Evening star., 1945-01-14
Steel Pay Increases
Worry StobiIizers
Dangerous Price Rise Is Seen
Unless Vinson Makes Stand
By James Y. Ne,pton

By James Y. Netpton.
Authorization forces received a serious
setback in the decision to boost basic
steel pay and prices and no one is more
aware of this now than Government
stabilization leaders themselves.
1t Is debatable point whether any
course other than retreat could have
been followed in the steel issue at this
critical stage of the war. The admins
tration knows well, however, that it soon
must make firm stand along the cost
control line. 1t decided, apparently
after great mental torture, to pass up
the steel case and await possibly more
favorable opportunity to go to the mat
with infiationary pressure.
But more trouble than was first fore
seen now is brewing for the men as
signed to "hold the line" They presently
are fearful the steel pay and price lad
justments" may set in motion an in
fationary spiral that would markedly
affect not only the already staggering
cost of the war, but the cost Of civilian
goods in the postwar period as well, for
~ AAoW dPPCoAo b1l0t tlIC CUot Vi UOJIl
wage raises and contemplated price in
creases will be higher than was indi-
Gated by Economic Stabilization Director
Wilson'S cryptic announcement two
weeks ago that he had approved the
War Labor Boards fringe" wage ad-
justments for steel workers.
Once of Price Administration experts
say the average pay increase going to
the 100000 basic, steel workers will be
just over 8 cents an hour rather
than the early estimates of from to
7 cents, and the increases in price
of certain steel products" which Mr.
Vinson said must be allowed industry,
regardless of the wage issue. to meet
minimum profit requirements Of price
control law probably will cover hall of
the Nations annual output of finished
steel. The cost of the increases at the
basic level alone will be around $780,
100000 a year, about the same as the
wage adjustments.
Besides the direct cost of the de-
cision, price control men admit they
will have terrific job on their hands
to prevent the price increases from
spiraling all the way up through the
many types Of goods containing steel.
There will be still more trouble in con-
fining the price and wage boosts to the
field of steel alone. The reasons for the
latter are twofold.
i =
First, steel probably Is the most widely
used basic material and, historically, its
price has served as a bellwether of all
industrial prices.
Then, the hole in the stabilization
line made by the steel decision is great
encouragement to all other industry and
labor groups equally anxious to obtain
wage and price boosts.
A sizable chunk of the wall the Gov
ernment has maintained against infia-
ton went out with announcement Of
the price increase. The morale" effect
on those who guard that wall as well as
on those who inadvertently try to push
1t down must be considerable. Here
was a material the price of which,
along with other basic metals such as
copper and aluminium, had been held
firmly to 1889 levels all through the war
OPA can show saving Of scores of
billions against First World War prices
as result Of firm action on prices of
materials which have gone into our
weapons in this war.
Even though the WLB turned down
the steel workers major request of q
base pay raise Of II cents an hour, the
fact that the CIO union succeeded In
getting the Scent boost through
the fringe" adjustments must be of
great encouragement to the big seq
ments Of labor whose demands for
higher pay must be dealt with soon by
the Government. In this category are
millions of workers in the textile elec-
trical, meat packing house, automobile
and aluminium industries, plus John L.
Lewis United Mine Workers, whose cur
rent work contract expires this spring.
Mr.. Vinson must pick some one in
that lineup as the first opponent for
the firm stand" he Is reported au-
thoritatively as determined to make.
1t Is said that several times while
considering the steel case he was ut
the point of turning down the wLB
wage recommendations, reasoning that
such action would make much easier
the handling Of subsequent wage de-
mands. He finally concluded, however,
that the consequence of an unfavorable
decision might be too dangerous.
OPAs continuing investigation Of the
steel industry price and profit posi-
ton provided an "out." 1t showed as
correct the industry contention that
many steel products were being pro-
duced at little or no profit-even, In
some cases. at loss. BY a curious
juggling of product prices incompre-
hensible to the layman. OPA thought
it could set the profit position of the
industry so 1t could absorb the wage
increase. Certain product price In
crease must be allowed, it said, "irre-
spective of the wage decision"
Price officials dispatched several let
ters regarding their industry profit study
to Mr.. Vinson before one acceptable for
quotation in the wage decision an
nouncement was found It was an effort
containing single paragraph very care
fully worded.
The first part stated that price ad-
justments must be made anyway. The
final significant sentence read: "It is
the judgment Of the price administrator
that after these price adjustments are
made the proposed wage increases will