II.3. The Cost of Living over There and Here

Before the inquiries into individual prices I send ahead some remarks of a general kind on the peculiarity of price formation in America, which so often astonishes the layman.

Like the whole of economic life, price formation too is influenced in the United States chiefly by two factors: the still colonial character of the country and the high development of capitalism, which shows itself above all in the high development of the technique of production and transport.

The colonial character of the country is to be thanked in the first place for the high price of labour-power (as we have just established it). To this in turn it is to be ascribed that all goods and all services are dear in which a great deal of living labour is contained: that is, above all every personal service itself (servants’ wages!); then all services that rest in large part on personal services (cabs! theatres!, but also elegant restaurants, first-class hotels, in which many staff are employed); further, all goods whose handling (sale) requires much living labour (goods offered for sale in small quantities, such as milk, fruit and so on); all goods in whose production much, in particular qualified, labour is already expended (that is, all luxury articles resting on artistic skill).

The colonial character of the country corresponds, on the other side, to a cheap price of land: hence all goods in whose price ground-rent makes up a considerable part are relatively cheap. Agricultural mass products, and that all the more, the less human labour they need for their production and their marketing. The price of the products of the soil, however, is low also because of the relatively high fertility of the cultivated land. The cheap price of land will also show itself (though in smaller measure) in a low urban ground-rent (unless exceptional cases are present, as in the island city of New York): that is, low prices of dwellings, unless much dear labour-power enters into the price of the dwelling, as with all elegant buildings.

The highly developed technique, on the other hand, brings it about that all industrial mass products are cheap, especially when their sale too is already organised on the large scale.

From these few findings the following fact emerges with evidence: “living” in America is the dearer the more personal services are claimed, the higher the demands made on luxury, that is (naturally relatively!), the dearer the higher the household stands on the scale of incomes. It is quite inadmissible to compare in general the “value” of the dollar with the mark. It varies rather quite according to the height of the standard of living. A family with an income of 20,000 dollars in New York can perhaps practise no more luxury than a family with 20,000 marks income in Berlin; one with 10,000 dollars corresponds perhaps to a Berlin family with 15,000 marks, and so on downwards, until a point where the dollar has the purchasing power of 3 and even 4 marks. That, as I wish to remark in anticipation, is the case with the working population. The following investigations are to prove it.

I begin with the most important article of need, the

Here it should first be pointed out that the way in which the American worker satisfies his need for housing differs essentially, as is well known, from the continental European, in particular the German, in the great cities and industrial districts. Whereas the German worker in these places as a rule lives in tenement barracks, his American colleague just as much as a rule lives in one- or two-family houses. Apart from New York, Boston and Cincinnati, the tenement barrack is as good as unknown even in the great American cities, so that even the million-cities Chicago and Philadelphia house their population in one- or two-storey cottages, inhabited mostly by not more than two, in exceptional cases by three and four families, which derive their origin directly from the old log house and are still today built of wood in the great majority of American towns. This method of isolation has undoubtedly had its great importance for the formation of the national character, and it will not be dismissed out of hand that people connect the slow development of collectivist strivings in America (and England!) with the cell system in the satisfaction of the need for housing.

The question now is: what does his dwelling cost the American worker? At the first glance into the budget of any working-class family one is tempted to answer: much; more than the European. And so it is indeed the opinion, practically without exception, of all the participants in the Mosely expedition (no. 145 of my “Survey”) that the American worker must spend more than the English to cover his need for housing — it is added, in agreement: only his need for housing. I cannot decide whether that is true; I doubt it. In a comparison of the American with the German worker, however, the judgement must without doubt be different: the dwelling costs the American not more, but rather less, than the German. If I said that at the first glance the matter seems to be the other way round (that is, as the Mosely men assert), that is connected with the fact that the much more ample satisfaction of the need for housing in America is not sufficiently taken into account.

Certainly the American worker spends much more, often twice and three times as much, on his dwelling as the German does, say; but it is correspondingly larger and more comfortable. If, on the other hand, one calculates what covering approximately the same need for housing — say one room — costs, one finds that prices in America are on average rather lower than with us. I will support that with some figures, which, so far as they relate to American great and middle-sized cities, I take from the work named under no. 159 of my “Survey”.

Baltimore (508,957 inhabitants). Rule: the one-family house with 4–6 rooms. Rent 7–8 dollars a month; that is, 332–408 marks a year, so that a room costs 75.6 marks a year in rent.

