Security Prices and the Wage Earner

Abstract

A QUARTER CENTURY AGO, industrial economists and security analysts attempted to appraise the condition of the economy by studies of series such as freight car loadings, number of furnaces in blast in the steel industry, or call money rates on the New York market. Such series were believed to reflect one or another condition that was fundamental in the current state of the economy. Today, many of these series are of less importance both because many new and more useful ones have been added and because the key facts in the economic situation at the present time are different. Of these different key factors, the importance of the wage earner has grown to major proportions since the recent war. His voice is heard in the policy-making operations of the state and local governments; his economic well-being is a heavy influence in what is known as a laboristic economy. The issue, then, is that of understanding the increased share of the wage earner in the economy and, for the purposes here, his influence on security prices.