The Waterbury Democrat., 1945-10-31
New Wage Price Forn,uLa Defined With Questions

Washington Oct, 3l-(UP)-Sta- bilization Director John O. Collet iS- sued the following questions and a1l- swers to help define the new wage price formula announced by Prest- dent Truman:
 |. Must an employer now get Government approval before in crease wage? No with, two excep- tioi1s- the building and construction industry and agriculture labor.
 2. May unapproved wage increase be used as basis for an increase in price ceilinga No. Increases must be approved by Government agen- cies before they can be used as arr gument for 8 price boost.
 3. What does Government "ap- provap of 8 wage ]. increase now mean? It means that an approved wage increase can be used as basis for price increases resisting price re- ductions or increasing costs to the government. Except in this sense the Government no longer formally approves or disapproves any wage. Increases.
 No Government Decrees
 1. Does the fact that wage in- crease is approvable under the new standards mean that the govern nent decrees 1t must be granted? No. Increases are to be granted by employers or as the result of collec- tive bargaining, coU1ciliation or arbi- | tration.
 5. When an employer puts 8 wage increase into effect without getting prior approval of its use for 1 pricing purposes, may he seek such approval afterwards? Yes. Approval will be given or withheld on the same basis, regardless whether he sought 1t before or after.
 6. Does an employers failure to seek approval of wage increase mean that he valves indefinitely any right to have it considered for pricing purposes? No. He may think he can absorb the wage irl- crease without price boost but find out later he is mistaken. In such cases, usually after a six months test period, the OPA will take it into ac- count for price purposes:
 Other Factors Considered | '. Is an employer who granted an unapproved wage increase barred from receiving any price relief what ever unti lthe expiration of the test period? No. Other cost factors, such as materials, may be taken in- to account before the expiration.
 8. If his wage increase is ap- proved, does that mean he can in- crease prices by the same amount that he has increased wages? NO. OPA will consider the wage increase merely as an element of overall costs.
 8. What are the three specific classes of wage increases which will be approved for pricing purposes? i. Increases where the percentage increase in average straight time hourly earnings since January, 194l, has not equalled the percentage in- crease in the cost of living between January, 1941, and September, 1945. 2. Increases needed to correct i1- equities in wage rates among plants in the same industry or locality. 3. Increases needed to boost production in an industry deemed essential to reconversion and in which existing rates are too low to recruit needed manpower.
 List Is Flexible
 10. Is the above list of classes final and infiexible? No. Other classes msy be added if the Stabili- zation Administrator thinks they are needed :.
 ii. What will be the practical eff feet of the first of the above classes2 The cost of living has increased about 30 per cent since January, 194l. If the average straight-time hourly earnings of employees have increased by less than that, prices can be raised enough to make way for higher wages.
 .12. The practical effect of the second? There now are distortions in wage relationships between diff ferent plants. Price ceilings now will not stand in the way of wage i adjustments. Greater fiexibiiity vii be possible because increases VIII be made on a plant rather than an industry wide basis.
 Studies to be Continuous
 l3. The practical effect of the | ..-4..... Aa Tyoi11,u,and Nnv KvsAf