Guaranteed Wage Big Issue In America

Press, Volume XCI, Issue 27639, 21 April 1955, Page 13

Guaranteed Wage Big Issue In America

[By FRANK OLIVER] NEW YORK, April 19. One of the big battles of American social and industrial history has now been joined and is being fought quietly but forcefully behind conference doors. It is the opening battle for a guaranteed annual wage being fought between the Automobile Workers’ Union and the great General Motors and Ford companies. * In recent months many tons of newsprint have been devoted to discussion of the pros and cons, and to definitions of the guaranteed annual wage. Now the union proposals appear to mean this. For all workers, a guarantee of 40 hours of work or pay for every week when the worker, regardless of seniority, was not notified in advance that he would be laid off for the full week. For workers with two years’ seniority, a guarantee of pay for each full week of a lay off up to 52 weeks in amounts sufficient to enable him to maintain the same living standards as when fully employed, which means supplements to any unemployment compensation a worker may be entitled to.

For workers on the payroll more than three months but less than two years—those most liable to a lay off—there will be a similar guarantee of one week’s earnings for each two weeks worked.

The guaranteed wage or “G.A.W.,” as it is called, is scarcely new in America, social historians claim, for in 1894 a wallpaper company signed a contract with the union guaranteeing 11 months of work a year and since then some 350 similar plans have been adopted in various parts of. the country and nearly 200 of them still function.

Generally they affected businesses with products such as soap, shoes, and food, subject only to mild fluctuations of demand.

Now comes the effort to establish the system in one of the country’s major industries, and one which must still be classified as a luxury industry, subject to very considerable fluctuations. It is obvious that if the system can be forced on the motor industry then the steel industry will follow, and once something is established for those two industries, univ ’’sal application usually follows rapidly. In the past these small schemes of guaranteed annual income have originated with the management and some management officials iu the motor industry favour the scheme, saying that it is not right to keep bouncing workers on and off the payroll. Principle Opposed But the majority of management officials oppose the principle of “G.A.W.,” although some feel that the demand for it is symptomatic of the times. The industry as a whole is fighting the demand for various reasons, one being that it invariably starts by opposng any and every bargaining issue. Industry also contends that it is impracticable, that it is a radical departure from the long-standing policy of giving equal treatment to all the employable, and that it will not assure full and stable employment but act as a restraint upon production and reduce the number of steady jobs. Labour has timed its demand well. It could not hope to get through any such scheme in a period of high unemployment, but at the present time employment is relatively high, and the country as a whole is prosperous. Unions are hammering the alleged inevitability of the scheme so “why not now.”

So far the C. 1.0. has failed to put over the issue in the steel, rubber, and electrical manufacturing industries.

and some sections of management believe that if the motor industry can defeat it, too, the issue will be dead. Neutral observers, however, consider that a little too optimistic. Management feels that legislation. State or Federal, should correct any deficiencies in unemployment compensation. that it should not be done through private plans, and they object strenuously to making labour a fixed cost in industry. Management also argues that if a strike of a small number of key workmen forced the industry to close down it would be paying “G.A.W.” to those laid off. thereby financing the strike against itself. Union leaders feel equally strongly about the uncertainties of life for workers who are on and off the payroll. [Unemployment compensation u* most States is roughly half what a man earns at full employment] and they are fighting for the greatest measure of security possible. The “G.A.W.” demand is undoubtedly far-reaching, affecting as it would the nation’s savings because industry would be forced to amass large funds to take care of “G.A.W.” payments in times of\ stress, and plso affecting marketings methods and production. AIT these possibilities are being

assessed and argued, but few bother to deny that in the end the cost of the scheme, if it can be forced on industry, will be borne by old Mr Consumer, and the highest cost of living in the world will soar a little higher. *