand for their markets. When demand was high jobs were available, expansion was undertaken, and migrants were attracted to the province. When demand f e l l so did the number of jobs. Many workers then le f t B r i t i sh Columbia but s t i l l others came in search of work or a mild winter climate in which to spend their unemployment. In describing more recent times, however, Marr and Paterson have pointed out that the diversif ication of the primary resources base has meant that 24 fluctuations in them did not necessarily occur simultaneously. On top of 7 these cyclical economic fluctuations were more regular seasonal variations. Many of the resource industries were active primarily in the spring, summer and early f a l l months. Each winter many of the workers i n these industries were unemployed, many of whom flocked to Vancouver to find other work or to spend their unemployment. While this "normal" pattern of employment at some times seemed to result in no noticeable distress, at other times i t resulted in severe distress which greatly taxed the city's r e l i e f resources. This dis-tress was particularly severe when seasonal unemployment coincided with cy c l i c a l unemployment. An idea of the more long-term economic variations in Vancouver can be gleaned from trends in the annual value of construction, an activity that was very responsive to changes in the business climate. These figures are given here in Table 1. Similarly an indication of cyclical and seasonal fluctuations can be obtained from an examination of trade union reports of unemployment for the province given here i n Table 2. As Table 1 suggests there was considerable building activity between 1910 and 1912T, after which there was a considerable decline. The construction industry did not revive in the last years of the war even though other industries in the city recovered after the 1913-15 depression. The building industry regained i t s pre-war levels in the late 1920s. As Table 2 implies unemployment increased in the winter. This seasonal unemployment was especially severe when i t coincided with cy c l i c a l business downturns. -To go beyond a general knowledge of these cy c l i c a l and seasonal variations i t i s necessary to reveal their impact on the Vancouver working class more fully.. In asking about workingmen's well-being in this period Canadian economists and historians have posed three questions. Did the position of workingmen improve over the period? How did their position compare to that of others in society? Was their standard of living sufficient for their health and happiness at any Table 1 Value of Building Permits Issued by Years, Vancouver, 1903-1929 1903 $ 1,400.000* 1912 $19,428,432 1921 $ 3,045,132 1904 1,968,891 1913 10,423,197*** 1922 8,661,695 1905 2,653,000 1914 4,484,476 1923 6,277,574 1906 4,233,910 1915 1,593,379 1924 6,230,774 1907 5,596,594 1916 2,989,893 1925 7,964,375 1908 5,950,893 1917 768,255 1926 15,501,262 1909 7,264,563 1918 1,450,229 1927 10,687,167 1910 13,150,365 1919 2,271,611 1928 12,777,293 1911 17,652,642 1920 3,569,636 1929 21,572,727** * For eleven months only. ** Point Grey and South Vancouver were incorporated into Vancouver in 1929. In 1928 the values of building permits in these two munici-palities were $5,136,850 and $1,533,145 respectively. *** The Labour Gazette reported that the 1913 figure gave an exaggerated notion of building activity since many of the projects did not obtain financing. The Labour Gazette 14 (July 1913):37. Sources; The Labour Gazette, 1903-1913; British Columbia, Provincial Bureau of Information, Manual of Provincial Information, Province of  British Columbia, 1930, p. 60. Table 2 Percentages of Unemployment in Trade Unions, June and December, 1915-1929 June December 1915 B.C. Canada B.C. 14.8 Canada 7 .9 1916 '5.8 2.1 2.4 2.0 1917 1.8 1.2 3.2 2.6 1918 .9 .4 4.0 2.5 1919 3.4 2.6 18.6 4.3 1920 5.8 2.1 11:6 13.0 1921 24.4 13.2 24.7 15.1 1922 7.1 5.3 13.3 6.4 1923 4.0 3.4 7.1 7.2 1924 2.2 5.8 10.2 11.6 1925 4.1 6.1 6.9 7.9 1926 2.6 4.1 7.5 5.9 1927 2.7 3.2 10.5 6.6 1928 3.6 3.2 6.9 6.6 1929 2.6 2.9 11.5 11.4 Source: The Labour Gazette, 1915-1930 Note: There are three problems i n using trade union reports to indicate unemployment l e v e l s . F i r s t l y and most obviously the reports do not r e f l e c t the positions of unorganized workers. Secondly, as K.B. Conn has noted, some unemployed trade unionists l i k e l y allowed their memberships to lapse. Therefore, the percentages may have under-repre-sented trade union unemployment. On the other hand, as the Department of Labour noted, the trade union reports could over-estimate trade union unemployment since "particulars of unemployment are more generally available for those trades - i n which the loss of time i s greatest." K.B. Conn, "Employment and Unemployment in Canada: Its Measurement, with Special Reference to 1919," Canadian H i s t o r i c a l Review 6 (Sept 1925): 236-44; "Trade Union Reports on Unemployment," The Labour Gazette 16 (April 1916):1122-5. 10 particular time? Before any of these questions can be asked, however, i t is necessary to explore their precise meaning and the means whereby they might be answered. Further to this end i t i s useful to consider how students of societies other than Canada have treated these questions. An example of a more thorough discussion of working class standards of liv i n g i s the now "antique" Br i t i s h standard of liv i n g debate which began while Br i t i s h industrialization was taking place and continued into the 1960s, having been vigorously renewed in the late 1950s. For as long as there had been a B r i t i s h debate the combattants had disagreed about whether the working class had benefitted from industrializa-tion. When the debate was renewed in the 1950s the question specifically asked by British scholars was: what impact had industrialization on the working class standards of living? The combattants divided into two camps, the optimists and L. 25 the pessimists. The optimists argued that physical or material living condi-tions improved. They used various quantitative measures of physical well-being such as incomes, consumption and health s t a t i s t i c s . Although most of the pessimists' energies were directed at challenging these arguments, they also considered how the working class fared i n contrast to other social groups, and the adequacy of their standard of l i v i n g . The pessimists were suspicious of quantitative proof since i t conflicted with the qualitative reports of contemporary observers. One of the measurements used by the optimists was the real wage. Bri t i s h cost of l i v i n g information has been available from a number of sources and has been used in the calculation of real wage indexes. Until the 1960s the best 26 cost of liv i n g or price index available was N.J. Silberling's. Although this index had the advantage over other indexes of being based on a large number 11 of observations there were several disadvantages to i t which Arthur D. Gayer, W.W. Rostow and Anna Jacobsen Schwartz t r i e d to overcome i n compiling t h e i r own index. S i l b e r l i n g had omitted commodities whose pr i c e s were constant or which fluctuated extremely. He had often c o l l e c t e d p r i c e s f o r a r t i c l e s which did not remain homogenous but which changed i n q u a l i t y over time, and h i s prices of imported items did not include duties. F i n a l l y , S i l b e r l i n g weighted commo-d i t i e s i n accordance with what he presumed to be the proportions they occupied of working c l a s s expenditures and not according to an actu a l measure of commodity preference. Gayer, Rostow and Schwartz corrected these shortcomings i n an e f f o r t to make t h e i r index r e f l e c t the actual p r i c e l e v e l . Nevertheless, t h e i r index, l i k e S i l b e r l i n g ' s , was s t i l l a wholesale p r i c e index and, as such, did not 27 evaluate consumer spending as p r e c i s e l y as a r e t a i l p r i c e index. Unfortuna-t e l y the compilation of a consumer p r i c e index weighted according to working class expenditure patterns has only been accomplished f o r s p e c i f i c occupational groups and i n l i m i t e d areas where r e t a i l p r i c e s and consumption patterns were 28 known. Two wage indexes were constructed at the turn of the century, one by Arthur 29 L. Bowley and the other by G.H. Wood. The l a t t e r ' s was an unweighted average of observations i n twenty-five towns and c i t i e s . Wood used no information about the numbers i n an occupation or the numbers of wage earners i n the c i t i e s and towns surveyed to weight the wages together to form the index. P h y l l i s Deane and W.A. Cole preferred i t to Bowley's index because even though Wood's was unweighted i t had a " r e l a t i v e l y large number of d i r e c t observations" of many d i f f e r e n t i n d u s t r i e s i n each of the l o c a l i t i e s . On the other hand, Bowley had : t r i e d to draw a general wage index from the "few industry s e r i e s f o r which — — — — 30 early data / e x i s t e d / i n s u f f i c i e n t / i . e . continuous/ quantity and q u a l i t y . " 12 When Deane and Cole compared the Wood index to the Gayer, Rostow and Schwartz p r i c e index the r e s u l t was a r e a l wage index which rose 25% between 1800 and 1824 and over 40% between 1824 and 1850. Deane and Cole pointed out that t h i s r e s u l t was obtained not so much because wages rose continually as 31 because, when they f e l l , they f e l l less than did p r i c e s . E. J . Hobsbawm, who i n the l a t e 1950s and early 1960s led the pessimists' assault on the optimists, was not at a l l convinced by such a r e a l wage index, corrected or not. He rejected the p r i c e component because i t consisted of wholesale p r i c e s , not the r e t a i l prices which workingmen paid. He thought that i f the r e l a t i o n between the p r i c e l e v e l s was not known, then i t could not be assumed that a wholesale p r i c e index could be substituted for a r e t a i l one. He was even more d i s s a t i s f i e d with the wage data pointing out that no seri e s f a i r l y represented the working class since they did not give a complete p i c t u r e of national wages. Moreover, the wages calculated were those of the b e t t e r - o f f s k i l l e d portions of the working class and they were standard wages, that i s , wages paid someone for a f u l l work week. As such, a wage index calculated from these wages did not take into account the u n s k i l l e d , the unemployed and those employed on short time, three groups whose standards of l i v i n g were thought 32 to f a l l by contemporary observers. R. M. Hartwell, whoowas Hobsbawm's p r i n -c i p a l optimist opponent, admitted that the indexes did not make such allowances but he argued that unemployment was decreasing, and not increasing, as a r e -s u l t of the new employment which i n d u s t r i a l i z a t i o n made possible. He did not deny that i n d u s t r i a l i z a t i o n produced pockets of technological unemployment but believed that, on the whole, unemployment decreased. To be l i e v e otherwise, he continued, was to hold a naive view of p r e - i n d u s t r i a l employment p o s s i b i l i t i e s . Although the indexes were flawed on tlfee and other points, Hartwell thought 33 that they at least suggested a general improving trend. But even i f the pessimists had agreed that working class r e a l wages i n -creasedfcbecause of i n d u s t r i a l i z a t i o n they were s t i l l i n a p o s i t i o n to dispute that on other points the standard of l i v i n g had deteriorated r e l a t i v e to f o r -mer times and to other s o c i a l groups, and that the standard was inadequate. Hobsbawm disagreed with another optimist argument that the working class bene-f i t t e d from increased returns from manufacturing because of a greater number 34 of manufacturing jobs and increasing wages i n that sector. Hobsbawm sugges-ted that manufacturing p r o f i t s were not translated into higher wages but were reinvested. On t h i s point he received assistance from S. P o l l a r d who argued that: The country which i s going through i t s i n d u s t r i a l r evolution has to create large savings at a time when i t s output i s very l i t t l e above what i s cur-r e n t l y considered the subsistence minimum f o r a large proportion of i t s population.35 Hobsbawm concluded that under these circumstances the working class p o s i t i o n deteriorated r e l a t i v e to that of c a p i t a l i s t s since the l a t t e r were maximizing 36 t h e i r income, that i s , p r o f i t s f o r investment. Hartwell contended that investment could not have been increased at the expense of the working class. He explained that "more e f f i c i e n t " c a p i t a l and most importantly, marked increases i n p r o d u c t i v i t y released funds for i n v e s t -ment. In a d d i t i o n i n d u s t r i a l i z a t i o n would not have been possible without pro duction increasing to the point where i t could take the masses beyond the subsistence l e v e l . In other words, production had to increase working class consumption by r a i s i n g the c l a s s ' incomes, or lowering i t s l i v i n g costs, or both. Hartwell argued that: a large and economic expansion l i k e the i n d u s t r i a l revolution was possible only with a large extension of the market, with the creation or discovery of i n -creasing and accessible markets with consumers w i l l i n g and able to buy the expanding outputs of goods and ser-v i c e s . 37 A longstanding optimist argument for material improvement i n the working class standard of l i v i n g was that working class consumption had increased and improved. Hobsbawm. thought that he had a powerful argument f o r challenging t h i s p o s i t i o n . He saw a decline i n wheat and milk consumption as evidence of 38 declining l i v i n g standards. Increases i n potato and f i s h consumption, to him, were evidence of decline since both were considered i n f e r i o r by the working cl a s s , the f i r s t being associated with the I r i s h and the second with Catholics. The increase i n butter consumption indicated that i t was being substituted f o r meat. And by comparing the population growth of London with the output of slaughtered c a t t l e at Smithfield, London's main supplier of beef, Hobsbawm saw that population outstripped meat production. He therefore argued for a 39 general cecline i n meat consumption from the London evidence. Hartwell retorted that the f a l l i n wheat suggested a switch from large bread consumption to a more varied d i e t . He countered the claim of dec l i n i n g meat consumption by arguing that carcass weights of animals at Smi t h f i e l d i n -creased, that other slaughterhouses i n the London area were coming into pro-minence, and that other meats, l i k e pork, were assuming importance. He ar-gued that f i s h was not considered i n f e r i o r , and that the increase i n potato consumption heralded increasing consumption of many other vegetables. In addition he thought increases i n tea, coffee, sugar and tobacco ind i c a t e d i n -40 creasing v a r i e t y i n working class d i e t s , a sure sign of improvement. Hobsbawm rejected t h i s by asserting that these four commodities were being consumed to r e l i e v e the tedium of increasingly i n f e r i o r and inadequate d i e t s . Hobsbawm also remarked that food and diets were inadequate because of adulte-r a t i o n . H a r t w e l l countered t h i s argument by i n s i s t i n g that food was no 42 l e s s pure than i t had been i n the eighteenth century. Hartwell was most persuasive, though, when he interpreted the evidence of increasing consumpt-ion of cotton c l o t h , soap, pottery and the other commodities which the new indu s t r i e s mass-produced. Here he came back to the argument he had made e a r l i e r that consumption increased because the i n d u s t r i a l revolution was 43 only possible with the extension of the domestic market. What of the con-f l i c t i n g i n t e r p r e t a t i o n s of the other consumption increases and decreases? Conclusions i n these areas would d i f f e r as long as there was disagreement about the importance of the various commodities i n working class budgets. Hartwell and the optimists could defend t h e i r arguments f o r material improvement i n working class l i v e s , but they were hard pressed to answer the pessimists' charge that i n d u s t r i a l i z a t i o n brought l e s s tangible disadvantages. For the optimists the benefits of c a p i t a l i s t production were c l e a r ; increased income and employment opportunities, a greater v a r i e t y of cheap consumer com-modities, better conditions of health. For the pessimists the disadvantages of c a p i t a l i s t production which had been expounded upon by Marx, Engels and others were equally c l e a r : the break-up of r u r a l society, the s u b s t i t u t i o n for i t of inhumane conditions found i n urban and factory l i f e , and the i n -creasing gap between r i c h and poor. As f a r as the pessimists were concerned, these disadvantages outweighed any material gains. Hartwell s t i l l t r i e d to attack these q u a l i t a t i v e observations of d i s t r e s s . He l a b e l l e d them biased and argued that observers l i k e Marx looked f o r d i s t r e s s and recorded only that. Hartwell imputed various psychological factors at work i n the minds of the observers. Their discontent, he said, was less the longing f o r the good o l d days than a " v i s i o n of an age of plenty" which i n d u s t r i a l i z a t i o n promised but 16 did not d e l i v e r quickly enoughf:.« Hobsbawm scoffed at such assumptions and warned that " i t was dangerous to r e j e c t the consensus of informed opinion." In the end both Hartwell and Hobsbawm seemed to concede that i n t h e i r discussions of the working class standard of l i v i n g that they had been d i s -cussing d i f f e r e n t issues about that standard. Hartwell concluded that: to say that the standard of l i v i n g for most workers was r i s i n g , i s not to say that i t was high, nor i s i t to a f f i r m that i t was r i s i n g f a s t , nor that there was no di r e poverty, and c y c l i c a l f l u c t u a t i o n s and techno-l o g i c a l unemployment of a most d i s t r e s s i n g character Not s u r p r i s i n g l y Hobsbawm made a stronger plea f o r the q u a l i t a t i v e evidence which supported h i s p o s i t i o n . The problem of the s o c i a l impact of the i n d u s t r i a l r evolution i s not whether men l i v e by white or brown bread, no meat or roast beef ... I t i s also, that men do not l i v e by bread a l o n e . ^ Hartwell and Hobsbawm were i n apposition to disagree with each other on a number of points. They could d i f f e r about which questions should be asked about the working class standard of l i y i n g and they could disagree about types of evidence. In response to the question about whether the p o s i t i o n of working-men improved, Hartwell argued f o r material improvement". But Hobsbawm c i t e d evidence of non-material d e t e r i o r a t i o n . He also challenged Hartwell's i n t e r -p retation of the p h y s i c a l evidence. To c i t e one case, Hobsbawm explained that the increase i n butter consumption was evidence of a decline i n l i v i n g standards not an enhancement. Even i f he had conceded that p h y s i c a l conditions got better, he was s t i l l i n a p o s i t i o n to give negative answers to the other two questions about the standard of l i v i n g . Hobsbawm could bring forward evidence that s o c i a l if i n e q u a l i t y was augmented and that l i v i n g standards were inadequate. The impasse at which Hartwell and Hobsbawm ar r i v e d can serve to c l a r i f y the standard of l i v i n g issue f o r other students. Hartwell and Hobsbawm could and did ask d i f f e r e n t questions and employed d i f f e r e n t forms of proof because the concept of l i v i n g standards i s so complex. A p o s i t i v e or negative answer to one question, therefore, does not demand conformity i n the answers i n the other questions. In B r i t a i n s i g n i f i c a n t material improvement may very w e l l have been accompanied by, and even res u l t e d i n , other forms of d i s t r e s s . The question that t h i s paper w i l l address when considering working class l i v i n g standards i n Vancouver i s the one that B r i t i s h optimists asked. Did the working c l a s s ' material standard of l i v i n g improve i n a period of economic expansion? The method of answering t h i s question i s l a r g e l y q uantitative a l -though the q u a l i t a t i v e record or the non-quantitative evidence of contemporary observers, w i l l be considered. In p a r t i c u l a r the r e a l wage or purchasing power of wage earners w i l l be measured. Of course, as the pessimists have pointed out, t h i s index i s susceptible to a number of flaws. Steps w i l l be taken to avoid them when p o s s i b l e . This study i s not intended to answer a l l questions about the condition of the Vancouver working class from 1901 to 1929. Never-theless t h i s study w i l l assemble evidence about one aspect of working class l i f e i n Vancouver that, to date, has not been brought together. 18 NOTES 1. M.C. Urquhart and K.A.HI Buckley give the following GNP estimates f o r the years under study: 1900, $1,057,000,000; 1910, $2,235,000,000; 1920, $5,529,000,000; and 1929, $6,134,000,000. Series E214-244, Gross nation a l product, by industry, decennially, 1870 to 1920, and Series El-2, National income and gross nation a l product, by components, 1926 to 1960, H i s t o r i c a l  S t a t i s t i c s of Canada (Cambridge: Cambridge University Press, 1965), pp. 141, 130. 2. Gordon W. Bertram and Michael Percy, "Real Wage Trends i n Canada 1900-26: Some Pr o v i s i o n a l Estimates," Canadian Journal of Economics 12 (May 1979): 299-312. 3. Albert Rees, Real Wages i n Manufacturing 1890-1914, a s s i s t e d by Donald P. Jacobs, A Study of the National Bureau of Economic Research, New York (Princeton: Princeton University Press, 1961) . 4. Of course, Laurier's term of o f f i c e does not quite match my d e f i n i t i o n of his era. He was elected prime minister i n 1896 and was defeated i n 1911. 5. J.A. Hobson, Canada To-day (London: 1906), p. 5 c i t e d i n Michael J . Piva, The Condition of the Working Class i n Toronto — 1900-1921, Cahiers d'Histoire No. 9 (Ottawa: University of Ottawa Press, 1979), p.28. Studies of Hobson's sort seem to abound for both Canada and the smaller region of B r i t i s h Columbia. 6. James S. Woodsworth, Strangers Within Our Gates, or Coming Canadians (Toronto: University of Toronto Press, 1972), p. 134. 7. Idem, On the Waterfront (Ottawa: Mutual Press, 1918), p. 10. 8. Net national income i s derived by subtracting from gross nation a l product depreciation allowances and s i m i l a r business costs and i n d i r e c t taxes less subsidies. O.J. Firestone, Canada's Economic Development, 1867-1953: With  Special Reference To Changes i n the Country's National Product and National  Wealth, Income and Wealth Series, No. 7 (London: Bowes & Bowes, 1958), pp. 171, 317. 9. I b i d , p. 173. 10. H.D. Woods and S y l v i a Ostry, Labour P o l i c y and Labour Economics i n Canada (Toronto: MacMillan, 1962), p. 211. 11. Ibid , pp. 209-10. 12. William L. Marr and Donald G. Paterson, Canada: An Economic History (Toronto: MacMillan, 1980), pp. 178-9. 19 13. Piva calculates a d e c l i n i n g r e a l wage index f o r construction and manufactu-rin g workers, two classes of workers i n the p r i n t i n g trades, street railway motormen and conductors, and factory c r a f t workers. Piva, pp. 48, 52, 54, 55. 14. Terry Copp, The Anatomy of Poverty: The Condition of the Working Class i n  Montreal. 1897-1929 (Toronto: McClelland and Stewart, 1974) pp. 31-2, 43. 15. Piva, p. 38. According to the Department of Labour t h e i r budget only covered some 70% of family expenditures. Piva and Copp increased the cost of the Departments appropriately to r e f l e c t t h i s . 16. Copp, p. 43; Piva, pp. 4,5. 17. B r i t i s h Columbia, P r o v i n c i a l Bureau of Information, Manual of P r o v i n c i a l  Information: Province of B r i t i s h Columbia, 1930, pp. 103, 117, 126. 18. I b i d , p. 145. 19. Canada, Department of Trade and Commerce, F i f t h Census of Canada, 1911:  Areas and Population by Provinces, D i s t r i c t s and School D i s t r i c t s , 1:527; Sixth Census of Canada, 1921: Population, Number, Sex and D i s t r i b u t i o n —  Racial O r i g i n s — R e l i g i o n , 1:221; Canada, Department of Trade and Commerce, Dominion Bureau of S t a t i s t i c s , Seventh Census of Canada, 1931: P o p u l a t i o n —  Local Subdivisions, 2:7. The 1931 population f i g u r e r e f l e c t s the 1929 incorporation of Point Grey and South Vancouver. The population of Vancouver i n 1928 was 142,262. Vancouver, Annual Report, 1941, p. 63. 