Evening star., 1944-12-17
Little Steel Wage Dispute
Involves Postwar Angle
Labor Contends Basic Pay Rise Has Not Kept Pace
With Living Cost and Fears Loss When
Peace Brings End to Overtime Income
By Sam Shelton,

6p Odf
What family spends is one thing;
how much 1t costs that family to 'live"
is something else.
The conflict between the two propo-
sitions is the cause of lot of wrangling
on the part of experts. 1t runs through
the thousands of words of the recent
report of the Presidents Cost of Living
Committee. 1t hardly can escape notice
In the expected comprehensive report
on wage policies being prepared by the
War Labor Board This forthcoming
document already has been described as
Historic by WLBs executive director.
The question of wartime wages is in
volved; whether the Little Steel formula
restricting wage increases shall stand,
be modified or discarded. Bent but not
broken is the condition of the for
mula today. The conclusion of. the
Presidents Cost of Living Committee,
whose findings are analyzed here, is
that cost of living" has not increased
in time of war as sharply as labor or
CARNATIONS say it has. The report does
not say so but implies that the Presi-
dent and his administrative authorities
should go slow in the matter of general
wage increases; that the guard against
imitation should not be let down.
When the Little Steel formula was
set in 1912 it permitted wages to be in
creased up to Is per cent above the
rates in effect on January Is, 1941. The
margin allowed was approximately the
percentage by which the cost of living
index of the Bureau of Labor Statistics
had advanced 1t was the administra-
TONS purpose then to hold prices and
wages steady to prevent imitation.
Dispute Extent of Rise.
What has happened since then is the
bone of contention. Despite all the
controls there was squirt in the "cost
of living" as measured by the Bureau
of Labor Statistics (BLS Index. In
May, 1943, it stood at 1241, which was
an advance of 24.1 per cent in little
over two years. Nine points of this rise
had been registered in the year since
adoption of the Little Steel formula.
A Tightening of controls, application
of subsidies, encouragement of food pro-
duction, more effective operation of the
Office of Price Administration-all these
had a Stabilizing influence with the re-
salt that there was a recession of the
index to around 122 and 1913 where 1t
remained for a year. In May of this
year the pointer started to rise again,
hitting 124.1 in that month, 1874 in
June, 1851 in July, 1858 in August and
1855 in September. There was a frac-
tional drop in October to 1854
This index should be adjusted, the
Presidents Cost of Living Committee
says, by the addition of 81 to AZ points.
rejecting certain hidden increases.
If the BIS index were accepted as a
true measure of the "coSt of living
the rise would stand today at % to 80
per cent above the level of January,
1941, with an index figure of 129 or 1870.
Organized labor, however, disputes the
validity of the index, asserting the in
crease is around 40 to 45 per cent when
all pertinent factors are considered.
Committee Is Divided.
The Presidents committee, of which
the chairman is William H. Davis,
chairman of the War Labor Board
does accept the BIS index as IAN ac-
ceptable approximation of changes in
the cost of living for urban workers."
but not without protest from tho two
labor members, George Meany (AFL)
and r. j. Thomas (CIO). The two
industry members, Horace B. Horton
and George K. Bait, agreed with Mr..
Davis.
Two distinct points of view are dis
closed by the report and the explanatory
statements accompanying it.
First, that of Chairman Davis and
the two industry members, that changes
in the cost of living may be fairly
measured by fluctuations in prices paid
from time to time for a standardized
group of goods and services such as
normally are utilized by families in the
Wage-earning and low-salaried class
Second, that of organized labor rep
what the family spends for living.
The BIS index is intended by the
Bureau of Labor Statistics to be
composite figure representing the price
of standard basket of commodities
and services. In that basket, presum-
ably, are the normal requirements in
the way of food, clothing house fur
nishings, rent, fuel, electricity, ice, car
fares, automobile maintenance, medi-
Cal care, recreation, personal care chair
cuts toilet articles, etc., water rent.
laundry and postage
Want More i'm Basket.
This serves well as price index
the labor representatives agree. But
they balk at acceptance of this stand
ard basket as providing adequately for
the family livelihood under today's con-
ditions. They think there should be
more in the basket.
The controversy over what should
be in the basket really accounts in
large measure for the discrepancy in
calculating the rise in the cost of liv-
ing. For instance, the labor members
thought eating out at restaurants
which has increased greatly even among
wage earners, should have been more
fully recognized as a factor in living
costs.
What this amounts to is that labor
does not want to have its wage base
tied to a fixed standard of living.
'"The American Federation of Labor, !"
said Meany, in his comment on the re-
port, "has never agreed to the principle
of basing wages on cost of living or on
price imitation The established wage