Evening star. [volume] (Washington, D.C.) 1854-1972, 1946-07-29
Labor Politicians
Face Crisis on OPA
Vicious Circle of Prices and
Costs Near Peak
Bv David Laurence

BY David Laurence
Labor union politicians are not happy
over the price increases just announced
by the restored OPA. This Is because
many labor union chiefs have forced
costs upward and the OPA has no choice
now but to add those costs when au-
thorizing the new prices.
A deliberate effort has been made
to hide from the country the true cause
Of the present imitation and the con-
siderable part that union labor leaders
have played, through their strikes and
wage demands, In sending prices up
ward.
Before the present OPA controversy
that is, before June 30--there were
1918 price increases granted by the
OPA to individual companies In the
first half Of 1916. OF these 4318 were
granted in the first quarter and 9,425
in the second quarter.
500 Industry Wide Boosts.
The extent of these increases in
prices can be best understood when it
is noted that there were 592 industry
wide increases with the approval of
OPA between January ! and June 80
of this year.
The new wage-price policy was an
nounced on February IA by the admin
istration to help absorb the high wage
increases forced on the country by the
major strikes. This policy didn't get
under way from an operstional stand
point in oPA until April, and that is
why the second quarter of this year
shows so many price increases as COM
pared with the first quarter.
AS soon as the revived OPA began
functioning again last week, announce
ment was made of many increases in
prices. Higher prices authorized for
coal and solid fuels were significant.
The OPA itself explained that the
boost in coal prices was attributed
chiefly to increases in freight rates and
shipping costs, which, in turn, were
due to the increased prices the rail-
roads had to pay for coal as a result
OF the Presidents grant of increases
In wages to the coal miners and rail
workers.
In many of the price increases or
dered, such as for lumber, paper board,
fibre board, insulation products. and
various materials used In construction,
the raises resulted in large part from
labor costs.
CLIO Attacks OPA.
1t Is quite natural to find the CLIO cry-
ing out that the OPA is increasing prices
when 1t should be holding them down.
But the OPA is compelled to take into
account labor costs, and prices must
necessarily rise. What is happening. of
course, is vicious circle. Labor became
panicky after vi day and didn't wait
for production 70 attain normal levels
but insisted on 80 per cent increase
in pay at once to make it possible for
wartime take-home pay to be retained.
Then President Truman enunciated a
labor program encouraging 1s-cent-an-
hour increases. The result was an infia-
tionary trend which really forced the
whole OPA crisis.
Manufacturers simply could not get
production going unless they had a mar
gin above expenses. The OPA was trv-
ing to squeeze out the profits but In
numerous instances was unable to do so.
Labor union politicians clamored for
the profit squeeze because the cleft
wing is not interested in the profit sys-
tenn, being eager to produce the chaotic
conditions that bring on state socialism
or naturalization of industries.
Today the left wing" is starting a
new campaign. 1t is an attempt to hold
OPA responsible for the price increases.
The OPA Is merely carrying out the.
mandate of the President and the Con-
gress, who agreed that the private enter
prise system was not to be sabotaged BY
allowing wage increases which manufac-
tuners could not include in their costs,
Left Wing" Faces Setback.
More will be heard from the cleft
wing labor groups. but actually they
will be disappointed eventually in the
results of their crusade. In due time.
production will catch up with demand
in food products and prices will come
down. and the excuse of cost of living
increases will no longer be available as
means of reopening labor contracts.
What the union politicians conven-
iently forget. is what the OPA has been
doing since February IA while the old
law was in effect. The wage-cost item
has been pyramiding rapidly and, In the
end, the workers of the country NAV
find their cost of food Is down to reason
able levels but the price of manufactured
articles needed for construction or re-
pairs or for transportation or other
non-food necessities will steadily 60
upward, thus diminishing the purchasing
power Of the dollar.
The vicious circle will continue until
labor leaders concede that increases In
wages must be accompanied by CORE
spending increases in output or depres-
sions and unemployment become inevi-
table
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