20. F i f t h Census of Canada, 1911: Religious, Origins, B i r t h p l a c e , C i t i z e n s h i p ,  Literacy and I n f i r m i t i e s , by Province, D i s t r i c t s and S u b - d i s t r i c t s , 2:427. 21. Calculated from F i f t h Census of Canada, 1911: Areas and Population by  Provinces, D i s t r i c t s and School D i s t r i c t s , 1:174; and from Canada, Department of Trade and Commerce, Dominion Bureau of S t a t i s t i c s , Eighth Census of Canada, 1941: Ages of the Population, 3:8-9. 22. "Lots of Work i n Vancouver," B r i t i s h Columbia Magazine, August 1911, pp. 811-2. 23. Cited i n The Labour Gazette 9 (Nov. 1908) :467. 24. Marr and Paterson, p. 448. 25. These were Hobsbawm's d e f i n i t i o n s . E.J. Hobsbawm and R.M. Hartwell, "The Standard of L i v i n g during the I n d u s t r i a l Revolution: A Discussion," Economic History Review 16 (1963):119-46; Hartwell, "The Standard of L i v i n g Controversy: A Summary" i n R.M. Hartwell, The I n d u s t r i a l Revolution, N u f f i e l d College Studies i n Economic History (Oxford: B a s i l Blackwell, 1970), p. 172. 26. S i l b e r l i n g ' s index was published i n N.J. S i l b e r l i n g , B r i t i s h Prices and  Business Cycles, 1779-1850 (Supplement to the Review of Economic S t a t i s -t i c s , 1923), c i t e d i n J.H. Clapham, An Economic History of Modern B r i t a i n , v o l . 1: The Early Railway Ages 1820-1850 (Cambridge: Cambridge University Press, 1950), p. 128. 20 27. Arthur B. Gayer, W.W. Rostow and Anna Jacobsen Schwartz, The Growth and  Fluctuation of the B r i t i s h Economy 1790-1850. An H i s t o r i c a l , S t a t i s t i c a l  and Theoretical Study of B r i t a i n ' s Economic Development, V o l . 2 (Oxford Clarendon Press, 1953, pp. 461-7. 28. See Rufus S. Tucker, "Real Wages of Artisan i n London, 1729-1935," Journal of the American S t a t i s t i c a l Association 31 (March 1936): 73-84. 29. Arthur L. Bowley, Wages i n the United Kingdom i n the Nineteenth Century. Notes for the Use of Students of S o c i a l and Economic Questions (Cambridge: Cambridge Uni v e r s i t y Press, 1900; reprinted ed., C l i f t o n , New Jersey: Augustus M. Kel l e y , 1972); and G.H. Wood, "The Course of Average Wages Between 1790 and 1860," The Economic Journal 9 (1899): 588-602. 30. P h y l l i s Deane and W.A. Cole, B r i t i s h Economic Growth 1688-1959: Trends  and Structure (Cambridge: Cambridge University Press, 1962), p.23. 31. I b i d , pp. 25-6. 32. Hobsbawm and Hartwell, "The Standard of Liv i n g during the I n d u s t r i a l Revolution," p. 121. 33. Hartwell, "The Standard of L i v i n g Controversy," pp. 172-3. 34. Idem, "Interpretations of the. I n d u s t r i a l Revolution i n England: A Metho-do l o g i c a l Inquiry," Journal of Economic History 19 (June 1959): 244-9; Idem, "The Rising Standard of L i v i n g i n England, 1800-1850," Economic  History Review 13 (1961):398. 35. S. P o l l a r d , "Investment, Consumption and the I n d u s t r i a l Revolution," Economic History Review 11 (Dec. 1958):215-6. 36. Hobsbawm, "The B r i t i s h Standard of L i v i n g , 1790-1850" i n Hobsbawm, Labouring Men: Studies i n the History of Labour (New York: Basic Books, 1964) , p. 64. 37. Hartwell, "The Rising Standard of L i v i n g , " p. 400. To Pollard's c r i t i c i s m that t h i s market lay outside B r i t a i n and, hence, that the benefits of indus-t r i a l i z a t i o n were being exported, Hartwell r e t o r t e d that production figures showed that the bulk of production was destined f o r domestic markets. 38. Hobsbawm, "The B r i t i s h Standard of L i v i n g , " p. 87. He argued that the decline i n milk'consumption was the r e s u l t of population movements from country to town. Consequently, working class members di d not have the space f o r tending cows. 39. Ibid, p. 84. 40. Hobsbawm and Hartwell, p. 140. 41. Hobsbawm, "The B r i t i s h Standard of L i v i n g , " p. 87. 21 42. Hobsbawm and Hartwell, p. 140. 43. See above note 34. 44. Hartwell, "The Rising Standard of L i v i n g , " p. 415. 45. Hobsbawm, "The B r i t i s h Standard of L i v i n g , " p. 64. 46. Hartwell, "The Rising Standard of L i v i n g , " p. 413. 47. Hobsbawm and Hartwell, p. 131. Some years e a r l i e r J.L. Hammond and Barbara Hammond, leading pessimists of the 1910s and 1920s had made a s i m i l a r concession. " S t a t i s t i c i a n s t e l l us that when they have put i n order such data as they can f i n d , they are s a t i s f i e d that earnings increas-. ; , , sed and that most men and women were l e s s poor when t h i s discontent was loud and active than they were when the eighteenth century was beginning to grow old i n s i l e n c e l i k e that of the autumn. The evidence, of course, i s scanty, and i t s i n t e r p r e t a t i o n not too simple, but t h i s general view i s probably more or less c o rrect." The Hammonds s t i l l b e lieved, however, that at the same time as material improvement there was a decline of working class well-being of a less tangible, more s p i r i t u a l s o r t . J.L. and Barbara. Hammond, The Bleak Age (1934; rev. ed., London: Pelican Books, 1947), p. 15. 22 CHAPTER 2 The Construction of a Real Wage Index I t seems possible to measure working class standards of l i v i n g i n Vancouver on a money basis . For the most part, working people i n the c i t y received a mo-ney income with which they purchased many of the commodities which influenced t h e i r standard of l i v i n g . One measure of the l i v i n g standards of people who l i v e by earning and spending money i s the r e a l wage, since t h i s measures the true value or the purchasing power of t h e i r earnings. As an economic concept the r e a l wage i s simple. E s s e n t i a l l y i t compares wages to the expenditures necessary i n order to ascertain the cost of l i v i n g at any point i n time. Has the income of an i n d i v i d u a l or group increased more, as much as or less than l i v i n g costs? When cash incomes increase more than the cost of l i v i n g r e a l wages also increase. I f the cost of l i v i n g has increased as much as money wages then r e a l wages remain the same, and i f the cost of l i v i n g has exceeded t h e i r cash income r e a l wages have decreased. To say that r e a l wages increase, decrease or remain the same does not state a l l there i s to know about standards of l i v i n g . Inasmuch as people buy t h e i r standard of l i v i n g , the r e a l wage measures t h e i r a b i l i t y to continue to purchase what t h e i r purchases have been known to be at one time. The r e a l wage i s , there-fo r e , a yardstick of the subject's progress from that p o i n t . But the r e a l wage does not account f o r intangibles which do not fi g u r e i n the expenditures. I t does not measure whether the yardstick to begin,with i s adequate. And r e a l wage estimates of one subject cannot be compared e a s i l y with those of other people i n the same society so as to measure s o c i a l i n e q u a l i t y or r e l a t i v e d e p r i -vation. Even when used for the s i n g l e purpose of measuring changes i n the sub-j e c t ' s l i v i n g standards, r e a l wage indexes pose d i f f i c u l t i e s i n t h e i r construc-t i o n . A l l the information about wages and pr i c e s that i s wanted i s not always 23 a v a i l a b l e nor i s i t always of the kind wanted. For example, Hobsbawm c r i t i -c i z e d the B r i t i s h r e a l wage estimates because the money wage component was com-pr i s e d of the f u l l - t i m e wages of the b e t t e r - o f f s k i l l e d portions of the working c l a s s . As such, a r e a l wage index calculated from these wages did not take i n t o account the wages of the u n s k i l l e d , the unemployed and those employed on short time.-Economists have an accepted procedure f o r c a l c u l a t i n g r e a l wages. Obvious-l y information about wages and expenditures must be known. Then a f i x e d unit of time must be established. Wages and expenditures can then.be compared on a weekly, monthly, annual or other appropriate bases. Once the time unit i s established, the study may be c a r r i e d out over an i n d e f i n i t e period ( i n the case of t h i s project twenty-nine years). Most r e a l wage studies do not ascertain wages and expenditures for every week or every month i n the period of study. Changes i n wages are of course noted. But i n determining expenditures a short-cut i s taken. The expenditure patterns of the group under study are established,., usually f o r a one year period i n order that seasonal v a r i a t i o n s be taken into account. Estimated weekly budgets can be derived from t h i s by d i v i d i n g by f i f t y - t w o , monthly budgets by d i v i d i n g by twelve. From t h i s information an average cost of l i v i n g budget i s calculated which gives the proportions of incomes generally spent on the d i f f e r e n t items of expenditures. For example. 2% of income may be spent on beef, 20%gbn rent, and 8% on transportation. Once these proportions are known, the cost of l i v i n g f o r the group can be determined for many years a f t e r with r e l a t i v e ease. This method of proportioning expen-ditures does allow some v a r i a t i o n i n expenditures. For example 2% of income i s not always spent on beef but may be spent on a s u b s t i t u t e f o r beef, l i k e chicken. 24 In this way the subjects' practice of substituting a commodity that i s cheaper, or whose price does not increase as much as a more expensive o. item, i s taken into account. Information about the prices of the items known to be purchased can then be obtained on a weekly or monthly basis. And an estimate of the total weekly or monthly cost of living change i s calculated by adding together the prices of a l l the items, each of which i s weighted by the proportion i t occu-pies i n the total cost of living budget. Periodic variations in this budget can then be compared to changes i n wages over the same length of time.^ It i s essential to know the average family expenditure patterns of the group under study because expenditure patterns vary widely among different social groups. Obviously, any average obscures variation within a subject group but i t has the advantage of identifying general characteristics. Income, occu-pation, and ethnicity are major factors in defining boundaries between social groups. The influence of income on expenditure patterns, for example, i s per-haps best known. According to Engel's Law, as income increases the percentage of income spent on subsistence decreases while that for non-essentials increases. Within distinct income, occupational and ethnic groups other differences i n ex-penditure patterns exist which are functions of such factors as the ages of family members, the number of family members, education and personal taste. The significance of number in family and ages of family members, to choose two examples, i s not d i f f i c u l t to grasp. The young family head w i l l have fewer res-ponsibilities i f he just supports a wife than he w i l l have a few years later when he w i l l likely provide for several children as well. As this family head grows even older his responsibilities gradually diminish as his children become independent. The expenditure pattern over this l i f e cycle i s predictable. The proportion expended for necessities increases from the f i r s t to second stage and then decreases as the third stage approaches. Because expenditure patterns vary between different social groups, changes in prices affect these groups differently. Of course, i f a l l prices changed in the same direction and magnitude, then the effect on a l l groups would be the same. Take the following example. A spends 60% of his income on essentials and 40% on non-essentials while B spends 40% and 60% respectively. If the costs of essentials and non-essentials both double, then both A's and B's costs of l i v i n g double proportionately. In most instances, however, prices for different goods change at different rates and often even i n different directions. Therefore, price changes have varied effects on different groups. I f , in the case of the example, the cost of essentials doubles while the cost of non-essentials is un-changed then A's cost of living increases proportionately more since he spends a larger percentage of his income on essentials than does B. Two ways of expressing expenditures are employed in this paper. Both are referred to as systems of weighting. The f i r s t , known as percentage weights, is the one most frequently used. The percentages of income spent on specific commodities are called weights. Thus i f 2% of income is spent on beef, then the weight for beef i s two with a l l weights totalling 100. The second is the Les Peyres system of weighting. In i t the weights are actual units of commo-dities. Thus i f the annual survey shows an average annual beef consumption per family of 520 pounds, then the weekly weight for beef i s ten pounds. In employ-ing percentage weights the prices of commodities are summed in such a way as to give an index number that reflects changes in the cost of l i v i n g . The total cost of l i v i n g using the Les Peyres system i s the cost of purchasing a fixed quantity of goods. One other method of weighting expenditures might have been employed. This is the Paasche system. In i t , expenditure weights are adjusted for each year in 26 the study to reflect changes in consumption patterns. A Paasche weight is used to compile on index number measuring changes in the cost of living. The index number is defined as I 4^-^ -^100 fl P_n_?n V' Pbase year ^n t h where 1^  is the index number in the i v . year, P is the price, Q is the quantity and n is the year of observation. The problem with using a Paasche index in an historical study such as this is that comparisons cannot be made between the cost of living in a base year and its cost in more than one other year. Rather the Paasche index is used to compare the cost of living between two years,a given year and a base year. The differenes in the uses to which these two systems of weights used in this paper can be put are striking. The percentage weight is customarily used in the calculation of an index number defined as follows: I = E JlOO k=l \ (base year)k / ttl where 1^  is the index number in the i year, is the expenditure weight for th the k commodity, and P is the price. In simpler terms this index presents the th sum of the prices of a l l the commodities consumed in the i year divided by their prices in the base year and weighted by their expenditure weights. The index number is always 100 in the base year since the denominator is always set at base year prices. As noted above the advantage of using percentage weights in measuring the cost of living is that substitution can operate. 2% of income does not have to be spent on beef% i t may be spent on a substitute. The chief 27 disadvantage is that in giving an index number, in essence a percentage change from the base year, i t does not provide an actual dollar value of the cost of living. The index only measures changes in the cost of living. In using the Les Peyres weights the above disadvantage is not encountered. The actual cost of a Les Peyres budget is given since commodity quantities are known. By comparing changes in the cost of a particular basket of goods with income changes, the ability of income to purchase items for consumption can be measured. Les Peyres weights have also been used in the calculation of index numbers. A Les Peyres index is calculated as follows: T = [ n xbase year , 1 Q 0 i Q, 1 \ base year base year, ' til where 1^  is the index number in the i year, P is the price, Q is the quantity and n is the year of observation. Essentially such an index divides the cost of the budget in year n by the budget's cost in the base year to show the per-centage change. Although there is an advantage in knowing the percentage changes in the cost of a fixed quantity of goods, an index measuring these has one serious flaw. As Bertram and Percy have noted in their own work on Canadian real wages, the Les Peyres index has the well known fault "that i t does not take into 4 account changes in relative prices nor substitution among commodities." The Les Peyres index assumes consumption of a fixed budget of items month after month, year after year, depending on the length of the study, no matter what price changes occur to the constituent parts. As noted above, prices of dif-ferent goods usually change at different rates and sometimes in different di-rections. Consumers react to this. If, for example, the price of beef falls then they can purchase more with the same proportion of income. In this way 28 consumers take advantage of r e l a t i v e p r i c e changes. On the other hand, i f the pr i c e of beef r i s e s consumers may sub s t i t u t e a cheaper good, f or example, chicken, f o r the same proportion of income. Substit u t i o n i s impossible to account f o r i n a Les Peyres budget where quantities of items are f i x e d . Thus the process of s u b s t i t u t i o n undermines the v a l i d i t y of the Les Peyres weights. Because a percentage-weighted index does make allowance f o r changes i n r e l a t i v e p rices and su b s t i t u t i o n i t would seem a more r e l i a b l e i n d i c a t o r over time of costs of l i v i n g influenced by s h i f t s i n consumption. But the Les Peyres index i s useful i n that i t gives a d o l l a r estimate of how much a p a r t i c u l a r s o c i a l group might spend to l i v e . Certainly, there i s reason to r e f e r to both indexes i n a study of r e a l wages. U n t i l recently no r e a l wage index existed f or Vancouver during the period 1901 to 1929. In 1977, however, Bertram and Percy constructed a r e a l wage i n -dex for construction workers during the period of 1900 to 1926."* This index employed published Dominion Department of Labour wage and p r i c e data. The con-s t r u c t i o n index was part of Bertram's and Percy's l a r g e r work on a new n a t i o n a l r e a l wage index to be constructed from the e x i s t i n g Department of Labour n a t i o -n a l wage and p r i c e indexes. Like the e x i s t i n g r e a l wage indexes, Bertram's and Percy's n a t i o n a l r e a l wage index was not composed of separate regional or c i t y r e a l wage indexes. While they compiled c i t y p r i c e indexes, they only compiled nation a l wage indexes from n a t i o n a l average wages. Any information used i n the construction of a r e a l wage index must meet two c r i t e r i a : continuity and consistency. Continuous wage data measures regu-l a r observations of wages over the en t i r e period. Consistent wage data means uniform as to period of payment. This can be wages per hour or per week with information about hours i n a week and weeks i n a year usually worked, or t h i s can be an actu a l yearly sum earned. Of the various sources of wage evidence a v a i l a b l e f o r Vancouver during the early twentieth century only Department of Labour data met these two requirements.^ The other wage data that was a v a i l -able f o r Vancouver i n the period under consideration, p r i m a r i l y B r i t i s h Colum-b i a Department of Labour wage surveys, the 1911 and 1921 Canada Census data on yearly earnings, and wage data contained i n the 1915 Report of the Board of Inquiry i n t o the Cost of L i v i n g , was not used i n the construction of the r e a l wage index.'' However i t w i l l be useful to examine t h i s information because i t provides checks on the data used i n the wage index. In 1921 the Dominion Department of Labour published Wages and Hours of  Labour i n Canada. This contained yearly observations from 1901 to 1920 of wages paid per hour and hours worked i n several i n d u s t r i a l categories. I t should not be assumed, however, that t h i s data was without flaws. In the f i r s t place i t only permitted the c a l c u l a t i o n of standard wages, that i s , the amount earned at the standard rate f o r standard hours. As Bertram and Percy have noted the data's use i s thus l i m i t e d : While u s e f u l as an index of the secular trend of money wage income, t h i s measure may ser i o u s l y mis-represent weekly earnings at any point i n time. In periodssof excess demand f o r labour, f o r example, employees might w e l l work overtime at premium rates ... Conversely, f u l l - t i m e weekly earnings would over- g estimate actual earnings during periods of recession. Unfortunately, yearly earnings data, such as are av a i l a b l e for manufacturing 9 wage earners i n the United States, was not a v a i l a b l e f o r Canada. In addition Wages and Hours of Labour i n Canada included only the wages of s k i l l e d , orga-nized workers. The u n s k i l l e d labourer was l a r g e l y unrepresented, construction 30 labourers excepted. This bias i n the Department's evidence was a function of i t s c o l l e c t i o n . The Department had a v a i l a b l e to i t various trade union r e -ports, c o l l e c t i v e agreements on f i l e and f a i r wage schedules i n government contracts. These flaws cannot - be e n t i r e l y resolved. Because accurate unem-ployment data does not e x i s t f o r t h i s period, the impact of economic expansion and recession cannot be incorporated i n t o any r e a l wage index. Also, only i s o l a t e d observations of wages made by wages earners other than the s k i l l e d and organized were made and, therefore, they cannot be incorporated i n t o the wage index. Thus a wage index compiled on the basis of the Dominion Department of Labour information must be examined i n l i g h t of the known reservations to i t . The other wage information was less useful than that of the Department of Labour f o r s e v e r a l reasons. The 1921 Canada Census recorded the earnings of wage earners i n a l l the major c i t i e s i n Canada f o r 1921. E a r l i e r wages for;? ei t h e r the c i t i e s or the provinces are not a v a i l a b l e i n the published Census although R.M. Mclnnis has compiled 1911 wage data f o r the provinces from the manuscript census. Estimates of Vancouver wages f o r each of the years between 1921 and 1931 could be constructed by apportioning the change i n wages equally over the intervening ten years. A s i m i l a r c a l c u l a t i o n of B r i t i s h Columbia wages was p o s s i b l e for the years between 1911 and 1931 using Mclnnis' data. Of course, p r o v i n c i a l wages could only serve as an approximation of Vancouver wages. No equation of e i t h e r p r o v i n c i a l or c i t y wages was possible for the years p r i o r to 1911 because comparable data was unavailable i n the published and manuscript 1901 Censuses. The creation of such a r t i f i c a l wages, even i f Vancouver information were a v a i l a b l e f o r 1901 and 1911 i n a d d i t i o n to 1921 and 1931, has i t s drawback, namely, that actual yearly f l u c t u a t i o n s could be ob-scured and d i s t o r t e d . And perusal of the year to year observation i n Wages and 3.1 Hours of Labour i n Canada suggested that there were yearly f l u c t u a t i o n s . For example, i f estimates of 1922 to 1929 wages were going to be approximated from the 1921 and 1931 Census the change i n wages between the two years would have to be equally apportioned over the intervening decade. Since 1921 wages, accord-ing to the Census, were higher than 1931 wages the estimated wages f o r the 1920s would show a gradual decline. But the 1931 Census was taken w e l l a f t e r Canada had entered the Great Depression. Consequently, while 1931 wages were lower than 1921 wages, the wage trend over the intervening years was not one of con-stant d e c l i n e . But while i t could not be used to e s t a b l i s h wage trends the Census data served as a check on the Department of Labour information for 1911 and 1921. Moreover, since the Census provided the most comprehensive survey of wage earners a v a i l a b l e f o r those years, i t considered wage earners whom the Department of Labour did not survey. The B r i t i s h Columbia Department of Labour was not formed u n t i l 1918, and as a r e s u l t information from t h i s source was only a v a i l a b l e f or the l a t t e r h a l f of the period under study. The usefulness of the p r o v i n c i a l department's data was further l i m i t e d by the f a c t that no separate s t a t i s t i c s f o r Vancouver were given. The Department obtained i t s data by sending questionnaires to a l l known employers i n the province. Employers were required by law to respond, but the penalty for non-compliance was a small f i n e , one which the Department was r e l u c -tant to levy."