charge for many forms of professional service, such professions as medicine, dentistry and law may fail to command an increase in income sufficient to keep pace with advancing prices.
To avoid the popular error of attributing an increased cost of living to all persons under a regime of rising prices, and to reveal the actual effect of prices on costs, it is necessary to determine whether the majority of the population is included among those whose incomes have failed to respond to advanced charges or among the beneficiaries of high prices.
In the less fortunate class, which undoubtedly carries an increased burden of living costs, may be enumerated the following: (1) investors in fixed-income securities such as mortgages, bonds and life insurance; (2) unorganized wage earners; (3) salaried persons; (4) members of most professions; (5) proprietors of small-scale industrial and commercial enterprises; (6) middle-men and tradesmen not sufficiently organized to advance and maintain their charges coextensively with price movements.
In the more fortunate class, whose incomes bear a progressive ratio to prices and whose cost changes are, therefore, inversely proportional to price movements, we may expect to find: (1) proprietors of mortgaged and bond-issuing commercial and industrial enterprises; (2) proprietors of highly capitalized and centralized industries not subject to public control; (3) employers of unorganized labor and salaried persons; (4) members of highly organized trades and occupations; (5) grantees of public-service privileges whose net earnings support an advance in "franchise values" during the period; (6) proprietors of natural resources and recipients of tariff protection so circumstanced as to advance prices at will through a monopolistic control of supply.
There is an intermediate zone of economic condition which is practically free from the characteristic attributes described above. This neutral condition may be attributed to those whose incomes and expenditures are alike correlated with current prices, and is doubtless realized by a much larger proportion of the population than may at first appear. Many persons are so identified in their business interests with both characteristic groups as to realize no net change as a result of the advantage of either. Moreover, in so far as business is subject to competitive self-regulation and to reasonable official regulation, there may be a wearing away of economic inequalities of changing prices and a constant recruiting to the normal average of welfare.
The chief consideration involved in the question of prices and the cost of living is not the numerical measure of price changes nor the aggregate number of persons affected thereby; but rather the changing incidence of the burdens of life upon individuals and classes, and the logical results of disturbed economic stress upon the social structure.
