WAGE INCREASES

Timaru Herald, Volume CLVIII, Issue 23346, 1 November 1945, Page 5

WAGE INCREASES

IN AMERICA President’s Order Cushioning Post-war Shock To Workers By Telegrapn—N Z Press Assn —Copyrfgh' <9.10 p.m.) WASHINGTON. Oct. 30. Declaring that wage increases were imperative to cushion the post-war shock to American workers, sustain adequate purchasing power and raise the national income. President Truman issued an executive order permitting wage rises—(l) Where the percentage increase in average ordinary time hourly earnings since January, 1841, has not equalled the increase in the cost of living between January, 1941, and September, 1945. 12) Where it is necessary to correct inequalities among factories in the same industry or locality. <3) Where it is necessary to ensure full production in any industry designated as essential to reconversion and also in which existing rates are inadequate for the recruitment of needed manpower. In a nationwide broadcast, the President said he beneved that ingustry as a wnole could afford substantial wage increases without price increases. He added that laoour had a stern responsibility to see that demands for increases were reasonable. He castigated the House Ways and Means Committee lor its failure to allow his proposal lor unemployment compensation at the rate of 25 dollars a week lor 26 weeks to reach the floor of the House. “I hope this Committee will fulfil its obligation to the nation and give members of the House an early chance to vote on this important legislation,’’ he added. "The passage of tne Full Employment Bill will give the American people an assurance that the Government stands for prosperity and jobs, not for depression and relief.” “The Government policy for the transition from war to peace may be briefly stated:— (1) To assist in the maximum production of civilian goods. <2> To remove as rapidly as possible Government controls and also to restore collective bargaining and free markets. (3) To avoid inflation and deflation. Wages and Prices "One of the major factors in determining whether or not we shall succeed in carrying out this policy is the question of wages and prices,” he continued. "All of us are deeply concerned with wages, because all are concerned with the well-being of all parts of our economic system. Most of you have been disturbed by the labour difficulties which stand in the way of reconversion. I do not think all of us understand how hard a blow our industrial workers suffered in the shift from war production to peace. Sudden, total victory caused millions of war workers to be laid off with short notice or none.

"While we hope to overcome that condition before too many months have passed, unemployment is hardly a suitable reward for the contribution whicn veterans and war workers made to victory. The end of the war meant a deep cut lit the pay envelopes of many millions of workers, many of whom already had to take, or will soon have to take, a cut in wartime pay of onequarter or more. "The reasons for these cuts are:— (1) "The changeover from 43 to 40 hours a week with a consequent loss of overtime. (2) "Weekly pay being reduced because of many jobs being reclassified to lower grades. (3> "Millions of unemployed in high-ly-paid war industries now have to find jobs in lower wage employment. “It is estimated that unless this tendency is checked the annual wage and salary bill of private industry will shrink by more than 20.000.000.000 dollars. which is not going to do any section of the country any good. Many people have told me that industry cannot afford to grant any wage increases without obtaining corresponding increases in prices, and have urged me to use Government machinery in order to raise both. This pronosal cannot be accepted under any circumstances. It would mean but one thing—inflation. and that invites disaster. We must above ali hold a line on Drices.’’ President Truman’s new policy will neither satisfy labour nor industry and will inevitably mean the creation of a new wages board which will be Inundated by applications for increases, says the correspondent of the “New York Times.” According to impartial sources it is felt that the strike record for December will be greater than in the corresponding period last year, because no machinery’ is provided in the President's order to carry out the policy laid down. As with the War Labour Board the accumulation of cases will mean that some unions will take short cuts to get quick action. The time between Government conciliation and strike action will be exceedingly short, unless labour and management establishes a new machinery for conference and somehow renews the no strike pledge. Confusion Prolonged The newspaper in a leading article says: “The new order will only prolong the confusion into which industry has already plunged as a result of present controls. The difficulty comes not because the President failed to find exactly the right wage price formula, but because no such Government-im-posed formula can be devised. The Administration is still engaged in creating inflation on the one hand by deficit financing and pushing up wages, while trying to combat it on the other hand by holding down prices. The result of such contradictory policies can only be to wipe out profit margins and slow down production. The Director of Stabilisation <Mr John Collett) announced that the cost of living in the United States had increased by approximately 30 per cent since January. 1941 • Labour leaders in Detroit hailed_ President Truman's speech as a con-’ structive answer to an important Question facing the American people. Mr R. J. Thomas, president of the United Automobile Workers, said Mr Trunian had removed the automobile companies’ last excuse to refuse the union’s proposed 30 per cent increase, when offered relief on prices if. after a reasonable period of production at ceiling levels, it was found that a fair profit could not be earned.