^ Thus the l e v e l of response between 1918 and 1929 was low. In 1921 returns were received f o r a t o t a l of 50,485 wage e a r n e r s . ^ The 1921 12 Census showed 163,283 wage earners i n the province. The l e v e l of response 13 had increased to 110,521 i n 1931. The 1931 Census reported 235,066 wage ear-14 ners i n the province. Therefore, the response f a c t o r had increased from 31% 15 to 47% of the a c t u a l wage earner force. In early annual reports the Department 32 chastised employers f o r not returning t h e i r questionnaires, but eventually the Department consoled i t s e l f that at le a s t the "major" employers responded. The Department's surveys asked four sets of questions. The employer was requested to give the average number of male and female wage earners employed i n each month, wage earners' n a t i o n a l i t i e s , hours of labour and weekly wage 16 rates f o r the "week of employment of greatest number." The wage data ob-tained i n the fourth catagory was the le a s t r e l i a b l e of a l l information obtained because of the s t a t i s t i c a l l y unorthodox manner of securing and compiling the data. The Department d i d not request "exact figures regarding i n d i v i d u a l rates of pay" because i t d i d not wish to intrude upon employers' pri v a c y . The Depart-ment ant i c i p a t e d that employers would have refused to respond to requests f o r information i f such questions about t h e i r operations were asked. Employers might fear the leaking of c o n f i d e n t i a l questionnaires to competitors or employ-ees."^ The Department asked employers to segregate the wage earners " i n the week of greatest employment" i n t o various weekly wage catagories. The lowest one was $5.00 or l e s s , the highest $50.00 or more, and the intervening catago-r i e s had i n t e r v a l s of $1.00 up to $29.99 a week and of $5.00 from $30.00 to $49.99 a week. Needless to say, these catagories were not constructed i n a manner i d e a l f o r the purposes of obtaining a mean or median. Nevertheless the Department did construct "average weekly wages" f o r males from t h i s data. The Minimum Wage Board i n appendices to the Department's annual reports provided s i m i l a r l y constructed averages f o r women wage earners. For the purposes of making an average the Department assumed that: where steps of $1 were given i n the t a b l e , that "$25 to $25.99", f o r example meant $25.50, and where steps of $5 were given, that "$30 to $34.99", f o r example, meant $32. As these assumptions may perhaps be c r i t i c i z e d as e r r i n g a l i t t l e on the side of generosity, "$50 or over" has been taken i n a l l cases to mean "50 only". 18 3 3 Because wages f o r the week of highest employment were requested, the wage data over-estimated a c t u a l wages. I t was impossible to know how the methods of the Department further d i s t o r t e d the actual wage p i c t u r e . The o r i g i n a l questionnaires could not be examined because they appear to have been destroyed. Consequently, t h i s survey of B r i t i s h Columbia wages could only function as a check on other data i n t h i s paper. Only two other sources of wage data were found that could be used i n t h i s paper. The Report of the Board of Inquiry into Cost of L i v i n g was a d i s -appointment. This federal commission was formed i n 1913 i n response to trade union and public pressure f o r an i n v e s t i g a t i o n of the causes of the high cost of l i v i n g . The report gave Vancouver wage data f o r wage earners i n the con-s t r u c t i o n , metal and transportation i n d u s t r i e s , and i n municipal government and domestic service from 1900 to 1913. Evidence f o r the f i r s t three indus-t r i e s l a r g e l y duplicated that found i n Department of Labour records. Some i n -formation was given f o r wage earners i n these three i n d u s t r i e s that was not a v a i l a b l e from the Department of Labour. However, i t proved impossible to f i n d post-1913 data with which to l i n k t h i s . Policemen were the only municipal employees f o r whom wage data was given. And the wages of domestic servants 19 given were, by the Board's own admission, suspect. The manuscript records of the B r i t i s h Columbia Commission on Labour contained a broad survey of wages 20 earned i n Vancouver between 1912 and 1914. This p r o v i n c i a l commission had been created by the l e g i s l a t u r e in: 1912 to inve s t i g a t e i n t o a broad range of subjects a f f e c t i n g labour and c a p i t a l i n the province. Since t h i s information only gave observations for three years at the most, i t was unsuitable f o r the wage index. I t t too, served as a useful check on the index. The survey i s given here i n Appendix 1. 34 Once the Dominion Department of Labour's wage information had been s e l e c -ted, the steps needed to compile a money wage index were few and r e l a t i v e l y simple. Weekly wages for i n d i v i d u a l occupations have been calculated from the wages paid per hour and the hours worked i n a week. The weekly wages for each occupation were then indexed, converted i n t o a number i n d i c a t i n g change i n mag-nitude from a base year. These i n d i v i d u a l occupation indexes were then combi-ned together to form industry indexes; and these were then grouped to form an a l l i n d u s t r i e s index. An i n d i v i d u a l occupation was combined with other indexes into an industry index by weighting i t according to the percentage of employ-ment i t accounted f o r i n the industry. S i m i l a r l y one industry index was grouped with other industry indexes by weighting i t according to the percentage of em-ployment i t accounted f o r of a l l employment. Both the weights for the i n d i v i -dual industry indexes and the a l l industry index were obtained from Census r e -po r t s . Like the wage information used i n the c o n s t r u c t i o n of a r e a l wage index, p r i c e information must meet the same c r i t e r i a of c o n t i n u i t y and consistency. A Vancouver p r i c e index can quickly be constructed f o r the period 1901 to 1929 from the e x i s t i n g Department of L a b o u r p r i c e data and Les Peyres weights em-ployed by them. Bertram and Percy have, however, suggested revisions to the Department's method of weighting i n the construction of t h e i r new n a t i o n a l p r i c e indexes. A simple shortcut would have been to use the Vancouver p r i c e index contained i n t h e i r work. However, t h e i r Vancouver p r i c e index needs cer-t a i n r e v i s i o n s . These w i l l be d i s c u s s e d i n the next chapter. 35 In February of 1910 the Department of Labour began publishing a monthly p r i c e survey of twenty-eight food items, laundry starch, two types each of coalyand wood and the cost of renting a " t y p i c a l six-roomed dwelling with 21 sanitary conveniences i n a working class s e c t i o n . " This was a l i s t of prices only and was not combined to form a cost of l i v i n g budget or index. The p r i c e s were secured on or about the f i f t e e n t h of each month (probably one week e a r l i e r i n B r i t i s h Columbia) by l o c a l correspondents i n each of the 22 f i f t y - s e v e n Canadian c i t i e s with a population over 10,000. Over the next decade the l i s t of items f o r which p r i c e s were c o l l e c t e d was augmented so that by March of 1920 the l i s t stood at more than 100. In October of 1922 t h i s l i s t was reduced somewhat "owing to the i m p o s s i b i l i t y of securing p r i c e s f o r the / s e v e r a l / grades of /goods now contained i n the l i s t / from the various 23 c i t i e s from month to month." Evidently the Department did not f e e l equipped, i n 1910, to begin c a l c u -l a t i n g a p r i c e index that adequately represented n a t i o n a l p r i c e trends. In 1904 when R.H. Coats, Assistant E d i t o r of The Labour Gazette, began the plan-ning of s u i t a b l e p r i c e c o l l e c t i o n and p u b l i c a t i o n with Deputy-Minister W.L. Mackenzie King, Coats set two aims, the regular p u b l i c a t i o n of a p r i c e survey, and the construction of a p r i c e index based on a survey of the expend!-2 A ture patterns of Canadian workingmen's f a m i l i e s . For reasons unknown the p u b l i c a t i o n of a regular p r i c e survey was delayed u n t i l 1910. But as early as July 1907 Coats suggested postponing h i s ambitious plans for<-> an expenditure 25 survey i n the i n t e r e s t of accurate p r i c e c o l l e c t i o n . Although the Department strove f o r accuracy i n p r i c e c o l l e c t i o n i t was not always successful as w i l l be shown below. On the surface, though, i t seemed to be following rigorous procedures. The Department drew up a l i s t of 36 commodities, and forms printed with i t were forwarded to the l o c a l Department of Labour correspondents to complete each month. The February 1910 Labour  Gazette elaborated on t h i s procedure: The exact q u a l i t y f o r which the quotation i s given i s set f o r t h i n the case of each commodity and every care has been taken to ensure that quotations i n each case r e f e r to exactly the same class of commodity, i n order that.the s t a t i s t i c s may be a v a i l -able f o r purposes of comparison.26 Once received from the correspondents by the Department, the prices were checked, "an explanation being required from the correspondent f o r every v a r i a -t i o n as compared with the preceding month and f o r every stationary p r i c e of 27 over three months standing." Coats was confident, p u b l i c l y at l e a s t , that the p r i c e data was accurate f o r each l o c a l i t y although he thought that the 28 quotations for the various l o c a l i t i e s were not absolutely comparable. In i t s 1911 annual report the Department t e s t i f i e d that i t hoped soon to pub l i s h a r e t a i l p r i c e index weighted by Canadian workingmen's expenditure patterns. While recognizing the d i f f i c u l t y of obtaining the weights i n a country as diverse i n i t s conditions of l i f e as Canada, the Department proposed 29 to undertake such a study " i n due course." Members of the Department may have 30 accepted p r i v a t e l y that "due course" was i n the very distant future. Mean-while, the p r i c e s obtained were averaged each year and published i n appendexes to the Department's annual review of wholesale p r i c e s . In July of 1915 the Department published i t s f i r s t "family budget" i n The  Labour Gazette. I t was l i k e the f i r s t p r i c e survey i n that the family budget contained the same twenty-eight food items, laundry starch, two types of wood and c o a l , and the rent of a six-roomed house i n a t y p i c a l workingmen's d i s t r i c t . However, the family budget s p e c i f i e d quantities of these goods, f o r example, two 37 pounds of s i r l o i n steak and two pounds of chuck roast, and calculated the t o t a l cost of a l l these quantities of commodities. The Gazette' did not reveal the o r i g i n of the budget although i t issued a statement that would read l i k e a motto beneath family budgets published i n subsequent i s s u e s : "the quantities i n d i c a t e d are s l i g h t modifications of those employed i n s i m i l a r c a l c u l a t i o n s made by various bodies." The Gazette described the family budget as "the t y p i -c a l weekly expenditures on staple foods, f u e l , l i g h t i n g and rentals f o r a fami-l y of f i v e " whose annual income between 1910 and 1914 was $800. However, the 31 j o u r n a l did not specify how the Department had a r r i v e d at these f i g u r e s . A few years l a t e r , i n a January 1922 a r t i c l e i n The Labour Gazette, the Depart-ment elaborated on the family budget's func t i o n . The Department denied that the budget could i n any way be construed as a "subsistence" budget; i f anything, the Department continued, the quantities adopted afforded "a l i b e r a l supply for the healthy family of a man at hard p h y s i c a l work." And the budget's primary function was "to show the increase or decrease from time to time i n the cost of 32 the items included." For a long time scholars have suspected that the family budget was based upon an expenditure survey undertaken by the American Bureau of Labor S t a t i s t i c s 33 i n 1901. This was a comprehensive survey of 25,440 white wage earners and t h e i r f a m i l i e s whose average family s i z e was close to f i v e members. The survey covered the various occupations i n the p r i n c i p a l i n d u s t r i a l areas of t h i r t y - t h r e e s t a t e s . In h i s comparison of American and Canadian costs of l i v i n g , "Labour Costs and Labour Standards," H.A. Logan stated that the Canadian budget was "based upon the American study of 1901 with c e r t a i n allowances judged s u i t a b l e 34 to b r i n g i t i n t o c l o s e r r e l a t i o n to the Canadian scene." Logan did not, however, c i t e authority f o r h i s claim. Bertram and Percy noted that v i s u a l i n -38 spection of the American study and the Canadian family budget supported t h i s 35 p r o p o s i t i o n . I t i s unknown why the Department did not include a c l e a r s t a t e -ment of the family budget's o r i g i n i n i t s monthly reviews of p r i c e s . Such con-fe s s i o n s , though, were not completely absent from The Labour Gazette. In a March 1919 a r t i c l e the following statement was made: In determining the quantity of each commodity to be used i n making allowance for the importance of each commodity i n average family consumption, no comprehensive s t a t i s t i c s as to consumption or expenditure i n Canada were a v a i l a b l e . There were at hand, however, dietary studies c a r r i e d out by a u t h o r i t i e s on health and l i v i n g conditions, the r e -s u l t s of an i n v e s t i g a t i o n i n t o consumption and expenditure i n workingmen's f a m i l i e s i n the United States i n 1901, made by the United States Bureau of Labour S t a t i s t i c s , and published i n i t s annual report f o r 1901, and l o c a l i n v estigations made by other a u t h o r i t i e s . From the information a v a i l a b l e as to l i v i n g conditions i n Canada, and from these s t a t i s t i c s , allowing f o r c e r t a i n w e l l known differences between Canada and the United States i n customs ... a budget of the foods f o r which p r i c e s were av a i l a b l e was drawn up on the basis of a week's supply f o r a family of f i v e , man, wife and three children at average ages. To the food budget were added figures f o r the rent of a house with sanitary conveniences and an "approximate average" of coal and wood pr i c e s " f o r the 36 whole Dominion." Records of the discussions that took place within the De-37 partment i n 1907 also confirm the American o r i g i n 'of the family budget. The process of a l t e r i n g the American budget to r e f l e c t Canadian conditions was rather unsophisticated i n method and often r e s u l t e d from inadequacies i n the Department's p r i c e c o l l e c t i o n . The 1919 a r t i c l e mentioned above described the process. "Well known di f f e r e n c e s " i n Canadian and American consumption of coffee, tea, pork, beef, poultry and cheese were allowed f o r . The American budget included f i s h , but since "no s t a t i s t i c s of p r i c e s of f i s h a v a i l a b l e 39 were regarded as s u f f i c i e n t l y representative to be averaged" the commodity was omitted from the Canadian budget. S i m i l a r l y , there were no s a t i s f a c t o r y s t a t i s t i c s of prices of vegetables, except potatoes and dry beans, nor of any f r u i t , except evaporated apples and prunes. I t was considered that the omissions from the budget of c e r t a i n a r t i c l e s could be best allowed f o r by i n -creasing somewhat the quantities of a r t i c l e s which would most nearly r e f l e c t the changes i n cost i n the commodities omitted. For instance, more meats tend to be used where f i s h are not r e a d i l y y a v a i l a b l e and cheap; prunes and eva-porated apples are i n common use i n the p r a i r i e s where fresh fruits are scarce, and p r i c e s of potatoes change more or less i n proportion to the changes i n other vegetables. In the Department of Labour budget, therefore, the estimated quan-t i t i e s of potatoes, prunes, evaporated apples, r i c e , beans, f l o u r , oatmeal, sugar, l a r d and meats have been put at a somewhat high fi g u r e i n order to make up f o r the absence of s i m i l a r a r t i c l e s . 3 8 This s u b s t i t u t i o n was unfortunate. For example, potatoes, dry beans and dried f r u i t experienced considerable i n f l a t i o n during World War I which was 39 above that experienced by fresh f r u i t and vegetables. But without an actual survey of the expenditure patterns of Canadian workingmen's f a m i l i e s , no evalu-ation of the correctness of a l l these a l t e r a t i o n s could be made. Although the purpose of the family budget was to measure cost of l i v i n g changes a f f e c t i n g workingmen, i t was frequently assumed that t h i s was not a l l that i t measured. As noted above the Department of Labour f e l t c a l l e d upon to deny that the budget represented a "subsistence" standard of l i v i n g . Indeed i t described the budget as a f f o r d i n g a " l i b e r a l supply" f o r a family of f i v e . The Department reacted t h i s way because the budget was often viewed as not t r u l y measuring the cost of l i v i n g i n Canada. Vancouver Island coal miners, whose wages i n the l a t e 1910s and early 1920s were adjusted according to changes i n the cost of the family budget, complained that i t measured "mere subsistence" 40 since no allowance was made for clothing or any extras. On the other hand the Department apologized f o r the i n c l u s i o n of only good cuts of meat and the generous supply of dairy products, and the absence of fr e s h f r u i t s and 41 vegetables. The Department had done t h i s to make up f o r shortcuts taken i n p r i c e c o l l e c t i o n and to compensate f o r using an American budget to measure Canadian l i v i n g standards. Clearly the Department f e l t constrained i n i t s attempts to measure the cost of l i v i n g because i t d i d not possess a survey of a c t u a l Canadian workingmen's family expenditures. There were other problems with the construction and use of the family budget, many of which the Department understood, and a few which only l a t e r commentators recognized. One major d i f f i c u l t y was obtaining r e l i a b l e p r i c e information f o r the monthly cost of l i v i n g a r t i c l e s published i n The Labours  Gazette. The blame f o r the problem f e l l squarely on the shoulders of the part-time correspondents to the Gazette whose duty, among others, was to sup-ply the monthly p r i c e s . Behind i t s p u b l i c mask of p r i c e accuracy the Depart-ment h i d imprecision. In a 1918 memo to the Minister and Deputy-Minister of Labour, Coats, by then Chief S t a t i s t i c i a n i n the Department, complained that the labour correspondents were "quite untrained i n s t a t i s t i c a l p r a c t i c e " and as part(to±me workers gave "at the best such service as may be expected when the Department's work i s not t h e i r chief i n t e r e s t . " The correspondents were f r e -quently tardy i n reporting to the Department which r e s u l t e d i n delays i n the 42 Gazette's p u b l i c a t i o n . Coats also suspected the correspondents of not follow-ing established procedure i n p r i c e c o l l e c t i o n . I n s t r u c t i o n l e t t e r s to the correspondents t o l d them to obtain cash prices f o r "delivered goods as quoted by representative r e t a i l establishments which do a considerable trade with  workingmen." Since i t was not the Department's p r a c t i c e to send o f f i c e r s into the f i e l d to check the correspondents' work, Coats' suspicions could 41 neither be confirmed nor dismissed. Coats was certain that errors existed in ascertaining house rents. In 1918 he observed that "the figure presented in the Labour Gazette i s really only what the correspondent thinks the average rental i s . " At one time the correspondents may also have been instructed to take shortcuts. In a 1909 draft of the instruction letter to be sent to cor-respondents Coats had said: In collecting this information i t would best meet the requirements of the Department i f you were to note the prices paid in your own home or boarding house for the different art ic les named. Other© wise the price quoted in a representative r e t a i l establishment whose trade i s with a l l classes of the community should beosent i n . ^ An attempt to improve the quality of the price collection was made in 1921 when arrangements were made for the DBS to collect prices which would be averaged • - 4 5 with those collected by the Department's correspondents. The Department also recognized problems with the way the family budget was put together. When f i r s t published in 1915 i t had no clothing component. Regarding fue l , Coats noted that no allowance was made "for the difference in 46 the quantity of fuel used in the different l o c a l i t i e s . " A rect i f icat ion of these problems was attempted in 1921 when the Department secured, from the DBS, indexes of average national prices of gas, e lec t r i c i t y , clothing and sundries back to 1913. A l l these figures were combined with existing food and rent data 47 in a price index f i r s t published in 1921. There was one f i n a l error contained in the family budget which, surprising-l y , the Department and Coats did not see. As Bertram and Percy pointed out, in basing i t s budget on the American 1901 study the Department adopted "many of the commodities of the 1901 study, /but/ did not adopt any of the expenditure 48 weights derived Thus the family-budget employed Les Peyres weights in that the weights were the quantities consumed in the base year. As noted above, an index constructed using these weights does not give an accurate reflection of cost of living changes since i t does not take into account relative prices nor the principle of substitution. The Les Peyres budget may s t i l l be useful for giving a dollar estimate of how much a particular group of people might spend to l i v e , something a percentage-weighted index cannot do. But the Department of Labour Les Peyres budget did not even do this since i t did not include quantities for clothing or sundries. Why was the Department concerned about the inadequacies of their price collection? The Department, and Coats in particular, considered the family budget to be an important tool: in the hands of arbitrators of industrial disputes the family budget could offer the f i n a l word on what workingmen 49 needed to be paid. As such i t could be an instrument of industrial peace. The attachment of such powers to a cost of living budget was not unique to the Canadian Department of Labour. The American Bureau of Labor and other labour investigators did the same. It i s worthwhile considering this use of cost of living budgets because various conceptual problems are unearthed in using them to indicate adequacy of incomes. These conceptual problems apply to the Department's use of the family budget and the use of cost of living budgets by other scholars. The most interesting fact that emerged from the comparison made here of the studies conducted in the early twentieth century was that two types of budget were compiled which gave ideal workingmen's consumption patterns as opposed to measuring actual ones. These sociological and quantity budgets re-flected the attempts of contemporary observers to go beyond merely-=measuring 43 whether the cost of l i v i n g increased. They were used to determine how f a r working class incomes f e l l below what was needed to l i v e . " ^ The term s o c i o l o -g i c a l budget applied to the budgets derived by Booth and Rowntree from t h e i r studies of London and by Chapin from h i s study of New York City."'