Evening star., 1943-06-07
Price RoII-Buck

rise in the cost of living, the Office
| OF Price Administration has under
taken a 10 per cent roll-back in meat
prices, to be accomplished through
the payment of subsidies totaling be-
tween $25O,O0O,000 and $500 900, 900
year. This follows a similar move
to reduce the price of butter, predi-
Gated upon an annual subsidy of
$65, 600, 900.
In taking this course the OPA is
defying strong sentiment in Congress
against the use of subsidies and is
overriding the protests of the various
trade groups affected by the pro-
gram. On the other side of the ledger,
1t improves its position in the eyes
OF labor spokesmen and may expect
to win the appreciation of house
wives who must foot the Nations
food bill. But, important as these
considerations are, the real question
is whether the subsidy program can
be effective in the circumstances
under which it probably will have
to operate. And on this score, the
prospects are anything but encour-
aging.
1t should be made clear in the
first place, that the investment of
$400,000000 in subsidies the pres
emily contemplated totaD can have
but little effect in bringing down the
cost OF living under the best of con-
ditions. William Green, AF'L presi-
dent, and Philip Murray, head of
the CIO, have urged the President to
set up $2,000,000,000 annual sub
sidy fund, while others have esti-
mated that an effective subsidy pro-
600 a year. But even at this latter
figure, which probably is not exces-
sive, the subsidy program would be
a dismal failure unless accompanied
by other drastic measures bearing
on the cost of living. And, at this
time, the prospects are that these
other steps will not be taken.
1t Is automatic that no policy of
price control or price roll backs can
be successful unless accompanied by
drastic wage controls. Yet wage con-
troll on a plane commensurate with
the need has not been forthcoming.
Mr.. Murray and Mr.. Green want
prices rolled back to the May, 1912,
level. But they do not want wages
rolled back to that level. and would
be outraged at any such proposal.
The undeniable fact is, however, that
wages for organized labor, on the
average, have at least kept abreast
of the rise in living costs, and. if ac-
tual weekly wages be taken into ac-
count, the increase in the incomes
of these workers has been far in
excess of the advance in the cost of
living. Nor is there any evidence
that labor leaders are content with
the favorable position which has
been achieved for their members.
On the contrary the indications are
that they will continue to demand
more and more in the way of wage
increases. AS examples. one might
cite Mr.. Green's support of additional
overtime pay for railroad workers,
although they have already been
awarded a pay increase which vio-
iates the little steel formula: the
strong probability that the United
Mine Workers will receive a sub
stantial increase in one form Or an
other although they are entitled to
nothing under the formula. and the
decision of the War Labor Board to
review the strike enforced demand
OF the rubber workers for a larger
wage increase than was recently
granted them. The simple fact of the
matter is that organized labor groups
are demandlng-and getting-more
and more. Unless the Administrator
Is prepared to take a real stand
against these contributions to higher
living costs-and the same thing ap-
plies to farm prices-the subsidy
program will be futile and costly
experiment.
Another principal weapon against
rising living costs which has not
been used with sufficient firmness is
program Of taxation, or taxation
plus savings, which would drain off
the steadily mounting surplus of
buying power. Taxes are high and
many people are investing heavily in
various forms of saving, but it is
clear that in neither respect is
enough being done to bring the Ma
tion's total purchasing power into
approximate balance with the supply
of goods, nor to reduce to an abso-
Lutte minimum the Governments in
flationary borrowing. And this is a
condition which will only be made
worse by the subsidy program, for if
the cost of food is reduced by any
figure-$400 900 900 or SIS, 900 900 ,OOO-
the net result is merely to increase
the outstanding surplus of purchas-
ing power by precisely the same
amount. Under these circumstances,
to pursue an extensive subsidy pro-
gram as an easy way OUT of our
difficulties would do nothing more
than give an added whirl to an inf1a-
tionary spiral that is already under
way.