America seems to have had a recession too in the years around 1888, and in 1886 the newly-established US Bureau of Labor (which was founded in 1884) issued a report called Industrial Depressions. The First Annual Report of the Commissioner of Labor, March, 1886, which looked into the recession and current economic conditions.
As part of their research into conditions in Europe, the report noted the following:
“One of the agents of the Bureau reports as the result of interviews had with leading economists in Europe the following as the predominant features of modem industrial development among the producing nations: (1) The influence of the increased facilities for transportation and international communication. (2) The steady progress of rising wages, contemporaneous with declining profits. (3) The enlargement of the circle of producing nations to such extent as to make the means of production far in excess of the needs of consumption.” (Industrial Depressions. The First Annual Report of the Commissioner of Labor, March, 1886, pp. 258).So the “profit deflation” or profit squeeze that British business people were complaining about (the evidence for which can be read here, here, and here) seems not to have been restricted only to Britain.
There is also evidence in the report that the fall in prices and the increasing wage rigidity was distributing income from capital to labour in other European countries too:
“Upon the phenomenon of the rise of wages side by side with the general decline of prices and profits in Germany, Dr. Barth, one of the highest economic authorities of that country, observes that ‘human labor has become more productive; by the same quantity of labor vastly more useful products are produced and exchanged to-day than even twenty years ago. The sum of all products of labor in which the world has to share or which the world is free to enjoy has not only absolutely but also relatively been largely increased, and the economical condition of mankind has been improved. This, of course, does not mean that all classes of mankind have profited equally by the change. Certainly, however, the wage-laborers are not the losers but the gainers by this change. Take a list of wages wherever you please, and you will always find wages to have advanced with rare interruptions during the last half century. Even where such an advance of wages is not found, the contemporaneous decline in the prices of commodities nevertheless amounts to an advance of wages. This constant increase in the value of labor constitutes an immense progress of civilization.’BIBLIOGRAPHY
M. Piermez, a thoughtful Belgian banker and public man, in an examination of the present economic situation, asks the questions: ‘(1) Are we in the face of a general diminution of wealth? (2) Or is there only a change in its distribution?’ Answering the first in the negative, he proceeds to show how the distribution has been modified so as to give a proportion of revenue relatively less to land and capital and greater to labor. Capital has greatly increased and will continue to increase, but probably not in such a rapid progress as heretofore and chiefly for these reasons: ‘(1) It is not likely that there will be again an economic progress comparable to that by which this century has changed the face of the whole world. (2) The accumulation of savings will tend to diminish in proportion as they are rendered less and less productive. (3) The lower classes, whose share in the world’s distribution of wealth will continue to increase, save less than the upper classes. The average well-being of society increases with increase of wealth, and in the partition of this well-being a continually smaller share will go to those who live by wealth already acquired and a greater share to those who work. It will be still more difficult than it is to-day to live without working. Side by side with the fact of the increased reward of the wage-earner must be placed the great advance in the purchasing power of his wages. All the necessaries of life, food, clothing, heating, and lighting have been cheapened, and the tendency is for them to become cheaper still, that is, unless, in the case of the first-named article, the tariffs recently imposed in some European countries, Germany and France especially, the cost of food should remain normal or ascend. Laborers are feeling the effects of higher wages by eating more, clothing themselves better, and lodging in more wholesome houses. This, in return, reacts in making their labor more efficient and enables them to gain still more.” (Industrial Depressions. The First Annual Report of the Commissioner of Labor, March, 1886, pp. 260–261).
Industrial Depressions. The First Annual Report of the Commissioner of Labor, March, 1886. Government Printing Office, Washington, 1886.