*' Their bud-gets established as an i d e a l the cost of the budget of the "better c l a s s of workingmen's f a m i l i e s " and measured how f a r short of t h i s d o l l a r value the incomes of other workers f e l l . Quantity budgets had wider a p p l i c a t i o n . They established the quantities of various consumption a r t i c l e s working-class fami-l i e s needed to maintain various standards of well-being, f o r example poverty, 52 subsistence, subsistence plus health and decency, and comfort. Since the scope of the s o c i o l o g i c a l budgets was confined to p a r t i c u l a r c i t i e s , the d i s -cussion i n the next few pages would be spent more p r o f i t a b l y examining quanti-53 ty budgets than s o c i o l o g i c a l budgets. The best known quantity budget of t h i s period was the "minimum health and decency budget" compiled by the United States Bureau of Labor S t a t i s t i c s i n 1918 and 1919. Between 31 July 1918 and 28 February 1919 the budgets of 12,096 white fa m i l i e s i n ninety-two c i t i e s i n forty-two states were sampled from which a sub-sample of 280 budgets was drawn. The sample was s e l e c t i v e because the ob-j e c t "was to secure fa m i l i e s dependent f o r support, as l a r g e l y as p o s s i b l e , upon 54 the earnings of the husband." The two c r i t e r i a f o r the s e l e c t i o n of the sub-sample were that the budgets come from families approximating the s i z e of the "standard family" and that they purchased 3,500 c a l o r i e s of food per equivalent man per day. The standard family of husband, dependent wife, and three children under fourteen years of age was thought to represent i n s i z e and character the average white, native-born or old immigrant American family. The standard family was ex-pressed as equivalent i n s i z e to 3.35 adult males. Bureau d i e t i c i a n s determined that i f the food requirements of a working-class male were taken as 1.00, then the following table of values applied to the other members of h i s family: Female, 15 years or over .90 Children, 11 to 14 years .90 Children, 7 to 10 years .75 Children, 4 to 6 years .40 Children, under 4 years .1555 Supposedly the standard family was halfway "between the family with no children and the family with grown children capable of self-support.""^ The fi g u r e of 3,500 c a l o r i e s per adult male was selected by Bureau d i e t i c i a n s as the number needed (allowing for loss i n food preparation) to maintain health and to include s u f f i c i e n t proteins, f a t s , carbohydrates, whole milk and f r e s h vegetables and f r u i t . The Bureau attempted i n a s i m i l a r manner to e s t a b l i s h "health and decency" l e v e l s of housing, c l o t h i n g , f u e l and l i g h t , and sundries. In a 1919 Monthly Labor Review a r t i c l e , Royal Meeker, Commissioner of the Bureau of Labor, pointed out that many American families were not able to obtain the minimum qu a n t i t i e s deemed necessary by the Bureau because of low incomes.^ Not s u r p r i s i n g l y , then, the Bureau urged that i t s budget be used as a guideline i n e s t a b l i s h i n g minimum wages. But Paul Douglas, i n h i s 1925 p u b l i c a t i o n Wages and the Family, argued that the economy would not be able to pay minimum wages calculated from t h i s budget. Why? He answered that "to pay a l l workers enough to maintain a family of f i v e would mean saddling industry with the maintenance 58 of over f o r t y - f i v e m i l l i o n f i c t i t i o u s wives and c h i l d r e n . " Contrary to the Bureau's reasoning, every American d i d not l i v e i n a standard family. Douglas c i t e d the 1920 Census of Occupations which showed that 27.6% of a l l males be-tween the ages of twenty and s i x t y - f i v e were unmarried and, therefore, not r e a l l y e n t i t l e d to wages s u f f i c i e n t to support f i v e people, i n c l u d i n g themselves. 45 Douglas concluded that Bureau statisticians compiling the quantity budget and even the 1901 expenditure survey had arrived at the five-member standard family figure as the average family size because their surveys deliberately excluded single men, counted a l l family members whether dependent or not, and expressly selected families to approximate their perceived norm.^ ^ Since the average family size in Canada in 1921 was 4.28, the family budget based as i t is on the 61 1901 American budget would seem to overestimate family expenditures. Other problems of a similar nature can also be seen in the American studies. There is much reason to believe that a l l of them surveyed families whose incomes were higher than average. Alberts Rees in his American study, Real Wages in  Manufacturing 1890-1914, made this observation about the 1901 survey. He no-ted that the average income of the 25,440 families was $750. However, the 1901 62 United States Census showed average earnings in manufacturing of $621. As noted above the age composition of the standard family was chosen to strike a mean between two extremes: the family with no children and thetfamily with self-supporting children. A rather expensive mean was chosen, then, between two less expensive extremes. The quantities consumed by families vary according to the number of members and by the place occupied in the l i f e cycle. The Bureau selected one of the larger consumption phases of families as a norm. Again the family budget derived from the 1901 American study may over-estimate 6 3 Canadian working-class expenditures. These criticisms were not levelled at the Canadian family budget when i t was used as a guide in setting wages even though i t was based on the 1901 American survey, and, therefore, had the latter's conceptual problems. Never-theless the Canadian family budget did invoke other criticism. In 1918 The  Labour Gazette enthusiastically announced that Dominion mediators in the Van-couver Island coal dispute had suggested a settlement which included a wage 46 bonus of $1.25 on a basic $3.00 a day wage to be given to r e f l e c t cost of l i v i n g changes since 1916. This bonus was to be adjusted quarterly according to changes i n the cost of the family budget. Bonuses were paid to the coal miners f o r the next two years r e f l e c t i n g increases i n the cost of l i v i n g . But when the cost of l i v i n g began to f a l l i n e a r l y 1921, according to the Department of Labour's budget, the bonuses became smaller. By November of 1922 the bonus had been reduced from $1.25 to 76T<?. Thereafter the bonus o increased but only s l i g h t l y . The miners were not pleased with such reduc-tions i n t h e i r wages and, i n November of 1924, negotiated a new contract which did not include regular adjustments according to changes i n the family budget. Perhaps i f the family budget had been used i n adjusting more disputes more discussion would have taken place and some of the budget's inadequacies would have been corrected. As i t i s the inadequacies of the budget have been perpetuated i n the research of those who have used i t . Ostry, M.C. Urquhart and K.A.H. Buckley, and Michael Piva have used the index calculated from the family budget despite the f a c t that the index i s a Les Peyres budget and an inadequate one at that.^"* The desire to measure the s u f f i c i e n c y of incomes has been shared by Terry Copp and Piva. They used the family budget to measure the cost of a minimum subsistence, which i t probably did not measure. In a d d i -t i o n they accepted that the standard family of f i v e , on which a l l these early twentieth century budgets were based, was appropriate to Toronto and Montreal. The 1921 Canada Census, however, showed average family s i z e s of 3.68 and 4.32 66 r e s p e c t i v e l y for these c i t i e s . Copp's and Piva's use of the family budget deserves further d i s c u s s i o n . Their reasons f o r using the family budget to measure the adequacy of working 47 c l a s s incomes i n Montreal and Toronto were not completely sound. Piva used the budget to define a poverty l e v e l f o r Toronto which f e l l below a "health and decency standard of l i v i n g " , but h i s argument f o r doing so was s u r p r i s i n g . He noted that: although the Department i n s i s t e d i t s budget did not purport to show the minimum l e v e l of expendi-ture of f a m i l i e s on these basic items, i t s budget was based upon studies of actual family expendi-tures, p r i m a r i l y the United States Bureau of Labor S t a t i s t i c s ' study of family expenditures i n 1901-1902. Since the concern of the following ana-l y s i s i s the establishment of a minimum l e v e l of expenditure which would allow a "health and decency" standard of l i v i n g rather than the actual expenditures of working-class f a m i l i e s , the Department of Labour's budget i s quite s u i t a -b l e . In other words, Piva assumed that the expenditures of the American survey fami-l i e s were subsistence expenditures. As noted above, there was considerable evidence that t h e i r incomes were above average. Although the question of the adequacy of t h e i r incomes has never r e a l l y been asked, the evidence suggests that they were more than adequate.*^ Copp's reasons for using the budget to te s t adequacy were more straightforward. He calculated that the cost of the family budget i n 1926 i n Montreal f e l l midway between the cost of the American Labor Bureau's "minimum health and decency" budget and a "bare subsistence" prepared i n 1926 by a Montreal s o c i a l service agency, the Family Welfare Asso-c i a t i o n . Therefore, Copp continued, the Department of Labour's budget could be used as a "guide to the approximate amount of income required to l i v e a 68 l i f e somewhere between the barest subsistence and health and decency." Copp's premises are weak. The problems of the s o c i a l service agency's budget w i l l be explored i n Chapter 4; the problems with assuming that the American 48 budget t r u l y measured "minimum health and decency" have already been discussed. Copp's and Piva's reasons f o r assuming that the standard family of f i v e was appropriate for Montreal and Toronto were unsound. Copp described the t y p i c a l Montreal family of 1897 as made up of a husband, wife and three c h i l -69 dren. I f t h i s s i z e was t y p i c a l i n 1897 i t was not i n 1921 when the census reported the average family s i z e as 4.32. Nevertheless Copp used the family budget, a budget for a f i v e member family, i n h i s c a l c u l a t i o n s of the cost of l i v i n g i n Montreal i n the l a t e 1920s.^ Piva admitted that the average family si z e i n Toronto i n 1921 of 3.75 was f a r from the s i z e of the standard family. He argued, though, that expenditures were decreased only s l i g h t l y with fewer c h i l d r e n . He pointed out that the census reported an average household s i z e of 4.42, which could mean an aged or i n f i r m grandparent who was even more of a dependent than a c h i l d . ^ The average household could as e a s i l y have included a paying boarder. Piva assumed f a c t s that were not i n evidence. He cannot argue that the budget of a standard family of f i v e i s appropriate for the smaller Toronto family without knowing the ages of family members, the compo-s i t i o n of the household, the degree of dependency accounted f o r by the members of the household, as well as other pertinent information. In t h i s paper the problems perpetuated by Ostry, Urquhart and Buckley, Copp and Piva have been avoided by f i n d i n g new percentage expenditure weights with which to construct a cost of l i v i n g index, by using cost of l i v i n g budgets only to measure changes i n l i v i n g costs and not the adequacy of incomes, and by considering the flaws b u i l t into these budgets. Notes Actual weekly expenditures would, of course, d i f f e r from the weekly cost of l i v i n g thus c a l c u l a t e d . Not everything that i s consumed i n a week i s a c t u a l l y purchased that week, rather e x i s t i n g stocks of items previously purchased are consumed and infrequently purchased durables are used. The reason for constructing a weekly cost of l i v i n g from an annual cost of l i v i n g budget i s to make allowance for the use of items purchased over the long term. Expenditure proportions i n cost of l i v i n g budgets compiled f o r more recent times are changed more frequently. For example, the expenditure base of the monthly cost of l i v i n g index issued by S t a t i s t i c s Canada i s changed every ten years to r e f l e c t changes i n the pattern of consumer spending. Engel was Chief of the Prussian Bureau of S t a t i s t i c s i n the l a t e nineteenth century. United States, Department of Commerce and Labor, Eighteenth  Annual Report of the Commissioner of Labor, 1903, Cost of L i v i n g and R e t a i l  Prices of Food, 1903, p. 101. See also Marr and Paterson. An example to i l l u s t r a t e t h i s might be u s e f u l . Returning to the previous example A's expendituresweights were 60% for es s e n t i a l s ( e ) and 40% f o r non-essentials(ne) while B's weights were 40% and 60% r e s p e c t i v e l y . Assume the following p r i c e s : P, =2, P, =3, P. =4, and " r base year, e ' base year, ne ' i e P. =3. The indexes would be calculated as follows: i,ne A. I ±=(60X4/2) + (40X3/3)=160 B. I -(40X4/2) + (60X3/3)=14O Thus A's cost of l i v i n g has increased 60% since the base year while B's has increased by 40%. G.W. Bertram and Michael Percy, "Preliminary Research Report on Wages i n Canada 1871-1926," Unpublished research paper (Mimeographed), p. 33. Idem. "Urban Real Wage Trends i n Canada, 1900-1926: Some P r o v i s i o n a l Es-timates: An Outline," Discussion Paper 77-24, Department of Economics, Univ e r s i t y of B r i t i s h Columbia, August 1977 (Mimeographed), p. 33. Wage information p e r i o d i c a l l y appear i n The Labour Gazette from 1900 on-wards. This data and considerably more data was brought together i n Wages and Hours of Labour i n Canada f i r s t published by the Department of Labour i n 1921. The report contained wages f o r selected occupations i n a number of c i t i e s dating back to 1901. This information was subsequently updated and expanded upon i n annual reports published between 1922 and 1930. 50 7. B r i t i s h Columbia, Department of Labour, Annual Report of the Department of  Labour, 1918-1930, 1919-1931, Canada, Department of Trade and Commerce, F i f t h Census of Canada, 1911 did not contain published wage data. However, R.M. Mclnnis compiled 1911 wage data f o r the provinces from the Manuscript census. "Labour Force Data from Census Manuscripts, 1911-1961: B r i t i s h Columbia and Canada," compiled by R.M. Mclnnis, Queen's University, Unpu-b l i s h e d . By kind permission of R.M. Mclnnis. Canada, Department of Trade and Commerce, Sixth Census of Canada, 1921: Population, Dwellings, Families, Conjugal Condition of Family Head, Children, Orphanhood, Wage Earners, V o l . 3. Canada, Department of Trade and Commerce, Dominion Bureau of S t a t i s t i c s , Seventh Census of Canada, 1931: P o p u l a t i o n — Earnings, Housing, Families and  Miscellaenous, v o l . 5. Canada, Board of Inquiry into Cost of L i v i n g , Report of  the MBoard, 1915, 2 v o l s . 8. Bertram and Percy, "Real Wage Trends i n Canada 1900-26: Some P r o v i s i o n a l Es-timates," Canadian Journal of Economics 12 (May 1979):306. 9. Albert Rees used yearly wage data i n h i s study of American r e a l wages. The advantage of yearly data i s that shortime and overtime wages are i n -cluded i n the wages given. Real Wages i n Manufacturing 1890-1914, a s s i s t e d by Donald P. Jacobs, A Study by the National Bureau of Economic Research, New York (Princeton: Princeton University Press, 1961) . 10. B r i t i s h Columbia, Department of Labour, Annual Report of the Department of  Labour, 1922, p. 5. 11. Annual Report, 1919, p. 35. For s t r i c t comparability the 1921 returns should be given. In .1921, 2,275 firms responded for 50,485 wage earners. Annual Report, 1921, p. 28. 12 . See "Wage Earnings and Number of Wage Earners by Consistent Industry Classes — B r i t i s h Columbia— Males and Females," i n Mclnnis. 13. Annual Report, 1929, p. 33. 14. "Wage Earnings and Number of Wage Earners by Consistent Industry Classes — B r i t i s h Columbia— Males and Females," i n Mclnnis. 15. This i s , of course, an approximation since Census data i s not a v a i l a b l e f o r 1918 and 1919. 16. See Annual Report, 1918, p. 35 . 17. Annual Report, 1919, p. 12 . 18. Annual Report, 1920, p. 11. 19. Report of the Board, 1915, v o l . 1, pp. 544-651. 20. B r i t i s h Columbia, Commission on Labour, 1912-1941, Correspondence, Submissions  and Miscellaneous Data, v o l . 4, f i l e 20, Record Group 684, PABC. 21. The food items surveyed were s i r l o i n steak, chuck roast, v e a l , mutton, pork, s a l t pork, bacon, f i s h , l a r d , fresh and packed eggs, milk, dairy tubs and creamery p r i n t s butter, new and o l d cheese, bread, f l o u r , r o l l e d oats, r i c e , dry beans, evaporated apples, prunes, granulated and yellow sugar, black and green tea, coffee and potatoes, LG 10 (Feb 1910):915. 51 22. In 1905 R.H. Coats, Associate E d i t o r of the Gazette, suggested an e a r l i e r c o l l e c t i o n time for B r i t i s h Columbia i n order that the information could be mailed and received i n time f o r the monthly p u b l i c a t i o n deadline. Memorandum re Publ i c a t i o n of Cost of L i v i n g S t a t i s t i c s Monthly i n the Labour Gazette, 20 September 1905, Vol. 48, Record Group 27, MSDR, PAC. 23. L i s t increased i n February 1916, LG 16 (Feb 1916) :929; i n January 1917, LG 17 (Jan 1917):54; and i n March 1920 LG 20 (Mar 1920):346. Reduced l i s t appeared i n October 1922, LG 22 (Oct 1922):1219. 24. Coats, Memorandum re Organization of a Wages and Cost of L i v i n g S t a t i s t i c a l Branch, 1 September 1904, V o l . 48, Record Group 27, MSDR, PAC. 25. Memo for Mr. King, 17 July 1907, V o l . 48, Record Group 27, MSDR, PAC. 26. LG 10 (Feb 1910):915. 27. Explanation offered i n 1915 by Coats. Report of the Board, 1915, v o l . 1, p. 130. 28. I b i d . 29. Canada, Department of Labour, Report of the Department f o r the F i s c a l Year  Ending March 31, 1911, p. 147. 30. A survey of urban Canadian family expenditures did not become av a i l a b l e to the Department u n t i l 1940 when the Dominion Bureau of S t a t i s t i c s published i t s 1937-8 survey. Reasons f o r the delay d i d not appear i n discussions i n The  Labour Gazette or i n Department documents examined. However, shortages of s t a f f and budget money were probably s a l i e n t issues. Canada, Dominion Bureau of S t a t i s t i c s , Family Income and Expenditure i n Canada 1937-1938 (A Study of Urban Wage-Earner Families, i n c l u d i n g Data on Physical A t t r i b u t e s , 1941. 31. LG 15 (Aug 1915) :212. 32. LG 22 (Jan 1922):89. 33. Eighteenth Annual Report of the Commissioner of Labor, 1903. 34. H.A. Logan, "Labour Costs and Labour Standards," i n Labour i n Canadian-American  Relations, ed. by H.A. Innis (Toronto: Ryerson Press, 1957), p. 152. 35?o Bertram and Percy, "Real Wage Trends i n Canada," p. 301. 36. "Cost of L i v i n g I n q u i r i e s : The Construction of Family Budgets, Index Numbers, Etc., i n Various Countries," LG 19 (Mar 1919):354-5. 37. An ea r l y copy of the family budget i s found i n a memo from Coats to Deputy-Minister King written i n 1907. This statement accompanied the budget: "The construction of a budget would not be a d i f f i c u l t matter i n view of the work done along these l i n e s by the United States and Massachusetts Departments of Labour. The budget attached hereto i s based on the r e s u l t of these and other in v e s t i g a t i o n s , as we l l as on personal i n q u i r i e s . We could not very w e l l obtain a better budget without an in v e s t i g a t i o n into /Canadian^ methods of l i v i n g . . . " Memo for Mr. King, 17 July 1907, V o l . 48, Record Group 27, MSDR, PAC. 52 38. Canadians supposedly consumed l e s s coffee and more tea, less beef and poultry but more pork and cheese. "Cost of L i v i n g I n q u i r i e s , " p. 355. 39. An examination of Department of Labour p r i c e surveys of fresh f r u i t s and vege-tables bears out t h i s point. 40. LG 20 (Mar 1920):263. 41. "Cost of L i v i n g I n q u i r i e s . " p. 356. 42. Memorandum for the Minister and Deputy-Minister, 15 November 1918, F i l e 614.05, Vo l . 184, Record Group 27, MSDR, PAC. 43. " R e t a i l Prices of Staple Commodities Form," 4 January 1918, V o l . 24, Record Group 27, MSDR, PAC. 44. Memo f o r Mr. Ackland, 26 A p r i l 1909, V o l . 48, Record Group 27, MSDR, PAC. 45. LG 21 (Feb 1921):239. 46. Memorandum f o r the Minister and Deputy-Minister. 47. The Labour Gazette, Prices i n Canada and Other Countries, 1926, issued as  a Supplement to the Labour Gazette, 27 (Jan 1927):8. 48. Bertram and Percy, "Urban Real Wage Trends i n Canada," p. 3. 49. See e s p e c i a l l y R.H. Coats to W.L. Mackenzie King, 6 August 1908, V o l . 48, Record Group 27, MSDR, PAC. 50. To my knowledge these terms were f i r s t used by Margaret Gould, Canadian Brotherhood of Railway Employees' Researcher. See Canada, Parliament, House of Commons, Select Standing Committee on I n d u s t r i a l and International Relations, Minutes;:of Proceedings and Evidence, 18 May 1926, pp. 39-40. 51. For two examples of s o c i o l o g i c a l budgets see: Robert Caib Chapin, The Standard  of L i v i n g among Workingmen's Families i n New York (Philadelphia: Russel Sage Foundation and New York Cha r i t i e s P u b l i c a t i o n Committee, 1909); and Margaret F. Byington, Homestead: the Households of a Milltown, The Pittsburgh Survey (Philadelphia: Russel Sage Foundation and New York C h a r i t i e s P u b l i c a t i o n Committee, 1910) . 52. Paul Douglas, Wages and the Family (Chicago: University of Chicago Press, 1925), pp . 5-6. 53. See the testimony of Margaret S. Gould i n Minutes of Proceedings and Evidence, 18 May 1926, p. 58. 54. United States, Department of Labor, Bureau of Labor S t a t i s t i c s , Cost of L i v i n g  i n the United States, B u l l e t i n No. 357 (Washington: 1924), p. 69. 55. "Minimum Quantity Budget Necessary to Maintain a Worker's Family of Five i n Health and Decency," Monthly Labor Review 10 (June 1920):2-3. 56. "Tentative Quantity-Cost Budget Necessary to Maintain a Family of Five i n Washington, D.C." Monthly Labor Review 9 (Dec 1919):24-5. 5 3 57. Meeker, "What i s the American Standard of L i v i n g ? " Monthly Labor Review 9 (July 1919): 13. 58. Douglas, p. 5. 59. Calculated from Table 26, Per cent d i s t r i b u t i o n by age and sex of the population f or c i t i e s of 30,000 and over, 1931, Seventh Census of Canada, 1931. 60. Douglas, pp. 34-9. 61. A s i m i l a r c a l c u l a t i o n i s possible for Vancouver as l a t e as 1931 where of a t o t a l male population f i f t e e n years of age and over 38,499 o f 103,996 were si n g l e . 62. Rees. 63. The Bureau of Labor may, indeed, have knowingly contrived a standard family that did not r e f l e c t r e a l i t y . In the a r t i c l e written by Meeker c i t e d above he explained why the standard family was the i d e a l family. Three children were needed i n each family f o r the perpetuation of the race; there should be no boarders i n such fa m i l i e s f o r t h e i r admission"was not good p o l i c y " ; and for a family to function i n health and decency the mother had h e r s e l f t'ovbe de-<D '^pendent, that i s , she had to devote a l l her^.time to her home and family. Seen i n t h i s l i g h t minimum wages based on such a quantity budget would have made i t possible for working men to a f f o r d t h i s image of America. 64. The family budget was used i n settlements i n the Alberta coal mining and the P a c i f i c s h ipbuilding industries but f o r shorter period. Memorandum for the Minist e r and Deputy-Minister. See also "Cost of L i v i n g Adjustment of Wages of Vancouver Island Coal Miners," LG 23 (Nov 1923):1210. 65. In h i s Toronto study Piva calculated a d e c l i n i n g r e a l wage index for construc-t i o n and manufacturing workers, two classes of workers i n the p r i n t i n g trades, street railway motormen and conductors, and factory c r a f t workers. Piva, pp. 48, 52, 54, 55. 66. Sixth Census of Canada, 1921: Population, Dwellings, Families, Conjugal Con- d i t i o n of Family Head, Children, Orphanwood, Wage Earners, 3:58-9. 67. The American study showed a high degree of expenditures on sundries; at l e a s t h a l f of the f a m i l i e s reported budget surpluses, while another one-third broke even, Eighteenth Annual Report of the Commissioner of Labor, p. 12; Piva, p. 36. 68. Copp, pp. 31-2. 69. I b i d , p. 29. 70. See Chapter 1, p. 4. 71. Piva, p. 39. 