The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1942-08-20


I'VE are forced to conclude,' says
Bread 4 Butter, after reading the
papers, listening to many speeches and
medating on both, that an intolerable
amount of nonsense is being purveyed
on the subject of the infationary gap.
Picture Held Distorted
"The gap theory applies when, as
now, goods and services available are
diminishing while the money available
to buy them is increasing According
to the theory, the excess money tends
to drive prices up. OPA has estimated
that the excess money is around ST.,
O00,OOO,OO0.
"To close the gap, it is argued, you
must freeze wages and incomes and
siphon off excess purchasing power
through increased taxes sales of War
Bonds, repayment of debts etc. In
recent months the most voluble argu-
ers have concentrated on wage-freezing
as point one and pretty much ignored
everything else.
''As nearly as we can make out,
these people are either distorting the
picture for their own reasons, or over
looking some important facts. We
would like to state some of these facts
for purposes of Qualification.
Why Income Is Increasing
Il. 1t is a fact that the national
income is increasing because the Gov
ernment is pouring billions into the
war effort. 1t is simply spending more
hnn n
creased at all since August, 1889, ma
tional income would still be increasing.
And if wages were frozen right now,
it would continue to increase. But if
wages were frozen and were the only
element of income to be frozen. as
many quarters have urged, wage
earnerS would be prevented from Shar-
ing the increased national income While
higher incomes could continue to rise
without limit.
Unless rigid limitations are placed
on higher incomes and corporate
profits, it follows that wages must ac-
tually be increased if distribution of
the new money is not to become dam
gerously top-heavy. .lr ai'
"2. OPA statiSticans have estimated
that national income will grow by
about ST 600, 100000 during 1912 This,
of course contributes to the initiation
airy gap; but where is the money go
ing? Well, more than $4,000, 100000 of
it. or about - per cent, is going into
the income groups earning $1,000 a year
or more: 81 ,0OO,OOO,OOO of it, or GA per
cent, is going to the income groups
earning $1,000 q year or more. And
only 6 per cent of the nations income
earnerS are in the above-S5O0O groups.
Poor Benefitting Least
There are precious few Wage-eaIn-
ers who ever saw $1,000 a year. The
fact is that the increased national in
come is enriching the % per cent of
the families and individuals earning
less than $1,000 a year least of all.
%. These facts seem to indicate
that wage-earners are not getting d
very great share of the growing na-
tional income. There is further evil
Gence. The workers i'm Little Steel,
among the better-paid wage-earners.
have just received an increase of "A
cents day, which brings their earn
ings up to - per cent more than in
January 1941. While the long fight to
achieve this increase was under way,
- large companies increased their
executives salaries by anywhere from
$4,000 to 100000 Il year.
Comment on PIE"
Il. The fact finding panel of the War
Labor Board, which observed that the
Little Steel companies could well afford
to pay 81 day more to their workers.
made this significant comment:
. 1T is clear that the national in
come shares importance with the con
sIimer's pie and that though the latter
will shrink the former will grow. To
ask labor to accept less than its pro
portionate share of the nations money
income in order to prevent labor from
acquiring too much pie leaves out of
account that money has value even
when it must be saved
Labor is fully aware that money
has value even when saved. Labor
has made it apparent that it would
accept wage increases as war bonds
that could not be cashed in until the
war ended or unless the worker were
unemployed.
Small Share Goes for Goods
-. If prices We're effectively fixed
and scarce goods fully rationed, with
taxes as high as they are (particu-
larly on low-income groups), there is
actually little that could be done with
excess income except to save, buy war
bonds, or repay debts. In the first
quarter of this year, consumer income
rose S4,7OO, 100000. About S1,3OOOOO
600 went into increased expenditures
for goods and services. All the rest
Went for taxes, war bonds, savings and
debts.
There are more facts bearing on
the general picture, but these are all
we have room for here.