Evening star., 1947-09-19

wages and prices have risen, wages
on the whole more than prices, we
had better work toward a stabiliza-
ton Of wages and prices at some
new level, perhaps so or go per cent
over 1899.
60-Cent Minimum Wage.
| =, Increase in supply and some de-
crease in abnormal demand should
bring prices back to that level from
the present level of 80 to 100 per
cent increase. The excess increase
in wages over so to so per cent can
probably be compensated in numer-
GUS industries by an increase in
productivity. If we set so or 60 per
cent we can probably be compen-
sated In numerous industries by an
increase in productivity. If we set
so or so per cent as the goal, we
should then encourage the increase
OF all subnormal wages and salaries
to that point compared to prewar.
II prewar wages in any industry or
profession were subnormal, the in
crease might well be larger. In this
connection, I think the minimum
wage should be increased from 40
cents to at least so cents. I do not
believe that such increases in SUBJ
normal wages, or increases to white
collar groups or to the ranks of un-
organized labor, will tend to in
crease prices, but it will ease the
burden of high prices for millions.
We should insist upon the vital
necessity of increasing the produc-
tivity of workmen by better machin-
cry, better methods and better CO.
operation.
/ Second, there should be a further
reduction of Government expenses
and a corresponding reduction In
taxes, and we should have it at once
in order to head off the inf1ationary
effect Of further increases in wages
in the higher wage brackets.
Third, we should restrict exports
Of those products where supply is
short, as in the case of corn, and re-
strict the total volume of exports
more than We do today.
Congress has given the President
the extraordinary power of limiting
exports. 1t seemed to be necessary
in view Of the fact that we had
scattered an unlimited amount. The
great increase in exports, which has
had such a substantial effect on our
own price level, is not matter SOLE
ly OF relief supplies for Europe. AS
matter of fact, compared to pre-
war exports, there has been great
er increase in exports to North and
South America than in exports to
Europe. There has been little at
tempt to exercise export control at
all.
Fourth, much can be accomplished
by campaign of education. There
have undoubtedly been some exces-
sive profits and the President has
been right in urging upon those who
have such profits, reduction in
their prices. If extra funds are
available, it is far better from an
economic standpoint for corpora
tlons to reduce prices rather than
increase wages or dividends further.
A reduction in prices will benefit
millions compared to the thousands
who gain from an increase In wages
or dividends.
PROFITS Plowed Back.
The CIO has made a great deal
out Of the increase in profits today.
Up to the present, as the President
points out in his last economic re-
port, high corporate profits have
provided funds for a substantial pro-
portion of the heavy volume of busi-
ness investment. In other words,
they have not been boarded or dis
trlbuted to the stockholders. but
have been spent to improve plant
ana purchase equipment thus pro-,
viding jobs and income. The sug-
gestion is that this profit should
nave been used for wage increases.
Corporate profits today amount to
only about 10 per cent of the total
national bill for wages and salaries.
SO II half of this profit had been
transferred to the wage and salary
bill 1t would have justified only
about general per cent increase
OF course, the increase already has
been much greater.
Even allowing, however for the
necessary expenditures on new plant
and equipment. which make for more
employment and greater produc-
tlVlty, some manufacturers and dis
tributors could reduce prices. Too
many people today think they are
entitled to more than they can
legitimately claim for the service
they perform. They do not realize
their return has been abnormally
large because of imitation. The
sooner they get back to earth, the
better off the whole Nation will be,
But the natural force of steady re-
covery under free competition, and
increased production, will, I believe
soon reduce profits to normal. They
should not be subnormal as they
were in the 1930s. The millions OF
unemployed during the 30s resulted
largely from the lack of funds and
incentive for business concerns to
expand their facilities and increase
production.