54 CHAPTER 3 A Vancouver Money Wage Index, 1901-1929 The purpose of t h i s chapter i s to specify the construction of a three-industry, twenty-occupation Vancouver wage index and to perform various checks on i t with other wage data. There i s a problem i n t r y i n g to ascertain working class standards of l i v i n g from money wage evidence alone. As Ostry has pointed out: On the whole, money wages do not have much c y c l i c a l s e n s i t i v i t y and thus show a p e r s i s t e n t tendency to r i s e , except i n major depression periods. I t should be stressed, however, that during such periods no measure of wages i s a s i g n i f i c a n t i n d i c a t o r of the f i n a n c i a l condition of labour, since so many workers are e i t h e r unemployed or on short work weeks.1 This much w i l l be kept i n mind as Vancouver working class wages between 1901 and 1929 are examined. To begin with i t i s necessary to consider the wage information used i n the index. Wages and Hours of Labour i n Canada, which i s the source of the evidence used here, was f i r s t published by the Department of Labour i n 1921. The f i r s t bulletin, K,was a survey covering wages from 1901 to 1920. The Depart-ment admitted that the occupations l i s t e d did not cover the e n t i r e f i e l d of industry, but thought that the p a r t i c u l a r trades selected were " t y p i c a l of a 2 s u f f i c i e n t l y wide range of employment to make t h e i r p u b l i c a t i o n of value." The sources of t h i s data have already been noted: information from Depart-mental o f f i c e r s and correspondents, c o l l e c t i v e agreements, F a i r Wage contracts, and reports from trade union o f f i c i a l s and employers. As f a r as possible the 3 rates quoted were those i n e f f e c t i n September of each year. 55 Consistent and continuous wage data f o r Vancouver i n the per iod under study was ava-i lablefor f i v e c lasses of labour as def ined by the Department of Labour. Wages for seven occupations i n the const ruct ion industry were g i v e n . These were b r i c k l a y e r s , carpenters , s tonecut te rs , e l e c t r i c a l workers, p a i n t e r s , plumbers and b u i l d e r s ' labourers . Wages f o r f i v e occupations i n the metal trades — b lacksmi ths , bo i le rmakers , i ron moulders, m a c h i n i s t s , and sheet metal workers — and two i n the p r i n t i n g trades — hand compositors and p r e s s -m e n - — were obta ined . The metal t rades and the p r i n t i n g trades were combined in the s i n g l e manufacturing index given h e r e . The t ranspor ta t ion index com-p i l e d f o r t h i s paper was formed from a combination of steam rai lway workers and e l e c t r i c s t ree t ra i lway workers. The occupations covered here were f r e i g h t conductors, brakemen, f r e i g h t locomotive engineers , f re igh t locomotive f i remen, te legraphers , sectionmen, arid s t ree t ra i lway conductors and motormen. Unfor -tunate ly the data on sawmill workers' wages could not be used s ince Vancouver data only covered the pe r iod 1920 to 1929. The conversion of the Department of Labour wage data into wage indexes fo r each of the occupations was a simple matter . Weekly wages were c a l c u l a t e d by m u l t i p l y i n g the hour ly rates given by the hours: worked per week. These week-l y wages were converted in to an index with base year 1913 by convert ing the wages i n t o 1913 d o l l a r s . More s imply , wages i n 1913 were set at 100 and wages f o r the other years were expressed as a percentage of t h i s . I f the wages fo r a p a r t i c u l a r year were lower than 1913 wages, then the index number was less than 100; i f they were more than 1913 wages, then the index was greater than 100. The year 1913 was chosen as the base year because i t was in the middle of the per iod and t h e r e f o r e , would not l i k e l y have s i g n i f i c a n t l y b iased the index 56 up or down. Also other Indexes used i n the construction of the p r i c e index were based on 1913 as were e x i s t i n g n a t i o n a l indexes. Thus, f o r purposes of comparison 1913 seemed the best base year. Next these i n d i v i d u a l occupation indexes were combined into industry i n -dexes and these, i n turn, were combined in t o an a l l i n d u s t r i e s index. It' was important that the i n d i v i d u a l indexes not be combined i n such a way as to give a simple average. In a simple average each occupation and industry would have been given an influence out of proportion to the actual number of wage earners i t represented. Take for instance the following example. Occupation A consists of f i v e wage earners while occupation B consists of ten. Suppose that the wage indexes f o r these two occupations are 110 and 100 i n year two where 100= year one. A simple average index of these indexes would be 105. This number, however, gives excessive influence to occupation A and i n s u f f i c i e n t influence to occupation B. I f , however, the indexes are weighted by the proportions of wage earners they represent before averaging a d i f f e r e n t r e s u l t i s obtained: Weight A (Index A) + Weight B (Index B) = Weighted Total Index 5/15(110) + 10/15(100) - 103.3 For t h i s reason the indexes prepared were a l l weighted. Two sets of weights were needed,.'' In the f i r s t place the occupations had to be weighted and combined to form three industry indexes. Secondly, these had to be weighted and combined i n an a l l i n d u s t r i e s index. I t would be desir-able to obtain occupation and industry weights that r e f l e c t e d any changes over time i n employment patterns, such as a decrease i n the proportion of wage earners who were carpenters. To c i t e one case the proportion of construction 57 wage earners i n Vancouver who were carpenters dropped from 56% i n 1911 to 36% i n 1921 according to the census. A wage index for 1901 to 1929 that was compiled using the f i r s t percentage only as a weight might give an excessive influence to carpenters i n the l a t t e r part of the period under study. The problem created here i s s i m i l a r to the one discussed above of using a simple average rather than a weighted one. Since Wages and Hours of Labour i n Canada gave the wages earned by wage earners, an index constructed from t h i s data has to be weighted according to the proportions of wage earners i n the population and not to the proportions of other workers, such as, s a l a r i e d employees, the self-employed, or other own account workers. The Department of Labour's wage information does not ne c e s s a r i l y r e f l e c t the earnings of these other groups. The 1901 census did not provide data on a l l wage earners. The pu-bl i s h e d 1911 census only provided data on the " g a i n f u l l y occupied" which i n -cluded s a l a r i e d and own account workers i n addition to wage earners. The 1921 census gave separate data on both the g a i n f u l l y occupied and wage earners. Although the 1911 census did not i s o l a t e wage earners from other classes of workers i t was possible to approximate the numbers of wage earners i n 1911 by assuming that the same re l a t i o n s h i p existed between wage earners and the g a i n f u l l y occupied i n 1911 as was known to e x i s t i n 1921. For example, i f 80% of the g a i n f u l l y occupied described as carpenters i n the 1921 census were wage earning ones, then i t was assumed that 80% of the g a i n f u l l y occupied carpenters in 1911 were wage earners. Two separate indexes were calculated using these 19.11 and 1921 weights. (See Table 3) . Wages for 1901 to 1914 were combined i n an index using the 1911 weights. Then wages for 1915 to 1929 were combined i n an index using the 1921 weights. Wages for the whole period of 1901 to 1929 were also combined i n a separate index using only the 1921 weights. This was done to see what Table 3 Nominal and Implicit Weights Derived from Census Wage Earner Data INDUSTRIES 1911 Nominal Implicit 1921 Nominal Implicit I . Manufactures. I I . Construction I I I . Transportation SELECTED OCCLTATIONS I. 1. Blacksmiths 2. Boilermakers 3. Moulders 4. Machinists 5. Compositors 6. Pressmen I I . 1. Bricklayers 2. Carpenters 3. E l e c t r i c i a n s 4 . Sheet Metal Workers 5. Plumbers 6. Labourers 7. Painters & Decorators I I I . 1. Brakemen 2. Conductors-Steam Railroad 3. Locomotive Engineers 4. Locomotive Firemen . 5. Sectionmen 6. Conductors-Electric Railroad 7. Telegraphers 20.3 15.1 11.1 46.5 3.6 1.0 3.4 5.3 6.8 0.8 10.9 5.4 55.5 1.3 2.9 10.2 11.5 9.8 96.6 1.8 1.5 2.1 1.9 0.4 8.8 3.9 20.4 43.6 32.5 23.9 100.0 17.2 4.8 16.3 25.4 32.5 3.8 100.0 5.6 57.4 1.3 3.0 10.6 11.9 10.2 100.0 8.8 7.4 10.3 9.3 2.0 43.1 19.0 100.0 19.2 9.5 13.8 42.5 0.3 1.4 1.5 6.0 3.7 0.4 13.3 2.2 35.7 4.6 0.7 6.0 8.6 11.0 68.8 1.3 1.9 3.0 1.4 1.8 8.9 2.6 20.9 45.2 22.4 32 .4 100.0 2.3 10.5 11.3 45.1 27.8 3.0 100.0 3.2 51.9 6.7 1.0 8.7 12.5 16.0 100.0 6.2 9.1 14.4 6.7 8.6 42.6 12.4 100.0 Note: Ideally wage data would have been known for a l l wage earners represented i n the census. However, the Department of Labour surveyed selected wage earners' wages in a few of the industries, represented in the census. For example, the Department's wage data for Vancouver manufacturing wage earners only' covered 20.9% and 13.3%. of the manufacturing wage earners enumerated by the 1911 and 1921 census. There-fore, nominal weights were obtained for each occupation i n manufacturing known that t o t a l l e d 20.9% in 1911 and 13.3% in 1921. Implicit weights were then derived from these where the t o t a l equals 100 for each of the two years. This procedure was repeated for each industry and the a l l industries index. 59 e f f e c t the s h i f t i n weights made i n the c a l c u l a t i o n of the i n d e x . S i n c e the use of d i f f e r e n t weights r e s u l t e d i n indexes which moved i n the same d i r e c t i o n and w i t h s i m i l a r magnitude on ly the s i n g l e i n d e x weighted by the 1921 weights was used i n the f i n a l r e a l wage i n d e x . The wage index i s g iven here i n Table 4 . In comparing the wage index produced here w i t h the e x i s t i n g Department o f Labour and the Bertram/and Percy n a t i o n a l wage indexes two p o i n t s a re immediate-l y '.y made c l e a r . (See Table 5 ) . In the f i r s t p l a c e , i f money wages p a i d i n B r i t i s h Columbia were h i g h e r than those p a i d elsewhere i n Canada, they d i d not i n c r e a s e as much as n a t i o n a l wages d i d i n the 1910s and 1920s. To some degree O s t r y ' s c o n c l u s i o n about the c y c l i c a l i n s e n s i t i v i t y o f money wages has h e l d . The wage i n d e x showed a p e r s i s t e n t tendency to r i s e . Wages from 1901 to 1929 more than doub led . In f a c t the wage index o n l y decreased at two p o i n t s , between 1914 and 1915 and between 1920 and 1922, two major depress ion p e r i o d s . Because the wage index was composed of the s tandard wages o f s e l e c t e d s k i l l e d tradesmen, i t was l e s s s e n s i t i v e to o ther l e s s dramat ic c y c l i c a l f l u c t u a t i o n s . The u n -s k i l l e d , l e s s s k i l l e d and i m p e r f e c t l y o r g a n i z e d t rades were more v u l n e r a b l e to these c y c l i c a l f l u c t u a t i o n s than were the o rgan i zed s k i l l e d t rades because the l a t t e r were u s u a l l y a b l e to h o l d onto t h e i r g a i n s . However, the wage index was not complete ly i n s e n s i t i v e to c y c l i c a l f l u c -t u a t i o n s . I f s t u d i e d i n c o n j u n c t i o n w i t h the r e p o r t s of economic c o n d i t i o n s of the Dominion and B r i t i s h Columbia Departments of Labour , as w e l l as o t h e r wage d a t a , some i n t e r e s t i n g f e a t u r e s become v i s i b l e . The years 1901 and 1913 were the ha lcyon t imes of the p r a i r i e wheat economy. The impact of t h i s p r o s -p e r i t y on B r i t i s h Columbia was to encourage the lumber i n d u s t r y , because of i n c r e a s e d demand f o r b u i l d i n g m a t e r i a l s , and to promote c o n s i d e r a b l e c o n s t r u c -t i o n and r e a l e s t a t e a c t i v i t y i n Vancouver . The p e r i o d can be d i v i d e d i n t o th ree s h o r t e r p e r i o d s . A c c o r d i n g to the Vancouver correspondent to The Labour Table 4 Index Numbers of Average Hourly Wage Rates for Selected Vancouver Industries 1901-1929 . 1913 = 100 Total Index Manufacturing Construction transpo r t a t i o n 1901 74.6 78.9 70.4 71.4 1902 77.9 82.5 74.6 73.6 1903 77.9 83.1 75.4 72.3 1904 78.5 84.0 .... 75.0 73.2 1905 80.8 86.2 78.9 74.6 1906 81.2 86.4 80.0 74.8 1907 ' 88.6 . 93.3 83.1 . . 86.0 1908 90.2 94.3 83.8 88.9 1909 90 .6 94.7 84.8 . 88.9 1910 93.6 94 .9 93.4 91.7 1911 97.2 99.0 93.7 97.1 1912 99.6 100.0 98.4 • 100.0 1913 100.0 100 .0 100.0 100.0 1914 100.4 100.0 98.2 102 .6 1915 97.0 100.0 88.3 98.7 1916 102.4 107.6 83.7 107.9 1917 111.8 118 .9 90.7 116.4 1918 133.5 140.6 123.8 130.3 ; 1919 147.2 153.7 135.0 146.4. 1920 164.8 165.5 160.6 166.7' 1921 158.0 162.1 ' 144.0 161.9 1922 148.8 148.9 143.3. 152.6 192 3 .154.6 157.5 144.5 157.6 1924 156.2 159.4 147.8 157.6. 1925 157.9 161.0 152.0 157.6 1926 160.9 163.0 161.3 157.6 1927 164.6 165.2 164.5 163.8 1928 166.2 165.3 171.4 163.8 1929 167.1 166.0 172.9 164.7 1921 Weights 61 Table 5 National Average Wage Rates 1913=100 (1) (2) Department of Labour Bertram and Percy Index Index 1901 72.9 68.7 1905 82.7 77.9 1910 95.1 90.4 1911 94.1 93.9 1912 97.1 96.6 1913 100.0 100.0 1914 101.2 102 .0 1915 102.0 104.1 1916 109.0 110.1 1917 125.1 122 .0 1918 146.7 141.6 1919 172.5 170.6 1920 205.1 206.3 1921 187.1 191.7 1922 174.5 180.3 1923 179.2 186/0 1924 181.6 187.8 1925 179.6 186.9 1926 180.8 188.0 1927 184.7 . . . 1928 187.0 . . . 1929 190.2 Sources: Urquhart and Buckley, Series Dl-11, Index numbers of average wage rates f o r selected main i n d u s t r i e s , 1901 to 1960, p. 84 (rec a l c u l a t e d from base 1949); Bertram and Percy, "Real Wage Trends i n Canada", p. 307. 62 Gazette, growth i n a l l sectors took place between 1901 and 1907 with "less impressive" gains having been made i n 1904 and 1905.^ 1906 and 1907 were the most expansive years; then actual shortages of labour were thought to push up wages. The Vancouver wage index constructed here r e g i s t e r e d a 7.4 point increase between 1906 and 1907. In other years there was a glut of labour i n s p i t e of employment opportunities which increased every year. Slumps i n mi-ning a c t i v i t y i n 1902 and 1904 and i n the lumber industry i n 1904 brought men 9 into the c i t y to look for work. Other inf l u x e s of men followed s t r i k e s i n Rossland, Seattle and San Francisco i n 1901, and among coal miners and railway construction workers i n 1903."^ This movement of men was, of course, i n addition to the regular inflow of unemployed from the i n t e r i o r every winter. The labour surplus present i n Vancouver perhaps acccounted for the smaller increases i n the c i t y ' s wage index i n years other than 1906-7. This general prosperity was interrupted i n the summer of 1907 when "a growing stringency i n the money markets of the world began to be f e l t i n C a n a d a . W i t h reduced demand on the p r a i r i e s f o r b u i l d i n g materials, the lumber industry went into a slump. F i n a n c i a l stringency meant that the i n -vestment c a p i t a l needed for many construction projects was not a v a i l a b l e . Few businesses were untouched by these conditions. The c i t y provided r e l i e f work, cheap s h e l t e r and meal t i c k e t s f o r the unemployed i n the winter of 12 1907-8. In the spring of 1908 the Gazette correspondent reported that many men had l e f t Vancouver, some hoping to find work i n the c e n t r a l or nccthern 13 inteflor of the province, others going south to the United States. But i n s p i t e of the inhospitable labour market i n Vancouver these vacant places were, reportably, more than f i l l e d with newcomers who came i n a n t i c i p a t i o n of con-14 s t r u c t i o n projects i n Prince Rupert or new i n t e r i o r r a i l r o a d a c t i v i t y . 6 3 The c i t y ' s wage index did not reveal a slump i n t h i s recession period, no doubt because the s k i l l e d workers whose pay rates the index r e f l e c t e d maintained t h e i r wages even though they may have worked shorter time. The smallness of the increase i n the index for 1907 through 1909 seems to have been an i n d i c a t i o n of depressed conditions. From 1909 to 1913 the wage index registered an increase of ten points . Better times had come by the spring of 1909. Recovery occurred e a r l i e r i n the West than i n the East, a f a c t the Department of Labour a t t r i b u t e d to an "upward movement" i n r e a l estate and the large amount of railway construction under way i n the four western provinces.*'' Boom conditions p r e v a i l e d f o r 1911 and 1912 when, as i n 1906 and 1907, shortages of labour were again noted, 16 even for workers as prone to unemployment as bank and o f f i c e c l e r k s . Various groups among organized labour judged the times r i p e for pressing t h e i r demands. The Vancouver b u i l d i n g trades were successful i n t h e i r s t r i k e of June, 1911. 1 7 The period from mid-1913 u n t i l 1922 marked a second and d i s t i n c t l y d i f -ferent phase of economic a c t i v i t y i n Vancouver. The March 1913 Labour Gazette reported that, i n the c a p i t a l i s t world, investment was curbed a f t e r trouble erupted i n the Balkans. In Vancouver the construction industry was the f i r s t to f e e l the e f f e c t s of t i g h t e r money: many^of the construction projects plan-ned for 1913 were not completed because of the d i f f i c u l t y of obtaining f i n a n -18 c i n g . Unemployed construction workers began leaving Vancouver that summer, while the pool of those that remained was swelled i n l a t e autumn by the season-a l i n f l u x of unemployed. The winter work a v a i l a b l e could not accommodate t h i s "above-normal" number of unemployed. City Council announced i n November of 1913 that r e l i e f would only be provided f o r married men, and that the day rate;-64' f o r r e l i e f work would have to be reduced from $3 to $ 2 I n the summer of 1914 one regular major source of employment disappeared because construction on the Grand Trunk P a c i f i c and Canadian Northern Lines had been completed. As the correspondent to the Gazette noted, the outbreak of war only accelerated t h i s " i n d u s t r i a l i n a c t i v i t y . " The metal trades and the i n t e r i o r lumber camps 20 closed down i n September of 1914. Workers l e f t Vancouver every day but s t i l l others funnelled into the c i t y so that by October of 1914 there were an estima-21 ted 15,000 unemployed i n the c i t y . Conditions were somewhat better i n 1915, not because employment increased but reportedly because the labour force was shrinking. City h a l l estimated that population had decreased from 122,000 i n 22 1912 to 106,000 i n 1914. M i l i t a r y recruitment was s t a r t i n g to draw o f f numbers of men as w e l l . A Dominion Order-in Council proh i b i t e d the entry of 23 artisans and labourers into B r i t i s h Columbia. But there were s t i l l more un-employed than(;the City's resources could handle. On 5 A p r i l the City suspended aid to non-residents. When r i o t i n g ensued the next day the P r o v i n c i a l Government 24 granted $50,000 f o r r e l i e f . By the f a l l a new form of welfare appeared: arrangements were made to send excursions of the unemployed to the p r a i r i e s 25 for harvest work. These excursions were held throughout the war. The magni-tude of the economic c r i s i s i n Vancouver was r e f l e c t e d , though understated, i n the wage index. Wages f e l l 3.4 points between 1914 and 1915 as even the s k i l l e d had to take wage cuts. In 1916 B r i t i s h Columbia f i n a l l y came to b e n e f i t from wartime economic con-d i t i o n s . Demand had already increased f o r the m e t a l l i c minerals needed i n mu-n i t i o n s production. The lumber industry entered a boom i n 1916 because of i n t e r -ruptions i n the supply of B a l t i c lumber. As w e l l , though not u n t i l 1917, P a c i f i c spruce was i n demand f o r the construction of a i r p l a n e s . The Vancouver s h i p b u i l d -26 ing industry expanded because ships were needed to carry the lumber. Local 65 industries provided boots and t e x t i l e s to the armed forces. One sign of greatly improved employment conditions by September of 1916 was that the C i t y R e l i e f O f f i c e r reported d i f f i c u l t y i n f i l l i n g necessary c i t y road and sewer 28 j o b s . Throughout 1917 the correspondent to The Labour Gazette reported that 29 banks were compelled to f i l l the jobs of e n l i s t e d clerks with women. I t must be remembered, of course, that much of the decline i n unemployment was due to a decline i n the s i z e of the labour force. This was the r e s u l t of en-30 listments (50,000 f o r B r i t i s h Columbia by 1918) and the exodus of labour that had begun i n 1913. The wage index r e f l e c t e d the improved demand for labour i n these years and the success s k i l l e d , organized workers had i n mak-i n g up for the slow growth of t h e i r wages i n the preceding^ years. The i n -dex jumped 31.1 points between 1916 and 1918. These "boom" conditions were not immediately dis s i p a t e d with the signing 31 of the Armistice, as several i n d u s t r i e s worked to f i l l e x i s t i n g contracts. The wage index continued to climb u n t i l 1920. But retrenchment had already begun i n 1919 and the ensuing depressed conditions continued u n t i l 1922. Once more the unemployed flocked to Vancouver as i n t e r i o r logging and mining camps, sawmills, and shingle m i l l s closed down. These workers were joined by s o l d i e r s returning home or taking t h e i r discharge on the west coast. R e l i e f provisions on the scale of those of 1914 and 1916 again became necessary as 32 "winter unemployment conditions" continued through the spring and summer. The wage index also reveals that a major depression had occurred. Between 1920 and 1922 the index f e l l sixteen p o i n t s . Improvement was on the horizon by 1922, the beginning of the t h i r d phase of economic a c t i v i t y , as operations i n the lumber and mining industries i n -creased. But unemployment continued to plague Vancouver u n t i l the end of the 66 decade, though not on the scale of that f e l t between 1913 and 1915 and between 1920 and 1922 . Plenty of unemployed men were a v a i l a b l e i n October of 1923 to accept the Vancouver Shipping Federation's o f f e r of 80c an hour to anyone who 33 would cross the Longshoremen's picket l i n e . In 1924, a year i n which slumps i n lumber and mining were recorded, the province found i t necessary to dispense 34 $150,000 f o r r e l i e f work. The province had not voted s p e c i a l r e l i e f funds f o r three years. Even a f t e r the recovery from t h i s "temporary" set back i n 1925, 35 unemployment continued to be a problem. This was e s p e c i a l l y true of the winter months but was also so i n the summer months. The p r o v i n c i a l Department of Labour reported labour surpluses i n each year from 1925 to 1929. The Depart-ment a t t r i b u t e d much of t h i s to the s o l d i e r "problem". In January 1925 37,000 CEF pensioned s o l d i e r s resided i n Canada. Of t h i s 5,400 or 14.5% were i n B r i -tish!:?, Columbia, mainly the Lower Mainland. This f i g u r e compared to enlistments 36 and discharges i n the province of 9.0% and 822%. The mild climate had a t t r a c -ted many of these ex-servicemen. Many of the s o l d i e r s were handicapped and, thus, not s u i t e d to much of the physically-demanding work which characterized the pro-37 vin c e . Of course i t was not usually the ex-servicemen who went on the annual 38 spring and f a l l p r a i r i e excursions; nor was i t only the ex-service men on whom $250,000 of r e l i e f money was expended i n the province i n the winter of 39 1927. In contrast to the full-employment conditions of 1906-7, 1911-12, and l a t e i n the war, i n the 1920s an economic climate p r e v a i l e d where employment expansion coincided with p e r s i s t e n t unemployment. The wage index revealed a steady but undramatic increase from 1923 to 1929 which perhaps r e f l e c t e d t h i s phenomenon. But again Ostry's conclusion i s borne out that wages show l i t t l e n s e n s i t i v i t y to less than major c y c l i c a l economic a c t i v i t y . 