THEORY OF PRODUCTIVE EFFICIENCY 179

Labor, from which the following definition has been
taken «1

Real wages and family budgets do not give the full picture
of the wage-earner’s economic and social position. Let us
assume that from one year to another real wages of the manufacturing
 wage-earner increase by 10 per cent. That means
he can buy in the second year 10 per cent. more commodilies
 than in the first year. Let us assume that at the same
time production increases by 20 per cent. This means that
20 per cent. more commodities are offered on the market. If
‘he wage-earner’s real wages have increased only by 10 per
cent. he can not share the full amount of the more production
of 20 per cent. It is true he can buy 10 per cent. more commodities
 than he could buy the year before, but he has helped
to produce 20 per cent. more commodities than all the commodities
 produced the year before. His share in the more
production is one-half, the other half of his share in the opportunities
 which this more production offers either goes to
other consumers in addition to their own increased share or
is not used at all, which means that a certain part of the
national product has to remain unsold, that stocks increase
and that industrial prosperity is menaced. The social position
 of the wage-earner, his share in growing opportunities
which increasing production offers, his purchasing power
measured by national production then has declined. It is in
order to measure the social position of the worker, his share
in growing opportunities, his purchasing power in relation
to the national product, that we calculate social wages, t.e.,
money wages related to prices and production.
These striking declarations and the demand for an
equitable participation in the output of industry soon became
 the fundamental plank in the Federation’s wage platform.
 The constituent unions of the Federation took it up
as a practical method of measuring standards in the vari-1
 Article entitled “Wages in Manufacturing Industries, 1899 to 1927,” by
Jurgen Kuczynski and Marguerite Steinfeld—American Federationist, July,