Boston (560,892). A four-room house cost (1902) 12.14 dollars a month, a six-room house 19.30 dollars rent. That would correspond to a yearly price per room of about 150 and 160 marks.

Buffalo (352,387). Exact data are available for the tenement barracks in which Italians and Poles live. The former paid for a dwelling of on average 2.3 rooms on average 5.3 dollars rent a month, that is, 120.5 marks per room per year; the latter for a dwelling of 2.5 rooms 3.11 dollars, that is, 52 marks per room per year.

Cincinnati (325,902). The three- and four-family house predominates. The monthly rent in the poorest houses is 5–6 dollars, that is, 250–300 marks a year. The number of rooms is not given. If we assume only 2, the yearly rent of a room comes to 125–150 marks.

Cleveland (381,768). Rule: the one-family house; hardly 5 per cent of all houses shelter more than one family. In the better two-family houses each dwelling costs 10–15 dollars a month. We may assume 4 rooms per dwelling here, so that the price of each room would be 125–190 marks a year.

Denver (133,859). The population lives in one-storey houses of 3–6 rooms each, which command 4–12 dollars monthly rent. With an average of 4 rooms that would give a price of 50–150 marks per room per year.

Detroit (285,704). Rule: the one-family house. The average rent of the “ordinary working man” is 8–10 dollars a month for 6 well-situated rooms with water in the kitchen, that is, 400–500 marks a year, so that a room would come to 66⅔ to 83⅓ marks a year.

Nashville (80,865). Rule: the one-family house. Monthly rent 2 to 6 dollars. Assuming an average of 3 rooms: 35–100 marks per room per year.

New York. All forms of dwelling are found; but the great tenement barrack is gaining the upper hand more and more. It is to be borne in mind that the difficulty of settling the giant mass (nearly 5 millions!) on the given ground hardly has its equal on earth. One should therefore be able to infer enormous rents. But it is not so bad at all: a dwelling of 4 rooms costs 12–18 dollars a month in the most densely populated districts. In the houses of the City and Suburban Homes Company, which has houses, for example, on 64th Street East, and which adapts the rents as far as possible to those paid in the neighbourhood, there cost

One may therefore put the monthly price of a room in the workers’ quarters of New York at 3½ dollars, and would thus arrive at an average yearly rent of 176 marks per room.

Philadelphia (1,293,697). Imagine: a million people housed in one-family houses! At 30 minutes’ distance from the centre one pays 8–10 dollars a month for a dwelling of 4–6 rooms. At a distance of not more than 25 minutes from the centre a new four-room house 14 by 28 feet with “central heating” (heater in the cellar) and bathroom costs 12 dollars, a similar six-room house (16 by 40 feet) 16 dollars a month. The yearly price of a room is thus 100–150 marks.

Rochester (162,608). The greater part of the working population lives in detached cottages of 5–7 rooms each, which cost 1.50 to 3 dollars a week in rent. Yearly price of a room thus about 50–100 marks.

San Francisco (342,782). Small houses for one or two families. Monthly rent for 4–5 rooms 13–15 dollars. One room costs 150–160 marks a year.

St. Paul (163,065). Mostly one-family houses. The “normal” workman’s house costs 3–4 dollars monthly rent; taking the house at only 3 rooms, the room thus costs 50–100 marks a year.

It will now, I think, be enough if I set against these figures the statistics we possess on housing conditions in the German great cities. They owe their existence essentially to the inquiries of the larger German cities connected with the census (that is, last on 1 December 1900), whose results are customarily brought together in the Statistisches Jahrbuch deutscher Städte: last in the 11th year (1903), pp. 69 ff.

According to this, the yearly average price of a heatable room in marks on 1 December 1900, in rented dwellings without industrial use, with … heatable rooms, was (op. cit., p. 89):

One may now object: the German rooms are larger than the American (true! but these have the incomparable advantage of a freer, airier situation); not all the rooms counted in the American dwellings are heatable (which may also be true, though we have no evidence for it); all this will change nothing in the cautiously framed judgement, which I had formulated thus: covering an equally large need for housing in the cities costs the American worker, expressed in money, in any case not more than the German; while one can add with some certainty: mostly even less.

In order not to limit my findings to the larger cities, I give some more information on rents in coal districts, in which there are no great cities. I am able to do so thanks to the thorough investigations of P. Roberts into the condition of the workers in the anthracite coal districts of Pennsylvania (cf. no. 146 of the “Survey”). Here housing conditions are particularly bad, and the workers are in part dependent on the dwellings put at their disposal by the mines. The following tables give information on the rents paid there:

The Philadelphia and Reading Coal and Iron Company let:

Coxe Bros. & Co. let (the number of rooms, unfortunately, is not given):

For some other companies the following data are available:

Result: a room costs on average ¾ to 1¼ dollars, that is, roughly 3–5 marks a month.

