Elements of the Housing Problem

Joseph Dana Miller

[Reprinted from Land and Freedom, May-June 1938]

Joseph Dana Miller was during this period Editor of Land and Freedom. Many of the editorials published were unsigned. It is therefore possible that Miller was not the author of this article, although the content is thought to be consistent with his own perspectives as Editor.

"Labor Must Demand Better Housing" is the title of a short article in the International Molders' Journal for April, 1938, part of an address by Robert J. Watt, American Labor Representative of the International Labor Office, Geneva, at the National Public Housing Conference.

There is no doubt that since labor produces everything we need and have, labor at least is entitled to what it produces.

Labor men realize that they build the deluxe dwellings throughout the country, yet that probably never appreciate why they do not occupy them. It must seem rather strange that since labor produces the beautiful homes, the workers are compelled to live, frequently, in the most dilapidated and outmoded dwellings. It is questionable whether any labor leader has ever raised this point, or undertaken to tell why this should be. All they seem to talk about is "Labor Must Demand Better Housing of the Masses."

In his statement the writer says, "Labor has the most direct and intimate understanding of the nature of the housing problem." The American Federation of Labor today represents about 4,000,000 organized workers and their families, and an enormous percentage of these families live their whole lives in what experts call sub-standard housing, tenements in New York, shot-gun houses in Birmingham and shacks in every industrial town in America, and today there is a shortage even of shacks."

Rather a strange statement from a Labor Leader. Why doesn't labor build homes for themselves? Answer: He waits for someone to give him a job and jobs are not given out at the present time, for the reason that the builders cannot afford to put up dwellings and rent them at the price that the tenants can afford to pay. Causes: Several Speculative prices of sites high cost of material continuous labor increases, jurisdictional strikes, and strikes for an increased wage just as the project is about to be completed.

There can be no quarrel with labor seeking a high wage. On the "other hand, however, labor should give a fair return for that high wage. Continuous strikes delay the completion of the structure, but the carrying charges go on. Interest must be paid likewise taxes. This is all reflected in the rent the owner must exact from the tenants.

We sometimes wonder whether labor leaders give much consideration to matters of this kind. We know that when wages are increased, the cost is passed on to the consumer. Labor gets a return for his product, whether it be a brick, a steel girder or a sheet of glass. We wonder whether labor realizes that labor gets absolutely nothing for producing a site. The site was there before man came on earth, and yet, when man requires that site for his needs, he is compelled to pay someone all that can be exacted, and labor must pay for it.

If labor would give attention to the amount of taxes that go into production and distribution, they may, perhaps, have another view of the labor situation and unemployment.

Since this subject refers to housing, it. is well that we use housing as an illustration. According to the requirements under the Wagner Act, no room erected under Federal auspices shall cost more than $1,250. A family needs four rooms on the average for its requirements. This means $5,000 for an apartment. Taking the New York City tax rate as a basis, the taxes alone on the apartment will be $150 a year. This is exclusive of the land tax. In Atlantic City, however, the tax will be nearly $600, for there the rate is almost double that of what it is in New York. The New York rate is the lowest of any large urban center.

Present construction costs indicate that the wages in construction is 60 per cent, if not more, of the entire cost; 60 per cent of $5,000 is $3,000. When the structure is completed, the builder is compelled to pay a $90 tax just because he employed labor in putting the building together. There is a similar tax on every other commodity and article going into the structure.

Under the circumstances, builders cannot be blamed for not going in for construction, since, after they employ labor, both in building and in preparing materials, a heavy tax is placed upon the project.

This should be the concern of labor and not urging governments to go in for subsidized housing. If labor can only pay $4.00 a room a month and the cost of maintaining that room is $ 10.00, the difference under a Federal subsidy must come out of taxes, which are passed on to those who at that particular time can be forced to pay the increased taxes. Increased taxes on those whose earnings are higher will eventually reduce their purchasing power, for taxes take part of their earnings. This will bring us into the vicious circle of reducing purchasing power all around. A lack of customers is what causes business depressions. Customers only buy in accordance with the amount they have to spend. If it is taken from them in taxes, they must take it out of shelter, food and clothing.

Some day, somehow, labor may realize who is doing the pinching. They can no longer blame it on capital. Factories are closed down, mills and mines are being abandoned and the banks are loaded down with money which they are unable to lend. The fear of investing has reached a point where business men will not take a chance, since all they produce is taken from them in taxes. Clean up the tax situation, take the burden off industry and labor and the machine will begin to work.