Evening star. [volume] (Washington, D.C.) 1854-1972, 1946-07-31
Wage Spiral Leading
To InfIotionury Crash
More Pay for Less Work Policy
Sure to Bring on Depression
By David Laurence

| oeA - ~ LII AhS oik DSPA SooioA
By David Laurence
There is much talk nowadays about
the inevitable depression" But there
is as yet no emphasis on the main
reason why Great Britain and other
nations are seeking to prepare them
selves against the crash they anticipate
in America.
The main reason, of course, is that
labor union leaders in America have
adopted and put into widespread effect
the slogan of more pay for less work.
and the Truman administration has en-.
couraged that policy.
AL over the United States the i'm
preston has arisen that membership
in labor union means increases in
pay every year irrespective Of what the
effects may have to be on prices.
Labor leaders, fearing for their own
jobs as officers in the unions, are often
reluctant to tell the membership the
truth, namely, that there must be an
end to the program OF more pay for
less work"
In other words, unless America can
devise a way to increase the output per
man, the wage spiral leads to an in
dat:onary crash.
Cites Printing Industry.
A conspicuous example OF how the
process works is furnished by the print
ing industry where, unless there Is
reversal promptly of the trend, not only
tens Of thousands of employees in the
printing trades will soon be out of work
but many others who depend indirectly
for their livelihood on printing will be
similarly affected.
The latest figures from the Federal
Bureau OF Labor Statistics show the
man-hour output in 1945 was II per
cent lower than in 1899 in the printing
and publishing industry. whereas the
hourly cost Of labor increased by Is
per cent.
This means that, for less work done,
the printers have been paid as per cent
more wages. No national economy can
survive that kind of trend.
Lately the printing unions, which are
considered to be above the average of
skilled workers in America in wage pay
ments. have proposed In Chicago and
Washington tremendous increase in
wages which Is believed to be a pattern
for printers throughout the Nation.
The proposals, applied on Nation wide
basis, mean an increase in costs over
i. present levels of 1856 per cent.
Cost In Dollars.
The dollar cost to the printing and
publishing industries OF a wage rate
such as is being asked in Washington.
would amount to $l,102, 000, 900 more
than the ls45 wages. Without any
change In the prices of products, the
result would mean before taxes an
estimated loss for the industry of $685.
100000, as compared with profits for
1915 of $685., 100000.
This would mean also a concentration
In the hands Of big business OF much of
the volume now performed by small
businesses. Thus for 10 years between
1888 and ls43-the last year for which
ofdcial statistics are available - the
Bureau Of Internal Revenue reports that
Gill corporations reported losses aver
aging $4,000 year and 1898 reported
profits averaging $358,000 a year. It
will be seen that an increase In wage
rates will bear heavily on the smaller
corporations which normally experience
difficulty In operating at q profit any
way.
The printers, on the other hand, have
had substantial increase in annual
wage earnings since 1899. The rate
of increase of annual income has been
even larger than in the hourly earnings.
In April, 1916, the annual rate of earn
ings per worker employed in the print
ing industry was 157 per cent Of the
1889 figure. or 100 per cent after ad-
justment for increased living costs
Trends have differed very little as be-
tween those in newspaper or periodical
and the book or Job segments Of the
printing industry.
Basic Rates Quoted.
1t will be noted that printers unions
often quote the basic union wage rates
which have increased relatively little.
but, with work weeks of IS hours or less,
1t Is in the overtime where the premium
is paid. The basic rates usually cited
exclude payments for overtime or vaca-
tons or holidays.
Even before computing the proposed
increases now under consideration In
various parts of the country, the printers
have had a rise in real income in re-
lation to man-hour output. The Bureau
OF Labor Statistics figures show that
hourly earnings OF production workers
in printing and publishing were A per
cent higher in April, 1916, than the
1899 average, whereas living costs rose
80 per cent during this same period.
The result was per cent rise in real
income" based on hourly earnings. In
the face of an IL per cent drop in man
hour output-which, of course includes
time not worked but paid for-the result
is a % per cent rise in real income"
This is not only true of the printing
industry but to a large extent of other
industries. The Nation cannot afford
to pay the prices that must result from
a policy Of more money for less work.
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