With this one can compare a housing statistic that we possess for the Upper Silesian industrial district. Certainly its figures will represent minima for German industrial districts, which moreover relate to the time at the beginning of the 1890s; since then rents have certainly not gone down.

From the extensive material of this inquiry I put together the following table.

The lowest rates of 2–3 marks per room come from remote villages. If one leaves them aside, one will come to the result that the average amount of the monthly rent for a living room moves at about the same height as the American. If one wants to formulate the judgement again quite cautiously, one will say: the miner of Pennsylvania pays 10–20 per cent more for the same quantity of dwelling than the Upper Silesian paid (N.B. 15 years ago).

To the expenditure on the dwelling, however, we must also reckon that for lighting, heating and furnishing. The question is how prices for these stand in the United States.

The chief means of lighting — petroleum — is naturally considerably cheaper in the land of the oil springs than with us. The export price in New York is about half as high as the price in Mannheim or Breslau.

Coal costs roughly the same here as there, as is shown by the following comparison:

United States: Stat. Abstr. of the U. S. 1904. Yearly average price per ton in marks.

Germany: Stat. Jahrb. f. d. D. R. 1905.

From all that I have been able to ascertain, furnishing a room is rather cheaper in the United States than with us. Naturally the different quality of the furniture plays an especially large part here. But for some standard pieces it can be shown with some certainty that furniture over there costs less than in Germany. All the German furniture suppliers with whom I got in touch admitted to me unanimously that it would be quite unthinkable, for example, to supply an upholstered suite of 5 pieces for 100 or even only 160 marks, as the American stores do.

I give below the most important results of my inquiries, and at the same time express my thanks in this place too to those persons who kindly supported me in obtaining the data.

For America I have put together, from three of the largest New York furniture businesses — two department stores and one specialist furniture business — in which the workers usually cover their need for furniture and so on, the lowest prices for the most current articles of furnishing.

The American workers, like ours, buy their furniture as a rule by instalments, which are paid in monthly rates.

For comparison I set against them for Germany:

A comparison of the American with the German figures will confirm the correctness of the judgement I gave above.

United States.

The prices are given in dollars, and are thus to be multiplied by 4.2 to make them comparable with the prices in marks.

Germany.

Here the difficulties begin to pile up, especially if one wants to compare the standards of living of different groups with each other. For conversion into pure quantities is considerably more difficult still than in covering the need for housing.

First, the habits of the American and of the continental European, especially the German, worker again differ extraordinarily from each other as regards the kind of food: the American lives predominantly on meat, fruit, farinaceous dishes and fine wheaten bread; the German on potatoes, sausage and coarse (rye) bread. If one sets the prices in the two countries against each other, then, one must remain aware that price differences have quite different importance for the different countries according as they concern this article or that. With the American’s heavy meat diet and the smaller quantity of potatoes he eats, it is not so important for him whether potatoes stand somewhat higher or lower in price, while the price of meat must lie much nearer his heart. With the German it is the other way round. In the overall valuation, of course, it must be taken into account that foods, above all national peculiarities of diet, retain their absolute, physiological value, and that accordingly a price formation that shapes or favours a meat diet is to be regarded as more advantageous for the welfare of the people than one that compels a potato diet, rather than the reverse.

Then, however, it is uncommonly difficult to give an approximately reliable statement of price even for one and the same food, and so doubly difficult to compare the prices in different countries with each other. Above all because of the great differences in quality, which moreover is determined differently from place to place and from country to country. Think of the prices of meat, which vary in the ratio of 1 : 3 according to the quality of the piece. And (what holds for most foods) it is precisely in America that there are especially wide margins between the lowest and the highest quality, and correspondingly between the lowest and highest prices, for meat, for example. Which, of course, benefits the less well-off circles of the population. Then prices fluctuate according to the seasons (eggs!), and finally the methods of ascertaining prices, of quoting prices and of publishing prices are so fundamentally different that one loses all desire to make large studies in comparison of prices. One will rather have to be modest and content oneself with approximate values, which, quite from afar, bring before our eyes a quite approximate picture of the actual conditions. For that the sources suffice, but we also exhaust them. I use:

Since it can only be a matter of rough average prices, and the German sources A and B contain only these, I have also drawn on, for comparison, from the American report, the general table distilled from the thousands of individual figures, which records the “average price” for each article (as ascertained from the price data in 2,567 budgets). The result I have come to myself, on the basis of the study of the sources and of personal experience, is this: that the prices of the most important foodstuffs in the United States and Germany are on the whole the same. Meat is about equally dear, some articles (potatoes, rice) are dearer over there than with us, while others again (flour, bacon) are considerably cheaper. So that the working-class family will be able to buy approximately the same quantity of foodstuffs with the same sum of money in America as in Germany. Unless, say, it were to set its heart on a pure or predominant potato diet; but that it does not do, because it has no need to.