67 How did the other a v a i l a b l e wage data — incomplete though i t i s — correspond to the wage index? That found i n the Canada census showed that the wages i n the wage index were higher than the p r o v i n c i a l average. An approx-imation?, of the average B r i t i s h Columbia male's weekly wage from the 19il!census 40 was $16.35 while the average on the wage index was $22.10. The 1921 census gave an average wage for Vancouver males of $24.61 f o r 44.5 weeks worked while 41 the average on the wage index was $34 .99. The following table compares wage data from the 1921 census with that from the wage index f o r the three sectors comprising the index: 1921 census data Wage index wage/week wage/week Manufacturing $22.62 $37.00 Construction 26.24 34.70 Transportation 27.51 32.40 The findings of the B r i t i s h Columbia Commission on Labour i n 1913 and 1914 gave further evidence of the higher than average wage index wages. Their wage evidence i s given here i n Appendix 1. These r e s u l t s could be ant i c i p a t e d given the o r i g i n s of the wage index information. Nevertheless the census does suggest that the wage index does not completely d i s t o r t the magnitude of wage changes. Wages f o r a l l male wage earners i n B r i t i s h Columbia i n 1921 were 40.9% higher than those obtained i n 1911. The comparative increase i n manu-facturing was 49.1%, i n construction 22.0% and i n transportation 57.2%. The comparable increases from the wage index were 58%, 61.7%, 50.9%, and 66.5%. These differences between the wage index and the census wage information bear noting. The spread between the 1921 weekly ages paid manufacturing wages earners according to the census and those paid according to the index i s con-sider a b l e . This difference i n remunerations suggests that s u b s t a n t i a l numbers 68. of manufacturing workers did not obtain the wages of the s k i l l e d metal and p r i n t i n g trades or that many worked short time. At the most the manufacturing wage index compiled here represented the p o s i t i o n s of 20.9% of the manufacturing wage earners i n 1911 and 13.3% i n 1921. (See Table 3). In the construction industry where the index represented 96.6% and 68.8% of construction wage earners for the same years a smaller difference existed between the two wage figures given. The higher representativeness suggests that short time was more the cause of the spread, although i t should not be assumed that the Department of Labour rates were won by a l l who were " e n t i t l e d " to them. That the smallest spread e x i s t s between the census and index earnings i n transportation i s a r e -f l e c t i o n of the high degree of organization i n that trade. The difference i n percentage changes i n wages between 1911 and 1921 i s most s t r i k i n g f or construction workers. The census showed a change of 22.0% while the index showed a change of 50.9%. The Vancouver construction industry de-c l i n e d between 1911 and 1921. The b u i l d i n g permits returns given i n Table 1 substantiate t h i s p o i n t . In 1911 the census reported that 15.1% of a l l Vancouver wage earners were engaged i n the construction industry; t h i s percentage had dropped to 9.5% by 1921. Surely one of the e f f e c t s of t h i s decline was a r e -duction i n the amount of work a v a i l a b l e to construction workers. Yearly earnings, as reported by the 1921 census, were therefore reduced but the hourlyjrearnings reported by the Department of Labour were not. A l l that can be s a i d with safety i s that the weekly wages given i n the B r i t i s h Columbia Department of Labour wage surveys are lower than those given for the same period by the wage index. This caution i s given because the d i -r e c t i o n and order of the bias i n the p r o v i n c i a l data caused by sample conditions and methods of averaging i s unknown. However, l i k e the census wage increases, 69 the p r o v i n c i a l data reinforced conclusions drawn from the wage index, i n p a r t i c u l a r that wages did increase moderately i n the 1920s^ The p r o v i n c i a l average male weekly wage, according to the p r o v i n c i a l labour department, i n -creased from $27.62 to $29.20, or 5.72%. From 1921 to 1929 the wage index increased 9.1 points, or 5.76%. A serious f a i l i n g of the wage index i s that i t does not include any accounting of women's wages. For t h i s the only observations a v a i l a b l e are i n the census and i n the B r i t i s h Columbia Department of Labour's Minimum Wage Board surveys. According to the census the average p r o v i n c i a l female wage increased between 1911 and 1921 from $4395 a year to $676; t h i s was $289 and $371 le s s than male wages f o r the same years. Not s u r p r i s i n g l y the 1921 census showed Vancouver women's weekly wages to be f a r below the average wage revealed on the wage index. The two numbers were $15.34 and $34.99 r e s p e c t i v e l y . However, women's wages increased 54% during the decade, a higher rate of i n -43 crease than that of the males i n the same decade,/ Between 1918 and 1929 the p r o v i n c i a l Department of Labour published surveys of female wage rates made by the Minimum Wage Board. The Board's survey methods were s i m i l a r to the Depart-ment's and thus the former's r e s u l t s were questionable f o r the same reasons as mentioned i n the previous chapter's discussion of the B r i t i s h Columbia Depart-44 ment of Labour. The Minimum Wage Board Edata showed smaller wage increases for women i n the 1920s than the Department's data and the wage index showed for men. The average women's wage increased between 1921 and 1929 from $17.12 to $17.64. The percentage change was 3.0%. The Vancouver wage index constructed was not s u b s t a n t i a l l y challenged by the other wage data a v a i l a b l e . In a d d i t i o n , the wage index f i t t e d comfortably with the q u a l i t a t i v e record of the labour market i n B r i t i s h Columbia and Vancouver. But to speak with more assurance about the condition of labour i n the c i t y between 1901_ and 1929 a p r i c e index must be compiled that can be li n k e d with the wage index to in d i c a t e the trend of wage earners' purchasing power. 71-Notes 1. Ostry, p. 206. 2. Wages and Hours of Labour i n Canada, 1921, p. 1 3. I b i d . 4. Stonecutters were omitted from my index because they were not c l e a r l y distinguished i n the census and, therefore, could not be weighted. Sheet metal workers were placed i n the construction index i n t h i s paper because they were most c l e a r l y located here according to the census. Pressmen's wages were only known for 1911 to 1929. However, wages for the 1901 to 1910 period were calculated by assuming that the r e l a t i o n s h i p that existed between pressmen's wages and compositors' wages over the period 1911 to 1914 held for the 1901 to 1910 period. 5. Canada, Department of A g r i c u l t u r e , Fourth Census of Canada, 1901: Manufac- tures provides information on manufacturing wage earners only; F i f t h Census  of Canada, 1911; Occupations of the People; Sixth Census of Canada, 1921:  Occupations and S i x t h Census of Canada, 1921: Population. Dwellings, Fami- l i e s , Conjugal Condition of Family Head, Children, Orphanhood, Wage Earners. 6. See Coats' comment about the impact of the 1907-8 recession on s k i l l e d , organized workers i n Report of the Board, 1915, v o l . 1, p. 425. 7. LG 1901-1907, passim. 8. " I n d u s t r i a l and Labour Conditions i n Canada," LG 7 (Jan. 1907):753-70. 9. LG 2 (June 1902):702; LG 4 (June 1904) :1225. 10. LG 2 (Sept. 1901):148; LG 3 (Apr. 1903) :759; LG 8 (June 1903):971. 11. " I n d u s t r i a l and Labour Conditions i n Canada," LG 8 (Jan. 1908):809. 12. "Unemployment i n Canada during the Winter Season 1908-09," LG 8 (Jan. 1908) :736. 13. LG 8 (Mar. 1908):1074. 14. LG 9 (Sept. 1908):261-2. 15. "Department of Labour Record of Changes i n Wages," Report of the Board, 1915, v o l . 1, p. 425. 16. "Review of Labour Conditions i n Canada," LG 13 (Jan. 1912):737-45. 17. The issue i n the s t r i k e which began 5 June was the "closed vs. the open shop." The Vancouver Employers' Association preferred the l a t t e r option. Although a "large number" of non-union tradesmen continued to work, a l l organized workers, except f or b r i c k l a y e r s , struck u n t i l 25 J u l y by which time most employers had conceded the s t r i k e r s ' demands. LG 12 (July 1911): 42; LG 12 (Aug. 1911) :134. 72 18. LG 13 ( March 1913): 950. 19. LG 14 (Dec. 1913):677. 20. LG 15 (Sept. 1914):366. 21. LG 15 (Oct. 1914):460. 22. Annual Report, City of Vancouver, 1941, p. 63. 23. First passed in September of 1914 this Order-in-Council was renewed in April of 1915. "Prohibition of Immigration of Skilled and Unskilled Labour to British Columbia," LG 15 (May 1915):1256. 24. LG 15 (May 1915):1292. 25. LG 16 (Sept. 1915):280; John Herd Thompson seems not to have considered the relief aspect of these harvest excursions from British Columbia. In a recent Canadian Historical Review he writes that" "Railway companies were reluctant to sponsor eastward excursions from British Columbia which could take labour from the fruit growers and the extractive industries, and so i t was not until the wartime emergency of 1915 that rates of lC a mile to points on the Prairies were offered to British Columbia workers." "Bringing in the Sheaves': The Harvest Excursionists, 1890-1929," Canadian Historical Review 59 (Dec. 1978):466-78. 26. LG 16 (Aug. 1916):1159. 27. LG 16 (Nov. 1916):1729. 28. LG 16 (Sept. 1916) :1542, i 29. LG 17, passim. 30. Annual Report, 1918, P« 5. 31. Annual Report, 1919, P. 5. 32. Annual Report, 1921, P^  5. 33. Annual Report, 1923, P« 33. 34. Annual Report, 1924, P« 6 35. Annual Report, 1925, P« 39. 36. Annual Report, 1927, P« 59. 37. Annual Report, 1925, P» 45. 38. Thompson, "Bringing in the Sheaves." p. 472, gave the following totals for the excursions from British Columbia: 1921, 4,397; 1922, 4,170; 1923, 4,019; 1924, 5,351; 1925, 9,471; 1926, 7,336; 1927, 7,703; 1928,. 9,737.7. 73 39. Annual Report, 1927, p. 56. 40. Mclnnis gave average annual male earnings as $728. A weekly estimate was derived from this by dividing $728 by 44.5 weeks, the average number of weeks worked in 1921. 'Sixth Census of Canada, 1921: Population, Dwellings,  Families, Conjugal Condition of Family Head, Children, Orphanhood, Wage  Earners. 41. Ibid. 42. Annual Reports. 1918-1929. 43. Mclnnis. 44. The Board received returns representing 9,700 women wage earners in 1921. This compared with census returns in 1921 showing 22,000 female wage earners in the province. Ibid. CHAPTER 4 The Vancouver Price Index, 1901-1929 In t h i s chapter a Vancouver p r i c e index w i l l be constructed. In chapter 2, when the construction of a p r i c e index was discussed i n general terms, i t was noted that p r i c e data, l i k e wage data used i n the construction of a wage index, had to be continuous and consistent. The prices published monthly beginning i n 1910 by The Labour Gazette were acceptable on both of these counts."^ In addition month of December quotations f o r the years 1900 and 1905 that were consistent with the Gazette data were obtained from the 1915 2 report of the Cost of Liv i n g Commission. The 1900 prices were converted to 1901 pr i c e s by assuming constant increase between 1900 and 1905 and di v i d i n g t h i s increase by f i v e to get annual increases. This was done to make the p r i c e index consistent with the wage index whose f i r s t observation was for 1901. Thus p r i c e information was c o l l e c t e d for the enti r e period, although i t was extremely l i m i t e d for the f i r s t decade of the century. The task of constructing a Vancouver p r i c e index would be short i f that which Bertram and Percy compiled for 1901 to 1926 were extended. Their index, of course, was not based on a survey of Vancouver workingmen's expenditure patterns. Also, since t h e i r larger goal was to compile a new national p r i c e index from c i t y p r i c e indexes, they did not make each c i t y index as r e g i o n a l l y s p e c i f i c as possi b l e . Bertram and Percy obtained percentage weights for t h e i r food index from the 1901 expenditure survey published by the United States Bureau of Labour. Their f u e l and l i g h t i n g and clothing sub-group weights were those established by the DBS i n 1926. Their weights for grouping food, f u e l and l i g h t i n g , rent and clo t h i n g i n one index were the Dominion Bureau of S t a t i s t i c s (DBS) estimates of domestic disappearance in 1913. These measured the total domestic consumption of each commodity or group of commodities. The DBS argued that an index number employing this base afforded "an excellent measurement of changes in the average cost of living in the Dominion as distinguished from that of any 3 particular class or section." In taking the food weights Bertram and Percy omitted the weight for fish, perhaps thinking that its consumption was not sufficiently national. Fish price quotations were not available for each city in a l l years. The Department of Labour had apologized for this omission by citing the difficulty of obtaining "representative" prices. In addition, Bertram and Percy used a national electricity index since consistent regional ones were unavailable to them. Ideally a Vancouver price index for the years 1901 to 1929 would have been weighted according to known expenditure patterns for that period. Such 4 a survey, however, was not undertaken for the city until 1937. But rather than accept the national expenditure weights which Bertram and Percy employed it would be preferable to employ an expenditure survey which would more closely approximate Vancouver workingmen's living costs. There were five possible cost of living surveys available for the period under study. A survey of the cost of living in Winnipeg in the 1910s was published in the 1915 report of the Cost of Living Commission. Although no explanation of the inclusion of this budget in the report was given, perhaps it was an example of the kind of study the Department of Labour relied upon in adjusting thell901. American cost of living study to Canadian conditions. But it was difficult to imagine how the Department employed such a survey since the representativeness of the families studied was not specified and the survey lacked detail in its measure of food expenditures.^ Two quantity budgets were presented to the House of Commons Select 76 Standing Committee on Industrial and International Relations in the late 1920s. This committee, largely at member J. S. Woodsworth's urging, was considering minimum wage legislation. Margaret Gould, a research officer for the Canadian Brotherhood of Railway Engineers, presented a budget in 1926. Hers was, in fact, the 1918-19 American Bureau of Labor Statistics' minimum health and decency budget with some modifications. H. A. Logan described the cost of the budget as "too high" since prices had been ob-tained in railway centres where prices were supposedly high. He thought the modifications "controversial" because Gould had first presented the budget to a Board of Conciliation convened under the Canadian Industrial Disputes Investigation Act in 1922.^  Logan felt that since Gould's primary goal in presenting the budget to the Board of Conciliation had been to obtain the high wages that the railway workers wanted, her modifications over-estimated actual living costs. The budget which Harold T. Falk, Secretary of the Financial Federation of the Montreal Council of Social Agencies,.presented to the Standing Committee in 1928 feigned sophistication but lacked i t . His report des-cribed its method in the following way: Mrs. H. M. Jaquays, Miss Grace Towers and Mrs. Andrew Fleming undertook, as a subcommittee, to study a food and clothing budget. The results were arrived at by the most careful estimating of quantities, qualities, varieties and prices of food and clothing. Nothing was done by guess work, experimentation and actual pricing being carried out in every instance. Corner store prices for food were listed, as the majority of families must do their shopping in the district in which they live. Once obtained these results were assessed. The original report of this sub-committee was submitted to the most expert criticism of dieticians, and to the criticism of a l l divisions of the Council. The Chairman of the Standing Committee commended the Council for a "really 77 excellent piece of work," though i t i s far too imprecise to i n t e r e s t an economic h i s t o r i a n today. Beyond t h e i r biases and lack of s o p h i s t i c a t i o n these budgets had the a d d i t i o n a l drawback, as far as t h i s study i s concerned, of not being Vancouver studies. More seri o u s l y , they were quantity budgets. As such, they t r i e d to measure the adequacy of income and were not, therefore, appropriate for s t a t i s t i c a l l y determining the cost of l i v i n g changes. Two cost of l i v i n g surveys did exist for B r i t i s h Columbia. Both were compiled by the B r i t i s h Columbia Minimum Wage Board i n 1918. In that year the Board established minimum wages for women and g i r l s i n mercantile occupations and i n laundry, dyeing and cleaning i n d u s t r i e s . In setting the wages the Board employed cost of l i v i n g forms which i t d i s t r i b u t e d to employees in these occupations. No i n d i c a t i o n was given i n the Board's report as to how t h e i r employee sample was selected, although i n both cases the number of r e -9 turned surveys was small. Moreover, not a l l of the returned forms gave complete information. The minimum wage was set to provide the "prudent, self-supporting" woman with "reasonable comfort." The purpose of the forms was to obtain "estimates" from employees "of the amount required y e a r l y " to obtain t h i s degree of comfort. The two " q u a n t i t y - s o c i o l o g i c a l " budgets derived for mercantile and laundry, dyeing and cleaning i n d u s t r i e s women wage earners could not be used i n the compilation of a Vancouver p r i c e index since they were for women only. However, some use of them w i l l be made i n the f i n a l chapter when women's costs of l i v i n g are compared to men's.*^ One a l t e r n a t i v e set of expenditure weights to the Bertram and Percy weights s t i l l existed. When the American Bureau of Labor published i t s 1901 natio n a l cost of l i v i n g study .it provided separate r e s u l t s f or each of the states surveyed. One of these was Washington state. Because there were 78 enough s i m i l a r i t i e s between Washington and Vancouver economic and demographic conditions, the use of the Washington sub-group and group expenditure pro-portions seemed justified.*"'" " F r o n t i e r " cost of l i v i n g conditions, such as distance from supply and the i n a b i l i t y to achieve s e l f - s u f f i c i e n c y i n many commodities, prevailed i n both l o c a l i t i e s . Washington and Vancouver shared at l e a s t two other f r o n t i e r conditions which could a f f e c t family expenditures. Both had small average family siz e s , 4.10 i n 1901 i n the 12 13 Washington survey f a m i l i e s , and 3.58 i n Vancouver as l a t e as 1921. Both regions had fewer employment opportunities for women and c h i l d r e n than 14 more established parts of the continent. This meant fa m i l i e s were almost completely dependent on the father's income. Also the Washington survey seemed to i d e n t i f y regional f u e l p e c u l i a r i t i e s true of Vancouver that the' Bertram and Percy index did not. The Washington study f u e l sub-group weights gave a higher proportion of expenditure to soft wood and a lower one to bituminous coal than the Bertram and Percy index d i d . This accorded better with the Dominion Department of Labour's evidence about f u e l uses i n B r i t i s h Columbia. F i n a l l y , there was a problem with Bertram's and Percy's use of DBS group weights based on domestic disappearance. These rates included the expenditures of upper and middle cl a s s f a m i l i e s and not j u s t workingmen's f a m i l i e s . On t h i s count, then, the Washington cost of l i v i n g study, based as i t was on working class expenditures, may be superior to the Bertram and Percy index. However, a Vancouver p r i c e index employing Washington survey weights would share two flaws with an index using Bertram's and Percy's weights. In the f i r s t place, both the Washington and the Bertram and Percy proportions were derived from surveys which d e l i b e r a t e l y excluded f a m i l i e s of non-European 79 origin. As such Vancouver's sizeable population of Asian origin would be ignored by both indexes. Secondly, the food component of the Bertram and Percy index, and a l l components of the other one, were American. In the absence of any suitable national food expenditure survey, Bertram and Percy justified their use of the American food weights by arguing that: since Canadian industrialization and incomes have historically lagged behind American levels, food subgroup weights based on 1901 expenditure patterns of American urban workingmen could easily reflect expenditure patterns of Canadian urban workingmen in 1913 [the midpoint of their period of study. The argument for using the Washington survey in the compilation of a Vancouver price index can only repeat this justification plus that based upon the economic and demographic conditions in Washington and Vancouver. The two sets of group and sub-group expenditure weights thus obtained, and given in Table 6, showed that differences existed between the two groups of families surveyed. The Washington survey group weights suggested that the subjects of the study were poorer because they alloted a higher pro-portion of income to food than did the subjects of the survey which Bertram and Percy used. Y^t the food sub-group weights did not present so clear a distinction. The Washington families spent proportionately more for fresh vegetables and fruit while the other families consumed relatively more meat and dairy products. Were the Washington families' expenditures on food evidence of higher subsistence spending, as defined by Engel's Law? Or could some pf thefood expenditures be construed as luxury spending? Or was there some other explanation of the high proportion spent on food? The answer is by no means clear. It is also unclear which survey accorded best with Vancouver working class expenditures. In this impasse nothing more can be done than to compile two Vancouver price indexes, one based on the Washington survey weights and the other based Table 6 II. Implicit*Sub-Group and Group P r i c e Weights Revised Bertram and Percy"'" Washington weight I. GROUP WEIGHTS Food 43.8 52.5 Fuel and Light 8.7 6.8 Rent 22.5 22.7 Clothing 25.0 18.0 100.0 100.0 SUB-GROUP WEIGHTS 1. Food Fresh Beef 17.2 18.5 Fresh Port 4.8 1.1 Salt Port Products 4.8 4.2 Vea1/Mutton/Lamb 3.4 2.1 Fi s h 2.8 2.8 Eggs 5.8 2.6 Milk 7.3 5.0 Butter 9.9 11.4 Cheese 0.9 0.3 Lard 3.2 1.6 Tea v 1.8 . 0.7 Coffee 3.7 2.8 Sugar 5.4 5.2 Flour and Meal 5.9 3.2 Bread 4.3 4.0 Rice 0.7 0.2 Potatoes 4.5 2.9 Other Vegetables 6.5 14.7 F r u i t 5.7 16.2 Vinegar 1.4 0.5 100.0 100.0 2. Fuel and Light coal (bituminous) 64.6 46.4 wood (soft) 19.5 36.1 e l e c t r i c i t y or coal o i l 15.9 17.5 100.0 100.0 1. Bertram and Percy, "Preliminary Research Report on Wages i n Canada," p. * Weights for sundries have been reapportioned among the remaining weights. on the Bertram and Percy expenditure weights. The latter proportions have been revised here by adding a sub-group weight for fish; their index was further changed by including a provincial electricity rather than a national electricity index. If both Vancouver price indexes thus constructed seem to present a confused picture of the degree of subsistence and non-subsistence spending, it is hoped that both price indexes reflect something of Vancouver working class expenditures, and that the "true" or "ideal" Vancouver price index lay between them. Once expenditure weights had been selected a l l that remains is the in-16 dexing of Vancouver prices. A quarterly price index for 1910 onwards was compiled. The data existed in The Labour Gazette for the construction of a monthly price index but visual inspection of month to month price changes suggested that a quarterly index would not seriously obscure month-to-month variations. Each item was indexed with the average price for 1913 being taken as the base. The individual indexes were weighted together into sub-group indexes. The twenty-eight food items formed the food index. To the index numbers for soft wood and bituminous coal was added, the Dominion Bureau of Statistics yearly electricity index for British Columbia to form the fuel and.light index.