Evening star., 1945-10-15
Evolutionary Changes
In Wage Policy Sifted
Defation Talk Heard as Often as
Initiation, Says Observer

Defation Talk Heard as Often as
Initiation, Says Observer
By David Laurence
Changes In policy which may be de-
scribed as evolutionary insofar as price
and wage relationships are concerned
are under consideration by the admin
istration.
1t was inevitable that the Govern
ment, which still retains control over
the prices OF many articles but has re-
leased most of Its control over wages,
should find itself in contradictory II
not unworkable position.
Until now the fear of imitation has
been used to keep certain prices from
breaking through their ceilings but the
demands of labor unions that they be
permitted to retain their 80 per cent in
crease and be paid for 40 hours work
what they got in wartime for 81 hours
have served to dramatic the difdculty
of maintaining price ceilings when wage
costs are rising.
The talk of preventing deflation de-
velops almost as frequently now In ON
cial discussions as the argument against
imitation. The truth, of course, is that
generalizations about the economic sit
uation are proving more and more diff
cult to make and the prices of some
materials needed to manufacture are
not controlled, whereas finished prod
ucts are kept at ceiling prices.
Transition Too Sudden.
Never was there a more convincing
demonstration of the need for overall
planning and overall guidance of the
whole economic system than in the
present chaos. Government oficials are
beginning to realize it. Nobody wants
permanent controls but it is apparent
that the transition from wartime con-
trols to complete freedom of action in
| certain phases of the economic situa-
ton has been too sudden and too dras-
| tic.
Another factor that Is retarding the
/ reconversion period is the public mis-
| understanding of the basic causes of
the present wave of strikes Those who
do not believe IN collective bargaining
| have joined in many instances those
who are inconvenienced by strikes.
There is tendency to denounce the
workers without trying to solve the un-
DERIVING, fundamental grievances or to
| meet the fears of insecurity that doni-
nate the minds of millions of workers.
This is a period of superfciality, if
not indifference to fundamentals and
it Is not surprising, therefore, that the
effort of different groups In the eco
nomic system to achieve an equilibrium
and level OF security both as to profits
and wages should to some extent take
on all the aspects of contest in selfish
ness and greed.
The administration has erred in as
suning that the major economic groups
could reach an adjustment without help
from the Government or that strikes
could be prevented from growing by
letting industry after industry 20
through the painful process of readjust-
ment by the old-fashioned devices of
economic violence and struggle.
Wage Hike Expedient.
One way out, and it is only an ex-
pedient and of course will not last very
long, is to allow prices to rise in order
to compensate for wage increases that
must be granted. There is talk of al
lowing Is per cent wage increase to
be absorbed in new prices but recurring
the profits Of the producers or sellers
to absorb as much of the rest of the
80 per cent as has to be granted. This
merely means that while the frst Is
per cent is taken care of, the remainder
becomes an added expense to be met
out OF earnings. In some instances this
will be feasible. In others it will not be.
The whole thing is an example of an
attempt to carry water on both shoul-
ders-to retain controls and relax them
at the same time-though it is obvious
an economic equilibrium or balanced
economy will not be possible until the
Government can get all economic groups
to accept and comply with certain fun
oamental principles rather than explicit
regulations.
For neither imitation nor defatiop
can be minutely controlled by Govern.
ment and the need of the moment is TO,
more knowledge by the public of the
vital factors and influences that are Al
work in the interdependence of wage,
and prices. Only the Government car
provide that information.
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