Security Costs

To show with what varying impact social security taxes will fall upon employers, the Manhattan brokerage house of Weingarten & Co. last week issued a table of the ratio of labor costs to total business in a score of industries. Labor costs mean wages, and wages are what employers will pay taxes on--in 1937, 2% for unemployment insurance, i% for old age insurance. Averaging for the last 20 years.

Weingarten found these percentages of labor costs to volume of business:

Sugar Refining............................................. 3.8

Smelting & Refining............................................. 5.6

Meat packing............................................. 6.2

Cigarets.............................................6.2

Automobile Manufacturing ................................................. 10.0

Tires............................................. 15.5

Department Stores............................................. 17.8

Iron & Steel............................................. 21.0

Railroads............................................. 50.2

Thus in 1937, Social Security will cost sugar refiners, for example, about .1% of volume, automobile manufacturers .3%, steel companies .6%.

* Railroads are exempt from Social Security taxation because of their own pension plan, which is now in the courts.

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