^ The index of the rent of a six-roomed house in a typical workingmen's district was the only item in the housing index since two out 18 of three households lived in rental accommodation in 1921. . The Department of Labour did not have a clothing index until late in the period of study. Bertram and Percy, however, compiled their own index by joining the DBS clothing index that began in 1913 to an index for the same items with prices which they 19 obtained from Eaton's catalogues. (It would have been preferable to compile a clothing index with Vancouver prices but consistent and continuous catalogue data i s not available.) Ultimately, these four sub-group indexes were combined into an aggregate cost of l i v i n g index. Two aggregate cost of l i v i n g indexes, one using revised Bertram and Percy weights, and the other using Washington weights are given i n Tables 7 and 8. The two p r i c e indexes do not d i f f e r > s u b s t a n t i a l l y from one other. It does seem that p r i c e s increased le s s proportionately i n Vancouver than n a t i o n a l l y . (See Table 9.) The Washington-weighted index did begin at a lower point and end at a higher point than the revised Bertram and Percy index. However, the patterns of the two indexes were remarkably s i m i l a r . Both indexes di v i d e into f i v e d i s t i n c t periods. Prices increased between 1901 and the l a s t quarter of 1911. There were considerable f l u c t u a t i o n s i n prices i n 1912 and 1913, however, following which a marked downturn occurred i n 1914 and 1915. Prices increased s u b s t a n t i a l l y from the fourth quarter of 1915 to the second quarter of 1920, when the highest point f o r the period was reached on both indexes i n d i c a t i n g the highest p r i c e s in the whole period of study. During the next quarter, however, prices f e l l sharply and continued to f a l l u n t i l the end of 1923. From then u n t i l the end of 1929 prices increased slowly with periodic downturns i n 1924, 1925, 1926 and 1927. At various times some prices on the i n d i v i d u a l food, f u e l and.lighting, rent and cl o t h i n g indexes were more v o l a t i l e than others. Between 1901 and 1911 the rent index was the most dynamic jumping from 55.4 to 143.6 (compared with increases i n the aggregate indexes from 80.2 to 112.8 for the revised Bertram and Percy index and from 76.4 to 113.7 for the Washington weighted index.) In the depression that followed rent returned to i t s former l e v e l reaching 53.3 i n the fourth quarter of 1915, During the period of wartime i n f l a t i o n food prices increased the most. The revised Bertram and Percy index jumped from 98.3, i n the fourth quarter of 1915, to 243.8, i n the second Table 7 Revised Bertram and Percy Pric e Index f or Vancouver, 1901-1929 average 1913=100 March June September Decembei 1901 80.2 1905 84.0 1910 107.6 98.0 97.4 107.7 1911 101.0 108.9 104.1 112.8 1912 109.5 106.1 102.7 99.2 1913 95.1 102.2 103.6 98i8 1914 97 .8 100.6 96.8 92.5 1915 92.1 93.4 90.0 92.5 1916 95.3 97.4 96.2 103.8 1917 114.8 125.1 127.2 127.7 1918 140.4 150.7 152.2 152.0 1919 155.5 161.6 167.7 168.0 1920 187.5 206.4 183.3 176.2 1921 159.0 149.9 149.0 144.8 1922 138.1 137.7 128.8 136.8 1923 137.5 138.3 136.7 137.9 1924 138.1 135.3 136.2 139.1 1925 141.0 138.5 138.0 141.2 1926 139.5 138.3 136.8 136.5 1927 135.9 137 .2 134.8 135.2 1928 133.8 135.1 137.4 137.6 1929 139. :0 140.7 141.7 143.4 Table 8 Washington-Weighted P r i c e Index f or Vancouver, 1901-1929 average 1913=100 March June 1901 1905 1910 106.0 97.1 1911 101.6 109.8 1912 110.6 107.4 1913 95.5 101.5 1914 97.3 103.6 1915 94.0 94.9 1916 98.1 102.0 1917 115.4 130.4 1918 147.6 159.4 1919 158.9 168.0 1920 189.4 201.0 1921 157.7 145.1 1922 139.7 139.4 1923 139.8 139.3 1924 137.3 134.5 1925 139.6 136.7 1926 138.4 135.8 1927 134.7 135.2 1928 132.7 136.5 1929 143.1 143.2 September December 76.4 80.8 95.9 106.2 105.7 113.7 104.2 101.0 103.1 99.8 98.5 93.3 92.5 96.2 98.2 107.4 137.1 135.2 161.7 157.4 178.2 173.2 181.8 172.4 145.4 141.6 140.3 137.9 137.4 136.8 133.2 136.8 136.5 138.6 134.8 132.6 132.1 132.3 138.6 138.8 143.7 146.0 85 Table 9 National Price Indexes 1913=100 (1) (2) Bertram and Percy Department of Labour Index Index 1901 76.5 71.0 1905 82.0 78.2 1910 92.2 91.2 1911 94.2 92.7 1912 98.8 98.3 1913 100.0 100.0 1914 98.0 102.0 1915 102.6 98.7 1916 120.3 105.4 1917 142.7 129.4 1918 155.8 147.2 1919 169.3 158.1 1920 187 .2 184.7 1921 157.3 161.9 1922 150.0 148.9 1923 151.5 150.2 1924 151.3 147.6 1925 155.2 150.2 1926 150.9 153.1 1927 . . . 151.2 1928 . . . 151.7 1929 154.1 Source: Bertram and Percy, "Real Wage Trends in Canada," p. 306. Urquhart and Buckley, Series J128-131.—Price index numbers of a family budget (Department of Labour) 1900 to 1939. 86 quarter of 1920. The Washington weighted index increased from 106.2 to 231.9 for the same period. In the downturn from 1920 to 1923 food p r i c e s declined more than other prices f a l l i n g from 243.8 to 131.4 and from 231.9 to 137.9 for the two indexes. Rent, according to the estimates used i n t h i s paper, did not change from 1920 to the end of the period. Clothing prices continued to decrease even a f t e r the 1920 to 1923 p r i c e recession, and f u e l and l i g h t i n g costs also continued to f a l l a f t e r 1923. Other commodity p r i c e changes could be seen when the food and f u e l indexes were examined i n d e t a i l . During the period of war and post-war i n f l a t i o n pork, smoked port products, l a r d , sugar, f l o u r , r i c e , potatoes, dry beans, dried f r u i t , beef and butter experienced considerable p r i c e increases. That these items increased so much was not s u r p r i s i n g given the export and m i l i t a r y de-20 mand for them. The f u e l index examined i n d e t a i l showed that both e l e c t r i c i t y and soft wood pr i c e s were lower i n 1920 than i n 1913 and dropped to even lower l e v e l s throughout the 1920s. In 1920 bituminous coal prices were s u b s t a n t i a l l y above 1913 l e v e l s but they declined through the early and mid-1920s, though never to 1913 l e v e l s . In 1927 they began to increase again. The combined ef f e c t of these prices was a f u e l index which declined through the 1920s but l e s s than either the e l e c t r i c i t y or soft wood indexes. Although the revised Bertram and Percy p r i c e index and the Washington-weighted p r i c e index did not vary i n pattern or d i r e c t i o n the former was higher than the l a t t e r u n t i l 1928. Since the two indexes r e l i e d upon i d e n t i c a l rent and clothing index components, the v a r i a t i o n was a function of s l i g h t d i fferences in the food and f u e l indexes and the d i f f e r e n t group weights. The revised Bertram and Percy food index began at 81.0 and ended at 155.0 and the Washington weighted food index began at 77.5 and ended at 160.0. .87 However the first index showed a greater spread from low to high points during the period of war and post-war inflation, roughly from the third quarter of 1915 to the second quarter of 1920. It rose from 98.7 to 243.8 while the Washington-weighted index rose from 105.2 to 231.9. For most of this period of inflation the Washington-weighted food index actually was higher than the revised Bertram and Percy food index, a function of the greater proportion it alloted to commodities experiencing military and export demand, but the latter made spectacular jumps in 1920. These increases can be attributed to the greater weight given in the revised Bertram and Percy index to sugar and potatoes, two commodities which increased greatly in price. The two fuel indexes had different spreads from first to last observation. The revised Bertram and Percy index began at 78.3 and ended at 120.3 while the other index began at 70.1 and ended at 109.2. This was because the revised Bertram and Percy index gave a greater weight to bituminous coal, 64.6% compared to 46.4% for the Washington-weighted index. And since coal, unlike soft wood and electricity, did not decline from its 1913 price level, the index weighting coal more heavily was higher than the other. A further check on the validity of the two price indexes is their corres-pondence with the existing qualitative record of Vancouver price changes given by the correspondents to The Labour Gazette, newspapers, commissions of investi-gation, and other contemporary observers. In the first period of inflation from 1901 to 1911-12, when the two price indexes climbed thirty points or more, most references referred to increasing prices. Price reports for 1907-8 were mixed and, unfortunately, price index numbers were not available for these years. In April and May of 1908 the Gazette noted that prices remained high except for 21 decreases in flour, eggs, milk and butter. Summary reports in the journal noted price decreases in 1907, however, and "stationary or easier conditions" 88 i n 1908."^ In March of 1908 the Vancouver correspondent observed that because of increases i n the p r i c e of bakery bread i n a time of recession "the working 23 people. . .are baking t h e i r own bread." The greatest outcry about p r i c e i n f l a t i o n came i n the early months of 1912. E a r l i e r i n 1910, The Labour Gazette reported that a number of workingmen 24 had to sublet part of t h e i r houses i n order to keep up with house rents. From early 1912 u n t i l the summer a barrage of a r t i c l e s and e d i t o r i a l s appeared i n the Vancouver Sun and the Vancouver Province condemning cold storage operators for hoarding meat, and produce warehousemen for combining to drive up p r i c e s . C i t y councilmen and trade union leaders urged housewives to form food purchasing cooperatives as a means of combatting these excesses, and c a l l e d upon various l e v e l s of government to investigate p r i c e s . On the other hand, the cold storage operators and warehousemen defended themselves against charges of v i l l a i n r y by c i t i n g consumer extravagance, waste i n food prepar-ation, unreasonable consumer demands for l e t t u c e and green onions i n January, 25 and the shrinking number of people w i l l i n g to farm. In retrospect the cold storage operators and warehousemen may have been correct i n t h e i r point that people i n Vancouver expected a higher standard of ..living than they had had i n former times. The p r i c e indexes showed that prices had already peaked by 1911. It was not s u r p r i s i n g , then, that the furor died down by the summer of 1912. Sub s t a n t i a l l y l e s s comment was made about prices during the depression which followed when the p r i c e indexes dropped s u b s t a n t i a l l y though not to t h e i r 1901 l e v e l s . The f a l l i n rents was a source of frequent comment. In October of 1913 the correspondent to The Labour Gazette noted a large number of empty houses for rent i n the c i t y , a r e s u l t of the exodus of workingmen. 89 He said: for the first time in years rents have dropped, and dwelling houses of a l l kinds can be obtained for from $5 to $10 per month cheaper than last year. This is very significant and of a l l statistics which might be cited to prove the depression which prevails this is one of the most definite.^6 Employers cited their own declining revenues and a lower workingmen's cost of living as reasons for wage cuts. But when this argument was made in the British Columbia Electric.Railway dispute in 1915 Fred Hoover, representing the Street Railwaymen's Union,.retorted that he could produce figures which 27 would show that living costs had not changed. Had they been produced, these figures would presumably,have contradicted the two price indexes compiled here. Prices did not begin to increase in Vancouver until late 1915 when wartime economic activity picked up in the city. The price indexes recorded the doub-ling of prices by 1920. Once again local newspapers began to assail the villains they had identified in the earlier period of inflation. The correspondent to 28 The Labour Gazette had noted sharp price increases when war broke out. If the price data going into the compilation of the price index was correct, though, this increase was very short term. The Department of Labour attri-buted wartime inflation to allied.and national military demands for wheat, flour, cheese,. meats, oats and butter. As well, nations cut off from normal 29 supply sources relied on Canada for these goods. The Department of Labour explained the phenomenal increases after 1916 in bread and flour prices, for example, to a large wheat crop in. 1915 which stalled the rise of prices until the summer of 1916 when there were crop failures. The Dominion Government had.only limited powers to regulate prices during the war. Orders-in-Gouncil were issued which!made it illegal to raise the •'.90. p r i c e of n e c e s s i t i e s by r e s t r a i n i n g t h e i r trade."'" Food and Fuel Controllers were appointed by the federal government to consider reports of such r e s t r a i n t s , but t h e i r powers to act were l i m i t e d . The Canada Food Board, established i n the l a t t e r part of the war, took over these functions. It went somewhat further, ordering r e s t r i c t i o n s on home canning, and placing l i m i t s on f l o u r and sugar consumption. But nore of these wartime regulatory agencies had very 31 much r e a l power. They could only make any evidence known to the f e d e r a l 32 Department of J u s t i c e , and could not themselves prosecute. Even t h i s f i r s t step was u s u a l l y avoided, for the Controllers and Board depended on producers' and s u p p l i e r s ' need for public good, w i l l to keep them from r a i s i n g p r i c e s too 33 much. John Herd Thompson has argued quite convincingly that the Borden government was anxious not to become deeply involved i n c o n t r o l l i n g p r i c e s . P r i c e controls could have led to increased domestic consumption and, there-34 fore, decreased supplies a v a i l a b l e f o r export or m i l i t a r y needs. A f t e r the war the Board of Commerce, which extended t h i s form of p r i c e regulation, was found u l t r a v i r e s the f e d e r a l government by the J u d i c i a l Committee of the 35 Privy Council. The q u a l i t a t i v e record of p r i c e changes i s sparse a f t e r 1919. Only the occasional reference to the cost of l i v i n g appeared, although The Labour  Gazette!continued to discuss prices each month i n i t s p r i c e surveys. This record accorded quite well with the p r i c e indexes compiled which showed p r i c e declines between 1920 and 1923 and only moderate increases from 1923 to 1929. Thus the Vancouver p r i c e indexes were consistent with the other evidence of p r i c e changes a f f e c t i n g workingmen's f a m i l i e s . The p r i c e indexes were more useful than q u a l i t a t i v e evidence alone since they give more than a general impression of when p r i c e changes occurred. Examined i n conjunction ,91" with the non-quantitative record, the p r i c e indexes proved to be more se n s i t i v e to c y c l i c a l and seasonal economic f l u c t u a t i o n s than did the Vancouver wage index. The next step to take i s to examine the impact of these p r i c e f l u c t u a t i o n s on Vancouver workingmen's wages. This i s the subject of the f i n a l chapter, i n which the p r i c e indexes are used to d e f l a t e the wage index. 92 Notes 1. The Labour Gazette conducted some trial runs of price data collection in November of 1900, 1901, and 1903. This data was not used, however, because the Department of Labour admitted that problems were experienced in specifying grades of items. LG 3 (Apr 1903):779. 2. Coats explained that these prices were secured from books of retailers who had supplied the correspondents of The Labour Gazette after 1910. Report of the Board, 1915, vol. 2, p. 72. 3. For a discussion see Dominion Bureau of Statistics, Prices and Price  Indexes, 1913-1928, p. 182; and Bertram and Percy, "Real Wage Trends in Canada." 4. Family Income and Expenditure in Canada 1937-1938. 5. Report of the Board, 1915, vol. 1, p. 9. 6. Minutes of Proceedings and Evidence, 18 May 1926. 7. Logan, pp. 150-1, 152n. 8. Minutes of Proceedings and Evidence, no. 14, 15 May 1928, p. 213. 9. The returns of twenty-nine employees were used when the minimum wage was set for mercantile occupations, and the returns of thirty-seven employees were used when the minimum wage was set for laundry, dyeing and cleaning industries. Annual Reprot, 1918-1930. 10. The Board set wages for the following industries: public housekeeping, office occupations, personal service (hotels and restaurants), fishing (canning), telephone and telegraph, fruit and vegetable canning, and manufacturing. 11. Eighteenth Annual Report of the.Commissioner of Labor, 1903. The Washington survey did not give subgroup weights for fuel other than one weight for fuel and one weight for lighting. In order to obtain a fuel and lighting breakdown a later expenditure survey was used. United States, Department of Labor, Bureau of Labor Statistics, Cost of Living  in the United States, Bulletin No. 357, 1924. This cost of living survey gave specific expenditure weights for gas, electricity, soft wood, and bituminous coal for the cities of. Spokane, Seattle, and Everett, pp. 334-91. The city data was weighted together according to their respective populations to obtain Washington weights. United States, Department of Commerce, Bureau of the Census, Fourteenth Census of the United States, 1920: Population, 1:312. The weights for fuel and lighting derived therefore were 46.4 for bituminous coal, 36.1 for soft wood, and 17.5 for electricity. Gas was omitted since gas price information was not available for the whole period of study. ,93 12. Eighteenth Annual Report of the Commissioner of Labor, 1903, p. 362. 13. Sixth Census of Canada, 1921; Population. Dwellings, Families, Conjugal  Condition of Family Head, Children, Orphanhood, Wage Earners, 3:59. 14. "Work Force by Age, 1911-1961—Males and Females—Canada and British Columbia," Mclnnis; and Eighteenth Annual Report of the Commissioner  of Labor, 1903, p. 252. 15. Bertram and Percy, "Real Wage Trends in Canada," p. 303. 16. No major problems were encountered in compiling The Labour Gazette price data for Vancouver into an index. There was a short gap in the collection of the price data, between June 1912 and October 1912. To approximate prices for this interval a constant month by month increase was assumed between the June and October prices. Not a l l of the price data available for each month was used. At different times prices for over 100 items were available. Instead the l i s t of food items used by Bertram and Percy and given in the Washington survey were,used. Where more than one grade was given for an item, for example, creamery prints butter and dairy tubs butter, only one grade was used. As Bertram and Percy noted the various grades were close substitutes for each other, and, therefore, their price changes were similar. Bertram and Percy, "Preliminary Research Report on Real'Wages in Canada," p. 46. 17. LG 23 (Dec 1923) :1442; Prices and Prices Indexes, 1913-1928, p. 264; Prices and Price Indexes, 1913-1930, p. 200. 18. Sixth. Census of Canda, 1961: Population. Dwellings, Families, Conjugal  Condition of Family Head, Children, Orphanhood, Wage Earners, 3:55, 59. 19. For a discussion of their procedure see Bertram and Percy, "Preliminary Research Report on Real. Wages in Canada" pp.59-60. 20. Between the third quarter of 1915 and the second quarter the following food index changes occurred: pork increased from 76.6 to 185.1, smoked pork products increased 96.8 to 213.9;. lard increased from 8.8.0 to 187.7; sugar increased from 114.7 to 321.7; flour and meal increased from 104.6 to 237.0; rice increased from 7.8.4 to 294.1; potatoes increased from 59,3 to 1422.9; dried beans increased from 138.9 to 333.3 in the third quarter of 1917; dried fruit increased from.124.4 .to 284.3; beef increased from 87.7 to 166.3; and butter increased from 87.1 to 176.9. 21. Few. local Vancouver rpeorts were given in The Labour Gazette although various national reports, whatever national means, were given. The real problem here is that we do not know:how regionally specific.markets in Canada were. LG 8 (May 1908):1268; LG 8 (June 1908):1387. 22. "Industrial and Labour Conditions in Canada," LG 8 (Jan 1908):809; "Industrial and Labour Conditions in Canada," LG 9 (Jan 1909);709-25. 23. LG 8 (April 1908) :1219. 94 24. LG 11 (Aug 1910) :182. 25. The Vancouver Sun, February to March and June to July, 1912 and the Vancouver Province, March to A p r i l , 1912. 26. LG 14 (Nov 1913) : 550. 27. "Cost of L i v i n g i s Reduced i n C i t y , " Vancouver Province, 20 July 1915, p. 16. 28. LG 15 (Sept 1914) :366. The outbreak of war supposedly was marked by increases i n the prices of f l o u r , r o l l e d oats, beans, r i c e , prunes, sugar, coffee and coal o i l though meat was not a f f e c t e d . 29. "Prices i n Canada during 1914," LG 15 (Jan 1915):818-21. 30. "Government Regulation of Prices during the War," LG 17 (May 1917) :408. 31. "The Canada Food Board," LG 18 (March 1918) :224. 32. Ib i d . 33. "Order-in-Council Respecting Prices of Necessaries of L i f e , " LG 16 (Dec 1916):1848-51. • 34. Thompson, The Harvests of War: The P r a i r i e West, 1914-1918 (Toronto: McClelland and Stewart, 1978), pp. 158-60. 35. I t was held that while "the subjects of undue combination and hoarding" might well be a matter f o r the Dominion government to consider i n war-time, "interference on such a scale as the Statutes i n controversy i n -volved with the property and c i v i l r i g h t s of the inhabitants of the provinces" wasuncalid for i n "normal conditions". LG 21 (Dec 1921):1508. CHAPTER 5 The Vancouver Real Wage Index, 1901-1929 In this chapter a real wage index for Vancouver is established. Although the money wage index and price index have been usefully examined separately, for the purpose of interpreting the standard of living in Vancouver they must be examined together. Combined they show the effect of price changes on working class incomes. It is also possible to check this real wage index against other indicators of real wages in British Columbia and in Canada, including qualitative evidence. Certain adjustments must be made to each of the indexes before they can be collapsed into a single real wage index. Most obviously, the wage and price indexes are not completely compatible. After 1910 the price indexes are quarterly; before 1910 only December 1901 and 1905 observations are available. The wage index is a yearly series commencing in 1901. The wage index can be deflated by the price information in two ways. Month of December price index numbers could be taken for the years 1901, 1905 and 1910 to 1929 and then used to deflate the wage index for the same years. The advantage of this procedure is that price data for the years after and in-cluding 1910 is consistent, in terms of month of observation, with the 1901 and 1905 information. This was the method chosen by Bertram and Percy when com-piling their national real wage index. The alternative method is to average the quarterly price index numbers for each of the years from 1910 onward, and use these yearly averages to deflate the yearly wage index observations. The advantage of this method is that the greater frequency of observations from 1910 onward is not sacrificed because observations in the earlier years were infrequent. (Of course, the 1901 and 1905 data was not completely consistent with the other years' data because the 1901 and 1905 observations are for December and not annual averages.) 96 This latter method was preferred because a yearly average would reflect variations in a year that a December observation would be less likely to represent. But it was decided to construct two separate indexes according to both methods in order to see what differences there would be. With two price indexes to begin with, the revised Bertram and Percy and the Washington-weighted, this meant the construction of four real wage indexes in total. For a l l the differences in their construction the four real wages indexes agreed remarkably in their interpretation of the behaviour of working class real wages. All four indexes are given here in Table 10. Graphs of two of the indexes are given here in Figures 1 and 2. All increased some twenty points between 1901 and 1929. Real wages increased until 1905 and then dropped by 1910 reaching a low point in 1911. They then increased reaching a peak in 1915 and then dropped. According to the revised Bertram and Percy real wage indexes real wages bottomed out in 1919 and 1920; according to the Washington indexes real wages reached low points in 1918. The lag in the yearly revised Bertram and Percy index suggested that the index constructed from month of December data picked up a change in real wages that began in the end of 1919 and was not reflected in the yearly averaged index until 1920. And it seems that the trend was an "abnormal" increase in sugar and potato prices. Real wages climbed steadily to the end of the 1920s although they receded somewhat between 1924 and 1925. The revised Bertram and Percy indexes showed a peak in 1928 while the Washington-weighted indexes showed one in 1927. When the four indexes were compared with the existing national Department of Labour and Bertram and Percy real wage indexes, given here in Table 11, some differences appeared. For example, between 1901 and 1913 the Department of Labour index showed a slight decline. As Bertram and Percy have noted, this evidence was not consistent with "the historical evidence on population flows 97 : Table 10 Vancouver Real Wage average Indexes, 1901-1929 1913=100 RWA1 DRWA2 RWB3 DRWB 1901 93.0 93.0 97 .6 97.6 1905 96.2 96.2 100.0 100.0 1910 91.1 86.8 92.4 88.1 1911 91.1 86.2 90.3 85.5 1912 95.5 100.4 94.2 98.6 1913 100.0 101.2 100.0 100.2 1914 103.6 108.6 102.3 107.6 1915 105.4 104.8 102.7 100.8 1916 104.3 98.6 100.9 95.3 1917 90.4 87.5 86.3 82.7 1918 89.7 87 .8 85.3 84.8 1919 90.2 87.6 86.8 84.9 1920 87.5 93.6 88.5 95.6 1921 104.8 109.1 107.2 111.6 1922 108.0 108.9 107.2 108.0 1923 112.4 112.2 111.8 113.0 1924 113.9 112.3 115.3 114.2 1925 113.0 111.8 114.5 113.9 1926 116.8 117.9 118.8 121.3 1927 121.2 121.7 123.2 124.4 1928 122.2 120.8 121.6 119.7 1929 118.4 116.5 116.0 114.4 4 1. Revised Bertram and Percy index, yearly average prices. 