The Waterbury Democrat., 1943-07-08

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Canada's overall price ceilinl
went into effect Dec. l, 1871. At tn,
same time, a general wage ceiling
went into effect.
Along with the wage and price
freezes, it was provided that there
should be cost of living wage
bonus paid to make up for any in
creases in the cost of living which
might subsequently occur. The
bonus consists of a 25 cents per
week increase in wages for each
point by which the official cost of
living index rises over October, 1941
prices. This applies to all adult
males and all workers receiving ba-
sic wage rates of $25 week or
more.A straight l per cent increase
is given to other groups. Farm
workers, government workers, en-
/ ployes of non-profit organizations
and domestic servants are excluded.
BENEFITS NE-THIRD
Determination of the cost of liv-
ing index are made every three
months to see whether a bonus is
due. Payment of the bonus is man
datory but it is not now being paid
to all workers, which has been a
cause for some discomfort. Less
than million out of Canada's three
million industrial workers seem to
have benefited.
In broad outlines, those are the
essentials of the Canadian cost of
living wage bonus system. The Ca
nadians say it works and so do the
Washington economists who have
studied it. Its efficacy is in part
due to the fact that employers, the
food industry and others have seen
it was to their advantage to help
hold down the cost of living so they
wouldn't have to increase wages.
The Canadians estimate that
one-point increase in the cost of liv-
ing index with its resulting Is cents
week wage bonus would mean an
increase in Canadian payrolls of 500
million a year, If applied to all of
Canadas three million industrial
workers. In other Wordrs, the bonus
Is $13 million a year for each mil
lion workers.
LIVING COSTS UP "a POINTS
Apply those figures to U. S. non
agricultural employment of approx
imately 40 million workers and it
comes out that each one point in
crease in the cost of living index
would cost 40 times $13 million or
$500 million a year potential in
crease in payrolls under the Ca
madam scheme.
The U. S. sterilization policy,
starting with the Little Steel formu-
la, was supposed to approve wage
increases of up to Is per cent to
compensate for Is per cent in
crease in the cost of living since
January, 1941. But since January,
1941 the U. S. cost of living index
has gone up "a points. In other
words, the cost of living index has
gone up nine points beyond the IS
per cent increase taken into consid-
Grafton by the Little Steel formula.
1t has gone up six points since Sep
TENDER Is, 1912, date of the stab
ilization order freeze. Under Ca
madam rates of 25 cents per point
this would have meant wage in
creases of from $3.50 to 1928 per
week, since the Little Steel formula,
or total of Sc per week for the
24-point rise since January, 1941.
One important feature of the Ca
madam bonus plan is that it cannot
be applied retroactively, to make up
for past increases in the cost of
living. Therefore, if any such idea
as the Canadian wage bonus were
put on the U. S. books now it would
apply only to future increases in
the cost of living. But at the rate
that item has been rising, it can be
seen that similar plan operating
in the United States would mean
payroll increases at the rate of from
SO billion to S. billion year. Sub
sides might have been easier and
cheaper, at that.