Persistent union propaganda has made most people overlook the most important single fact about the corporations. This is that the chief beneficiaries of the corporations are the workers employed by them. Labor must be paid before it can be determined what funds are left over for either the stockholders or the bondholders. The employees are not only first in priority but overwhelmingly first in the amount they receive.
Let us take as an example the year 1944. It was, with the exception of 1943, the year of highest corporation profits on record. Yet in that year, for every $1 left over after taxes for the stockholders, General Motors paid out $8 to its employees. United States Steel $15, du Pont $5, Bethlehem Steel $23, General Electric $8, Curtiss-Wright nearly $40, and Westinghouse Electric $15.
The Department of Commerce found that the employees received 61 percent of all corporate distributions in 1944, and that after deduction of other costs and taxes there were left for net profits 9 percent. The employees, in other words, got from the corporations in that year between six and seven times as much as was available for the stockholders.
The best data we have shows that the executives of manufacturing concerns get on the average about 6 percent of the total of wages and salaries paid out.
These facts, unfortunately, do not at all correspond with the general public’s idea or the average worker’s idea of the facts. In a recent survey, two-thirds of the workers interviewed actually believed that industrial companies pay out more to the stockholders and to top management than they do to the workers.
The typical factory worker, it was found, believes that wages take only about one-fourth of the money paid to workers, executives, and stockholders. The truth is that workers get five-sixths to even higher proportions of this total, depending on the conditions of particular years.
When we consider the stake that business has in this matter—when we consider that the ideas upon which the average worker and the general public act have the power either to preserve or destroy not only individual corporations but the whole private-enterprise system—it is incredible how little business has done to make these basic facts known. Practically all corporations today print reports to their stockholders; only a meager handful print reports to their jobholders. Half of the 50 largest manufacturing corporations do not bother to make public their annual payroll figure, though it is certainly far in excess of their dividend figure. Here is an incredible failure in “public relations.”
For illustrative purposes, I should like to call attention to one of the outstanding exceptions—the Johns-Manville Corp. Last June it published a two-column advertisement in more than 100 mediums throughout the country under the head “A Report to the Public by Johns-Manville.” “Here are the highlights,” this advertisement declared, of Johns-Manville’s annual statement in the critical year of 1945:
Total income $886,000,000
For all costs (except those shown below) 41,000,000
To employees for salaries and wages 36,500,000
To government for taxes 3,500,000
To stockholders in dividends 3,000,000
Leaving in the business 2,000,000
These items were then explained in more detail. It was explained, for example, that earnings after taxes were 6 cents per dollar of total income, that wages and salaries were 42½ cents per dollar of total income, that taxes were 4 cents per dollar of total income, and so on.
Within the next few weeks and months the great bulk of the corporation reports for 1946 will be published. This Johns-Manville “jobholders’ report” illustrates the kind of thing that every great corporation should do, first in its own selfish interest, and second in the interest of the whole private-enterprise system, which involves the interest of all the workers. For unless the workers understand the private-enterprise system, and understand what it means for them, they will destroy it. And unless management makes it possible for the workers to understand the system by taking every opportunity to explain the real facts, it will merely be cooperating in its own destruction.
Profits are the form of income that are now under most persistent attack. Yet when we consider the whole economy it is amazing how small profits actually bulk.
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