2. Revised Bertram and Percy index, month of December prices. 3. Washington-weighted index, yearly average prices. 4. Washington-weighted index, month of December prices. op Table 11 National Average Real Wage Indexes 1913=100 (1) (2) Department of Labour Bertram and Percy Index Index 1901 102.7 89 .8 1905 105.7 95 .0 1910 104.9 98 .0 1911 101.5 99 .7 1912 99.0 97 .7 1913 100.0 100 .0 1914 99.2 104 .1 1915 103.3 101 .5 1916 103.4 91 .5 1917 96.7 85 .5 1918 99.7 90 .0 1919 109.1 100 .8 1920 111.0 110 .2 1921 115.6 121 .9 1922 117.2 120 .2 1923 119.3 122 .8 1924 123.0 124 .1 1925 119.6 120 .4 1926 118.1 124 .6 1927 122.2 . . 1928 123.3 1929 123.4 Source: Bertram and Percy, "Real Wage Trends in Canada," p. 307. Column 2 obtained by dividing Column 1, Table 5 by Column 2, Table 9. F i g . 1: Index Numbers of Real Wages, Revised Bertram and Percy Index, 1901-1929 0 J 1 1901 1905 1910 1915 1920 1925 1929 F i g . 2: Index Numbers of Real Wages, Washington-Weighted Index, 1901-1929 and economic growth for the period. .. ..." Proponents of the displacement theory have relied upon this kind of evidence. Bertram's and Percy's national index showed a significant increase over the period and, thus, 2 seemed to challenge the displacement theory. The indexes compiled for Vancouver, despite having been constructed according to Bertram's and Percy's methods, decreased somewhere between 1905 and 1910. Therefore, the Vancouver real wage indexes seem to recommend rather than challenge the displacement theory. Many features of the indexes compiled in'.this paper were borne . out by contemporary qualitative data. In 1903 Arthur Bulley of the British Columbia Steamshipmen's Society testified to the federal Royal Commission on Industrial Disputes in the Province that "taking into consideration the cost of living. . 3 the fact of what your money will .buy is about the same as in Montreal." A comparison of the Vancouver real wage indexes between 1901 .and 1905 with the national ones indicates that wages in Vancouver kept pace with prices about as well as those elsewhere. In the discussion of the Vancouver price indexes i t was noted that most complaints about the high cost of living were made in 1912 when prices peaked. Real wages declined in the city in 1910 and, 1911 from the 1905 position. Although money wages increased in 1910 and 1911, they did not keep pace with price increases. In such circumstances even skilled workmen with considerable job security felt the pinch of higher living costs. A representative of the carpenters' union testified before the provincial Commission of Labour in 1914 that any.interruptions to work, such as a strike, put them in a very precarious position: 102 Undoubtedly hundreds have a lot, and possibly a house and lot, and they can't stand a month's strike because they would be up against the next payment. I know from my own personal experience. I was business agent of the carpenters' organization with pretty nearly eight hundred people when a strike came on and i t wasn't three weeks before the executive officers were at their wits' end to get money to finance the next'payment. The next payment became a night mare with us. That, I believe, is the position of hundreds of men in the city. 4 The Commissioners considered such statements proof of an improving Canadian standard of living. As the Commissioner's report observed, "the luxuries of former days are now becoming to be considered the necessaries of a well-regulated household.""' The Vancouver real wage indexes showed an increase in real wages from 1912 until 1915, a period of depression. Since they depicted the positions of skilled workmen who were able to maintain their employment, this meant that these skilled workmen were able to take advantage of declining prices. In their discussion of British real wages Deane and Cole made a finding similar to this. They observed that between 1800 and 1850 real wages rose not so much because wages rose but because when they f e l l they f e l l less than prices did. Of course, large numbers of people in Vancouver, skilled and unskilled, were unemployed between 1912 and 1915. A representative of the Trades and Labour Congress testified to the Commission on Labour in 1914 that there was at least 25% more labour in British Columbia than was needed. The unorganized element walk along Powell and Carroll Streets. Go there between seven and eight o'clock and you will see the streets jammed with people scanning the boards of employment offices in search of employment. If you want. . .forty or fifty men of almost any trade, you can find them making their headquarters [at the Labor Temple.]6 Typically the large supply of immigrant labour was blamed for making already depressed labour conditions worse for the "Canadian" worker. H. Paper of the Longshoremen's Union complained that: For the last two years there has been a great influx of Italians and Russians. Up to a year ago we used to do a l l the work on the Evans and Coleman wharf t i l l we asked for more money. Then they employed Italians and Russians at twenty-five cents an hour. [His pay had been forty to fifty cents an hour.] The Italians live on macaroni and the Russians on salt herrings and a piece of bread, and that is impossible for us. It costs me $9 a week to live for room and board.^ For many working people underemployment pared real wages significantly despite the fact that they continued to work. For example in 1915 many Vancouver skilled tradesmen took wage cuts, a fact borne out by the decline in the money wage index. In 1915 Fred Hoover of the Street Railwaymen's Union testified that because of the depression working time was cut and, therefore, street railway workers made less. The maximum possible earnings for conductors under such circumstances, he stated, were $766 per year; $1233, g he argued, was needed for a working class family to live "decently". The behaviour of the real wage indexes between 1912 and 1915 corresponds to the position of workers who maintained their employment and benefited from lower prices. However, the qualitative evidence drawn upon suggests that the indexes give a misleading interpretation of the condition of the unemployed and short-time workers during this time. A comparison of a Les Peyres type cost of living budget with earnings reported by the census can be made to show that the standard wage position of skilled workmen does not necessarily reflect the positions of workingmen who 9 were not skilled, or who did not enjoy full-time employment. Census earnings, unlike those represented in the wage index, make allowance for short-time and unemployment since they give total earnings in a year. A Les Peyres budget for Vancouver can.be constructed using the Department of Labour's price data and their Les Peyres weights. The incompleteness of this budget has already 104 been discussed. But the absence of clothing and sundries from the budget can be allowed for by making the known parts equal to sixty per cent of total expenditures. (This is approximately what they represented in the revised Bertram and Percy index.) The cost of a Les Peyres budget, calculated in this fashion, in December of 1921 was $35.17 per week. The average wage according to the wage index of $34.99 nearly covered this, but the average wage in 1921 according to the census of $24.61 did not. Moreover, the wage reported in the census was based on a 44.5 week year, not a f u l l -time year. Records of women's wages in the province showed that their wages were far from capable of affording the Les Peyres budget. The minimum Wage Board reported an average wage for women of $17.12 in 1921."'"^  Members of the provincial Board did not believe that women usually supported or should support anyone but themselves. Hence, the Board did not use the Dominion Department of Labour family budget. Accordingly, when calculating minimum wage standards for women, the Board used the budgetary estimates that would permit a single woman to live decently. In 1918 the minimum costs of living were estimated for mercantile employees and for laundry, dyeing and clothing workers. The weekly budgets arrived at were $16.81 and $14.85. At the same time the Board noted that the average weekly wages of women in these occu-11 pations were $12.71 and $11,80, well below those i t regarded as minimally acceptable. This discussion of the Les Peyres budget suggests that, while the standard wages of skilled workers were capable of purchasing a budget whose level of subsistence is unknown, the wages of unskilled workers and women were not. Does this mean that the Vancouver real wage indexes compiled in this paper give misleading notions of the real wage positions of the Vancouver 105 working class? Only if the indexes are not viewed with some care. In the first place the Les Peyres budget is a flawed measure. Although it can show the dollar value of a cost of living budget i t is, as has been suggested, a budget which makes no allowance for substitution. In addition, it represents the expenditures of a family of five, a husband, a wife, and three dependent children, an expensive phase in the l i f e cycle of the family. The budget most likely over-estimates the expenditures of families in Vancouver, where in 1921 the average family size was 3.58, although the number of family members supported outside the community is unknown. This size may even have been an increase from previous years since the sex ratio had decreased from 12 150.2 in 1911 to 113.2 in 1921. A major flaw, then, in the work done by Copp and Piva, as discussed in chapter 2, is that they used the Department of Labour's Les Peyres budget to measure adequacy of incomes. Of course, the revised Bertram and Percy Vancouver real wage index is also flawed because its price index component employs the expenditure weights of this same standard family of five. The Washington-weighted index is somewhat superior in this regard since the average size of the families surveyed by the Washington cost of living survey was 4.10. In any event i t seems much more justifiable to use the expenditure percentages of the standard family than to estimate their actual quantities of consumption. The percentages are not likely to be as far from the ideal percentages as the quantities are from the ideal quantities. Secondly, the Vancouver real wage indexes clearly correspond to the positions of some working people who, despite steady employment, felt their wages undercut by the inflation that attended rapid economic expansion. These same people benefitted when prices f e l l . However, when deflation was too 106 severe they suffered either by having hours or wages cut, or by l o s i n g employment. In the end i t would seem that, being organized and s k i l l e d , these workers benefitted in a period of more moderate economic expansion, l i k e that of the 1920s, when wages increased slowly but more r a p i d l y 13 than prxces. The r e a l wage increases of the 1920s account f o r most of the increase experienced i n the whole period of study. Ostry has argued that "the greatly improved r e a l wages of Canadian workers today compared with 1900 are a t t r i -butable mainly to a decided improvement i n r e a l p h y s i c a l output per unit of 14 imput i n Canadian industry." Perhaps t h i s e f f e c t was beginning to be f e l t i n the 1920s i n Vancouver and was another explanation, i n addition to a slowing down of p r i c e i n f l a t i o n , f o r the r e a l wage increases experienced then. This explanation seems to t i e i n with one given by P o l l a r d i n reference to B r i t i s h r e a l wages. He argued that the working cl a s s did not benefit from i n d u s t r i a l i z a t i o n i n i t s early years because, at that time, p r o f i t s were . used for reinvestment rather than higher wages. The working cl a s s would eventually receive higher wages when returns from re-inve stment made that worthwhile, that i s , when reinvestment increased p r o d u c t i v i t y per worker s u b s t a n t i a l l y . "*""* I t seems that t h i s was what Piva r e f e r r e d to when he argued that increased production i n the f i r s t part of the century "did not 16 help to improve the l o t of the b l u e - c o l l a r worker." The p o s i t i o n of the unorganized and u n s k i l l e d or sem i - s k i l l e d was not obscured by the indexes. They benefitted from rapid economic expansion because of the greater employment opportunities which expansion provided. They also experienced.erosion of t h e i r wages by the p r i c e i n f l a t i o n which occurred during rapid economic growth. In times of more moderate a c t i v i t y the u n s k i l l e d and unorganized had to contend, with seasonal and c y c l i c a l 107 unemployment, two problems which increased i n sev e r i t y i n times of depression. And the benefit which the s k i l l e d workers i n established jobs derived i n depression, that i s , a lower cost of l i v i n g , was not completely l o s t on the u n s k i l l e d and unorganized. It was at least l e s s expensive to be unemployed in a period of depression than i n a period of economic expansion. Although the i n f l u x of u n s k i l l e d immigrants into the labour market i n the early twentieth century has been c i t e d to account for de c l i n i n g r e a l wages between 1901 and 1913 by the Department of Labour, Ostry, and Firestone, the Vancouver evidence suggests that i t does not o f f e r a f u l l explanation. Economic expansion i t s e l f , which generated p r i c e i n f l a t i o n , seemed to account for much of the erosion of the workingman's p o s i t i o n i n t h i s period. Economic expansion, i n turn, was not simply the r e s u l t of the population growth which caused displacement. At the same time the i n f l u x of immigrants may have increased the cost of l i v i n g . For example, rapid population increase i n the c i t y strained housing f a c i l i t i e s and increased rents. Also the processes of displacement seem .certainly to have operated i n times of seastfialtpr c y c l i c a l unemployment when migrant workers flocked to the c i t y to compete for the few jobs a v a i l a b l e . Of course, the population increase which resulted from immigration had i t s p o s i t i v e side. Without i t there would have been much l e s s economic a c t i v i t y i n the construction industry, to choose one obvious example. This study of the standard of l i v i n g i n Vancouver between 1901 and 1929 i s cast i n a d i f f e r e n t l i g h t than the B r i t i s h debate. In the early twentieth century B r i t i s h Columbia was a young, predominantly-male immigrant community. Therefore, the question of whether i n d u s t r i a l i z a t i o n destroyed a g r i c u l t u r a l society quite simply does not a r i s e here. Nor can i t be said that s o c i a l 108 transformations of the magnitude of the s u b s t i t u t i o n of factory production for smaller scale industry took place i n the province or the c i t y . In many ways transformations such as these, which had been v i r t u a l l y completed i n B r i t a i n , were present on the west coast at an early stage as part of the immigrants' c u l t u r a l baggage. Of course, the i n d u s t r i e s which developed i n B r i t i s h Columbia i n the early-twentieth century were l a r g e l y resource-based and service sector counterparts, somewhat d i f f e r e n t i n t h e i r organization than B r i t i s h secondary i n d u s t r i e s . Many of the questions that B r i t i s h scholars asked of t h e i r own society must be re-phrased i n a study of Vancouver's standard of l i v i n g . The time frame i s compressed. Vancouver, i n the f i r s t three decades of the century, was not a stage where the drama of the B r i t i s h I n d u s t r i a l Revolution was r e -enacted. Rather i n these t h i r t y years the c i t y developed as a centre of trade and commerce i n a province of new resource i n d u s t r i e s . A comparison with " p r e - i n d u s t r i a l " times i s impossible because Vancouver had no such past. Therefore, questions about whether s o c i a l i n e q u a l i t y increased because of i n d u s t r i a l i z a t i o n , or whether i n d u s t r i a l l i f e was l e s s s a t i s f y i n g or adequate than p r e - i n d u s t r i a l l i f e must be expressed i n a d i f f e r e n t manner. S o c i a l i n e q u a l i t y can be measured and probed over the years of economic development. S i m i l a r l y , the s a t i s f a c t i o n and adequacy of working cl a s s l i v e s can be ex-plored. The question asked i n t h i s paper i s a modified form of the one asked by B r i t i s h optimists: does the material p o s i t i o n of wage earners improve, not during i n d u s t r i a l i z a t i o n , but i n a period of considerable economic growth? This and the other questions seem les s dramatic versions of the ones asked by B r i t i s h scholars, but the questions asked here are not unimportant..' This paper has provided.one new measure of the p o s i t i o n of the economic p o s i t i o n of workingmen, that i s , the r e a l wage indexes. These do not il l u m i n a t e 109 ' a l l aspect of working class well-being i n t h i s period. No s i n g l e measure be i t quantitative or q u a l i t a t i v e can do that. The r e a l wage indexes do not even show the r e a l wage positions of a l l workingmen i n Vancouver. But they do suggest that economic growth did not completely benefit the working c l a s s . The i n f l a t i o n which came with rapid economic expansion could often outweigh the benefits which i t brought f o r the s k i l l e d and u n s k i l l e d , the unionized and the unorganized. In addition the indexes do not contradict the argument that displacement worked to keep wages down. Vancouver workingmen may have bene-f i t t e d l e s s from rapid economic expansion, accompanied by the p r i c e i n f l a t i o n i n the f i r s t years of the century and during the war, and by the large scale immigration i n the f i r s t decade than from more modest growth l i k e that which occurred during the 1920s. .110 Notes 1. The inadequacies of the Department of Labour's index have been discussed here and more fully in Bertram's and Percy's work. Bertram and Percy, "Urban Real Wage Trends in Canada," p. 27. 2. Rees challenged the American version of the displacement theory in his work. 3. Canada, Parliament, House of Commons, Royal Commission on Industrial Disputes in the Province of British Columbia, Minutes of Evidence, 14 May 1904, p. 169. 4. Transcripts of Evidence, vol. 1, 7 March 1913, p. 168. 5. British Columbia, Commission on Labour, Reprot of the Royal Commission  on Labour, 1914, p. 3. 6. Transcripts of Evidence, vol. 1, f i l e 10, pp. 323-4. 7. Ibid, vol. 1, f i l e 1, 7 March 1913, pp. 155-6. 8. "Judge Arranged a Peace Conference," Vancouver Province, 27 July 1915, p.16. 9. See Copp, pp.31-2, 43 and Piva, p. 45. 10. Annual Report, 1921. 11. Annual Report, 1918, pp. 61-3. 12. Sixth Census of Canada, 1921: Population, Dwellings, Families, Conjugal  Condition of Family Head, Children, Orphanhood, Wage Earners, 3:59; and Population, Age, Conjugal Condition, Birthplace, Immigration, Citizenship, Educational Status, School Attendance, Blindness and Deaf Mutism, 2:228-9; Fifth Census of Canada, 1911: Areas and Populations by Provinces, Districts and School Districts, 1:248. 13. Of course, it should not be forgotten that these working people, as well as others, realized an increase in their leisure time with the reduction of hours worked per day and per week. A real wage index which made allowance for this might show greater increases over the whole period. See Roslyn Kunin, "The Standard of Living of Canada," Unpublished research paper, Simon Fraser University, 1972. 14. Ostry, p. 212. 15. See chapter 1, note 35. 16. Piva, p. 58. Appendix 1. Vancouver Wage Data from Transcripts of the Commission on Labour, 1912-1914 Wage Occupation or Industry Sex Per Hour Per Day Per Week Per Month Hours per Pay of Max Min Max Min Max Min Max Min day Foreman Banks - Accountant $125 $100 - Asst Manager 166.66 125 - Ledger Keeper 92.50 75 Barbers M $16 ioh $18-25 B i s c u i t Factory F $8 5 BC E l e c t r i c - Carpenters $.35 1 l 9 - Conductors .35 .22 9 - E l e c t r i c a l Workers $4.35 8 - " (New Men) .35 .25 9 - Motor men .35 .22 9 - Steanengineers .35 .22 9 Canvas Awing Makers F 12 :.7 8 Canvas Glove Makers F 15 7 Carpenters $4.25 8 Carpenters i n sash & door f a c t o r i e s (white men) . .40 10 Vancouver Wage Data from Transcripts of the Commission on Labour, 1912-1914 (cont.) Occupation or Industry " (Japanese) Cigar Makers City Labourers Clerks - Accountants - Accountants - Architects - Banks - Books &' Stationery - Books &' Stationery - Butchers - Cigar Stores - Clothing - Drug Stores - Drug Stores - Furniture - Grocery - Hardware - Jewellery Shoe Stores Wholesale Cooks (camp) Cooks (flunkey) Sex Per Hour Per Day Per Week Per Month Hours per Pay of Max Min Max Min Max Min Max Min day Foreman $.30 10 F ..$8 7 $3 8 M $150 $60 7-8 F 125 50 6-8 150 75 8*2 8% M 85 50 10 F 40 28 9k 100 75 10 85 65 10' 85 60 M 100 75 9-10 F 40 9 75 50 10 85 65 10 75 60 10 M 100 75 9k F 60 40 9k 75 65 10 75 50 10 75 40 Vancouver Wage Data from Transcripts of the Commission on Labour, 1912-1914 (cont.) Wage Sex Per Hour Per Day Per Week Per Month Hours per Pay of Occupation or Industry Max Min Max Min Max Min Max Min day Foreman Cooks - hotels & private houses (white) $25 $21 Cooks - hotels & private houses (Chinese) 15 6 Cooks helpers 18 15 Dish washers 12 . 10 Cook, C.P.R. 125 70 Department Stores David Spencer - Girls David Spencer - Males F M 8.60* 14.50* Gordon Drysdale - Girls - Males - Carpet layers F M M 30 25 5 14 16.50 Hudson's Bay Co.- Girls F 25 3 James Stark & Sons -Wrappers - Clerks - Clerks F F M 30 3.50 5 9 Woodward's - Clerks F 9.15* 4.50 Woolworth Co. F 15 4.50 Electrical Workers $3.3C 8 Electrical groundmen/helpers 3.1C 8 * Average of entire staff Vancouver Wage Data from Transcripts of the Commission on Labour. 1912-1914 (cont.) Wage Sex Per Hour Per Day Per Week Per Month Hours per Pay of Occupation or Industry Max Min Max Min Max Min Max Min day Foreman E l e c t r i c a l workers for Western Canada Power Co. $4.55 Jurymen 3 Laundry - Star - Pioneer F F 1.25 $15 18 $7 Laundry Drivers M 23.50* Longshoremen - Day - Night - Cement Handlers $.40 .50 .60 10 10 10 Painters 4.50 8 Pl a s t e r e r s 6 8 Sectionmen 2.15 10 Stationary Engineers $3.25 2.50 $ 70 12-13 Steam Engineers - 2nd class - 3rd & 4th $100 125 60 10-12 12-13 Sheet Metal Workers 4.50 8 Stone cutters 5 8 Sugar M i l l s F 9 Telephone G i r l s F 2.10 1.20 lk Telephone Employees M 4 2.70 8 Waiters M 14 10 Waitresses F 10-12 8-10 * average Appendix 2 115 The average rate of growth of the four real wage indexes was compared with the rate of growth of two economic indicators, National Income (NI) and Gross National Product (GNP) using the least squares technique. Unfortunately only a small number of observations could be found for each, in the case of NI, 9 years, and in the case of GNP, 4 years. Because of the small number of ob-2 servations the equations derived obtained small R values. The average rate of growth of the four real wage indexes was also compared with the rate of population growth in Vancouver. Population estimates were available for 22 years. Population did not seem to have too much influence on real wages . The equation obtained for the yearly revised Bertram and Percy index (RWA) was: f W A / - - .000002 d population 2 with R = .34 and a T-statistic of 3.25. Similar values were obtained for the other real wage indexes. When the average rate of change of real wages, again for RWA, was compared with time, time itself accounted for .0076 of the average rate of change of real wages. The equation obtained was: dRWA _ n n 7 , , '.— = .0076 d time 2 with R = .60 and a T-statistic of 5.23. 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