Evening star., 1946-12-22
Higher Pay by Spring
Without Strikes, Price
Rises Seen by Nathan
BY the Assoeioted Press

Economist Robert Nathan pre-
dicted yesterday that industry will
grant new round Of pay boosts next
spring without increasing prices and
that strikes will be avoided.
The 38-year-old former Govern
ment war production planner con-
ceded in an interview that many will
disagree with him-as many have
disputed his contention that industry
can afford to give workers Is per
cent wage increase.
This may be wishful thinking but
I feel sincerely that we will see
peaceful settlements with workers
getting an increase" Mr.. Nathan
said. Il know that many people will
differ with this opinion.
"on the whole I think industry
does realize there is need for rails
ing wages and that it has the ca
pacity to give something. On the
other hand labor won't be inclined
to disregard any reasonable offer.
"The whole environment of the
situation look good to me, and
think the present discussion We
are having about wages and profits
is healthy and will contribute to-
ward reaching a solution without
having strikes"
Mr.. Nathan said he believes both
labor and industry want to main
. tain production without interrupt
ton.
The economist, whom the CIO
employed to draw up its arguing
! basis for wage increases, forecast
they would be achieved without any
appreciable rise in prices.
II say that for two reasons" Mr..
Nathan explained. "One is that
business already is afraid of con-
sumner resistance to high prices. It's
very hesitant to raise prices any
further. That's reflected in the
dip in the stock market.
Business to Hold Price Line.
"The other reason is that real
competition is developing in busl-
ness again and it is rapidly becom-
ing clear that business simply won't
be able this time to pass on any
further cost increases in the form
of higher prices"
Mr.. Nathan said many dissenters
to the economic analysis he made
for the CIO have failed to recog-
nize that his findings that profits
justify a wage increase are con-
clusions drawn on an overall
basis" and do not necessarily apply
to each individual industry. He dis
closed he is making a separate eco
nomic analysis of the steel industry
for the CIO United Steelworkers
Union, which is making new wage
demands.
From that overall basis" he OBJ
served, the present relation of
profit to wages is unSound. Either
prices must come down or wages
90 UP. Otherwise We will have a
break next year. I think the odds
against prices coming down are
about / in 20, but the odds for a
wage increase are better than $685."
Food Price Declines Reported.
A number of food price declines.
were reported yesterday by the
Governments Bureau s$of Lahpr,
statistics. > 1T said food prices feh'
from is to 35 per cent In II of u,
large cities between November 20
and December IT.
Reminded that industry MAIN
tains that its present profits are be-
low normal, Mr.. Nathan reiterated
they are now at level which would
yield SIS 5000, 100000 on an annual
basis or substantially higher than
they should be-" He suggested pro-
fits could settle down to $4,000, ,000,-
900 to $4,000 000, 900 a year and still
provide a fair return on invest
ment."
Il would much rather see bust
ness make good profits year after
year than do what it's doing now
making killing with the threat of
serious losses later on in depres-
sien," declared the former War
Production Board planning chief
and deputy reconversion director.
He was asked about a passage in
his book, 'Mobilizing for Album
dance" written in 1914 while re-
cuperating from a back injury suf-
fered after a brief period in Army
basic training. In the book he
wrote that prices always historically
20 up after wage costs rise.
That is true as a general rule, }"
he said. But now profits are so
high an additional wage increase
can be absorbed, and prices are SO
high business will be afraid to raise
them further