F.— ECONOMIC .SCIENCE AND STATISTICS. 135 



that suggests that retail distributing costs rose iu greater proportion than 

 prices generally between 1914 and 1925 ; ^ since then we have had a 

 further great increase in the number of insured persons employed in retail 

 distribution. This expansion of the retail margin, coupled with the 

 enormous expansion of newspaper advertisement revenue iu the same 

 period and the elaboration of competitive selling organisation, has been 

 sufficient to neutralise and make of no effect in the final price to the 

 domestic consumer of British goods much of the writing down of capital, 

 reduction of wages, and economies of re-organisation by which productive 

 costs have been reduced. By keeping up the cost of living, while whole- 

 sale prices are falling, these costs also make it difficult to ask for any 

 reduction in wages. So far then as retail distribution provides additional 

 employment bj'' its expansion, it probably does not succeed in compen- 

 sating for reduction in industrial employment, which the cost it imposes 

 on industry involves. 



The second group of expanding industries is the building, building 

 material, and furnishing industries. Together these account for 211,000 

 increase in the five years. Here the explanation is partly the demand 

 due to interruption of building during the war, partly the large subsidies 

 given to encourage building. The war-time arrears have now been made 

 up, so that further expansion will be limited to the needs of the increase 

 in population and of replacement with the aid of further subsidies. The 

 case of the third group is similar. These are industries in which expansion 

 has been stimulated by protection, but would have taken place without 

 that stimulus, under the more economic stimulus of technical invention ; 

 motor manufacture and artificial silk are the chief members of the group. 

 It is difiicult to estimate how much of the growth was dependent on 

 protection and merely a diversion from unprotected industries ; but the 

 aggregate expansion of the two together would not be sufficient to com- 

 pensate for half the contraction in coal alone. So far from the expanding 

 industries showing any likelihood of replacing permanently the loss in 

 employment offered by the older, contracting industries, it would appear 

 that they cannot be relied on even to provide continued employment for 

 their present complement of workers. The new situation requires, if it 

 is not to exaggerate the difficulty of the post-war unemployment problem, 

 a more rapid growth of new industries, of expansion in new directions 

 than before the war ; actually, the rate of expansion and capacity for 

 growth appears to have seriously diminished. 



VIII. 



My object in this review of wages and employment has been to dis- 

 cover the consequences of the change in methods of settling wages that 

 I described at the outset. I have been led rather wide of my subject 

 by the difficulty of distinguishing these consequences from those of other 

 contemporary changes that have interacted with it. It remains in 

 conclusion to point out that the loss of plasticity, and the adverse effects 



' ' The amount of expenses per £ of sales (in certain representative establishments) 

 ■was on an average probably 35 per cent, greater than in 1913.' Further Factors, 

 p. 117. 



