of another problem that would arise in the attempt to
enforce it. If the wages of all classes or groups of wage earners are to
be increased when the profits return in industry as a whole is above the
approved level, the question arises as to the best way to calculate the
wage increases, and the most satisfactory basis for distributing them
among the different groups of wage earners. If both of these
calculations can be kept simple, it will be a distinct advantage.
Possibly the most simple and satisfactory way is to determine the
absolute amount of the extra profits, and of the total wages bill for
the representative enterprises--putting one in terms of a percentage of
the other. For example, if it be calculated that the profits of these
enterprises in excess of the approved level be one hundred million
dollars, and the total wages bill of the same enterprises two billion
dollars, the amount of wage increase to be awarded should be stated as 5
per cent. That is, the wage increase to be awarded should total 5 per
cent. of the total wages bill.

And here the second problem arises. How should this wage increase be
distributed among the various groups or classes of labor? It is probable
that the most satisfactory method would be to raise the wages of all
groups or classes of labor, including those groups whose wages were
determined under the living wage policy, by the same absolute amount.
This method does not meet all the demands of our previous reasoning
regarding wage differentials. It would, however, be the only way to
avoid too much complication in the determination of wages for different
groups or classes of labor.

7.--What would be the chief difficulties and disadvantages attendant
upon the application of the measure just sketched out? And what are the
chief advantages which it gives promise of? These are the questions
which now present themselves. First of all, certain difficulties of a
practical nature must be faced. For example, there would be difficulty
of settling upon a satisfactory method of calculating the profits return
of industry. The most satisfactory method of calculation would probably
be in the form of a percentage earned upon capital. If that basis of
calculation is chosen, however, some method must be decided upon for the
measurement of the capital value of all those enterprises, the profits
return of which is combined to form the index number of profits.
Probably the best way of meeting the diffi