The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1942-08-13
Consumer Notes
CONSUMERS UNION BLASTS
WAGE-FREEZING PROPAGANDA

| Wagefreezing editorials in the daily
press are debunked in the July 31s1
issue of Bread & Butter" weekly
bulletin of Consumers Union.
The facts run counter to the propa'
ganda, points out Bread & Butter The
facts are that the people earning $4,000
or more a year are pocketing Is per
cent of the increased national income
and that wage freezing would make
the distribution even more unfair than
it is at present.
I'VE are forced to conclude" says
Bread K Butter" after reading the
papers, listening to many speeches and
meditating on both, that an intolerable
amount of nonsense is being purveyed
OH the subject of the intiationary gap.
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.
OOO,0OO0O0.
"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 re-
cent months the most vOluble arguers
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 overlooking
some important facts. We would like
to state some of these facts for pur-
poses of Qualification.
Il. 1t is fact that the national in
come is increasing because the Govern
ment is pouring billions into the war
effort. 1t is simply spending more than
ever before If wages had not increased
at all since August, 1899, national in
come would still be increasing. And If
wages We're 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 sharing 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 danger
ously top-heavy.
"2. OpA statisticians have estimated
that national income will grow by
about $11 O,0OO,00O during 1912. This,
of course, contributes to the initiation
airy gap; but where is the money 60
ing? Well, more than $S,OOO,OOO,OOO Of
it, or about 70 per cent, is going into
the income groups earning $4,000 a
year or more; OOO,OOOOOO of it, or
GA per cent, is going to the income
groups earning $4,000 year or more.
And only 6 per cent of the nations
groups.
There are precious few wage
carners who ever saw $4,000 a year. The
fact is that the increased national in
come is enriching the Is per cent of
the families and individuals earning
less than $1,000 a year least Of all.
3. These facts seem to indicate that
wage-earnerS are not getting Il very
great share of the growing national
income There is further evidence. The
better-paid wage earners, have just re-
ceived an increase of A cents a day,
which brings their earnings up to Is
per cent more than in January, 194l.
| While the long fight to achieve this in
crease was under way, % large COM
panieS increased their executives sal
aries by anywhere from $4,000 to
| SlOO,OOO Il year
tom Girdler of Republic Steel, for
example, improved his position last
year with a jump to $275,000 from
Sl16,OOO the year before. Eugene G..
Grace of Bethlehem Steel had his
bonus edged up from $29S,OOO in 1910
to S31S,OOO in 1911.
More than this, many corporations
are giving disguised executive in
creaSes in the form OF funds to under
write executive retirements at $4,000
or SO II year.
Il. The fact-iinding panel of the
War Labor Board, which observed that
the Little Steel companies could we'll
afford to pay 81 day more to their
workers, made this significant COM
ment
1T is clear that the national income
shares Importance with the consumers s
pie and that, though the latter will
shrink, the former will grow. TO ask
labor to accept less than its proper
tiona;e 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 1t must be saved
| Labor Is fully aware that money