The figures of the table that I give below will, I think, confirm the correctness of my judgement. I note further that the figures for America and for the German sources A and B hold for 1901, but that for comparison I have deliberately taken another year (February 1904) for source C. The data of the American statistics, which are given in pounds (the avoirdupois pound = 0.45359 kg) and pieces, I have converted into kilograms and pfennigs. The figures of the table give (where nothing else is noted) the prices in pfennigs for one kilogram:

A good check on the correctness of the finding made here by roundabout ways — that food is not substantially dearer for the worker in the United States than with us — is supplied by a glance at the price lists of the cheap restaurants in which workers eat. On the lowest level, in the so-called hash-houses, cookshops, one meets bills of fare whose prices hardly rise above those of our people’s kitchens. These are the 10-cent restaurants. Here one gets steak with potatoes, bread, butter, and coffee, tea or milk; pork, veal or mutton chops, corned beef, fried sausage with the same accompaniments, three eggs and so on, each for 10 cents, that is, 42 pf. Quite good already are the 15-cent restaurants, in which the better-placed unmarried workers eat. I myself have often “dined” in New York in taverns in which the “regular dinner” (consisting of soup, meat, vegetables, potatoes, dessert and a cup of tea, coffee, milk or cocoa) cost 25 cents, that is, a little more than 1 mark.

Here all good spirits forsake us. No budget theorist has ever dealt with this ticklish subject in detail. In no official or semi-official price statistics do underpants and nightshirts figure. Which naturally has its good reason. For nowhere does a price say less than with clothing. “A suit”, or, to be more exact, “of blue cheviot”, costs 30, but also 300 marks; a “pair of ladies’ button boots of calf leather” cost 8, but also 40 marks, and so on. Hence the reporting of price lists too has little value here. If one wanted to cite the cheapest prices, say from German department stores, one would certainly come to such low rates that they would hardly find their like in America. Thus one business, especially well known for its cheapness, which is now represented in several European great cities, offers jacket suits for gentlemen “of fancy material, and black or blue cheviot” for 13.50 marks, summer overcoats for gentlemen for 15 marks, ready-made ladies’ costumes “lined, in fancy materials” likewise for 13.50 marks. The same business sells men’s elastic-sided boots “in split leather” for as little as 5.50 marks, likewise ladies’ lace-up boots in horse leather for 5.50 marks; further, men’s hats in black or coloured wool felt for 1.90 marks, men’s day shirts for 1.90 marks, and so on.

But if even the cheapest articles of clothing cost more in the United States, that is probably essentially because no one in America, not even the worker, would care to buy such notorious trash.

If one compares articles of approximately equal quality, one will find that footwear is rather cheaper over there than with us. I should know of no German shoe shop where, for example, a pair of men’s lace-up boots costing 2½ or 3 dollars (11–13 marks) over there would be found equally durable. On the other hand, articles of underwear, suits and so on seem to be somewhat dearer over there than here. At all events the working-class family spends more on the individual piece.

The best comparable material, precisely for clothing, will still be what knowledgeable persons have collected on the basis of their own experience in their dealings with workers. For America I possess figures put together through the kind personal mediation of Mrs. Charles Husted More. Mrs. H. M. is a lady who has investigated methodically and unexceptionably the standard of living of some 200 working-class families in the neighbourhood of Greenwich House (a settlement in New York, whose head worker is the excellent Mrs. Simkovitch). The figures are as follows:

Men’s clothing:

Women’s clothing:

Children’s clothing:

For Germany, on the other hand, I owe some data on the prices of typical articles of clothing, such as the worker wears, again to the kind communication of Herr Neukirch, workers’ secretary in Breslau.

Men’s clothing:

Women’s clothing:

If one is willing to let these data count as typical, and to set them against each other in comparison for America and Germany, it would turn out that clothing too comes not at all, or only insignificantly, dearer for the American worker than for the German.