Evening star., 1938-10-05

probably has to be tackled If any
thing is to be done about it. In the
latest communication from the Presi-
dent addressed to the convention this
week Of the American Federation Of
Labor he refers to the problem thus:
Il hope you will give attention to
the matter which am always con-
Cerned about namely, finding ways for
steady employment Of labor and in
creasing the annual purchasing power.
1t is what worker earns for himself
and his family in the course Of year
which is important not only for his
own economic plan for his life, but for
the economic life of the Nation"
This is veiled intimation to such
unions as are engaged, for instance,
'in building construction that they
had better find lower average wage
for the whole year and be assured OF
a years work rather than to depend,
as they have in the past, on income
from high hourly rates for a few
months. of the year to Offset the sea-
sonal lay-offs Also the idea of getting
an annual wage for workers in the
automobile industry has been advanced
again and again both by industrialists
and by the administration.
Shirks Effective Action.
Where the New Deal falls down,
however, is in talking glibly about an
annual wage and doing nothing to
bring it about. Job security is not
just matter for discussion with labor
organizations, who, after all, have no
responsibility of making ends meet,
but touches the very heart Of the
problem Of management and fair re-
turn on capital invested. The present
administration has been deep1 con-
cerned about increasing the cost Of
labor, but has done virtually nothing
to stimulate the increased production
IF goods out Of which such labor costs
must be paid.
Industry to be sure. has paid high
wages In the past, and in many in
ltances now Is paying higher wage
rates than in 1929. There is little
objection to the payment of adequate
wages, but what many industrial man
ayers fear Usually is that once the
wage level is raised on the basis of
boom times 1t cannot, be as fiexibly
reduced when orders drop OF. II
some one could assure industry Of an
annual wage on its capital, there
would be enthusiasm about assuring
the workers an annual wage income.
Since no governmental agency or
instrumentality can assure a steady
flow Of orders, the only practicable
thing which national administra-
ton can do is to remove the obstacles
which lie in the path Of increased pro-
duction and increased sales. This is
not just one isolated phase of a press
ing problem, but part of whole
series of steps that have to be taken
to make the course of industrial man.
agement much more certain than it
has been.
Taxation Flexible Factor.
Thus taxation is one of the indef-
mite things which change so often
that businesses cannot gauge their costs
from year to year. Likewise, labor
contracts are often negotiated nova
days on a piecemeal basis instead of
on an industry-wide basis, as in Eng
land and Sweden, and the result is
that varying wage rates are affecting
prices. Although living costs have
been fairly stationary, wage increases
have been sought by some workers
unions every year, instead of making
contracts for two or three year periods,
with provision for revision If the cost
CT living changes.
Then, too, the operations of the
Government have affected business it.
self so perceptibly that any attempt
to forecast future orders, and conse-
quently to measure future employment.
Is often rendered futile. The pump
priming,' for example, produces for
a time an artificial stimulus, wage
rates are changed to correspond with
seemingly boom times, and then when
depression comes the corporations be-
gin laying OF their men so that the
latter get only two or three days work
week.
Hazardous Mental Pastime.
Many industries are better equipped
than they ever have been, in a statis-
tical sense, to forecast probable de-
mand, but when a national admins
tration, by its controls of credit and
purchasing power, shoots the business