Evening star., 1947-12-14
Union Fight Expected
Over Truman Controls


Effective Wage Regulation Essential
Part of Any Price Control PROGRAM
By Gerard d. Reilly
II President Truman goes forward with his
legislative program Of price and wage con-
trolls, the next regular session Of the Eightieth
Congress will be marked by q battle with the
labor unions which may very likely svrpass in
bitterness the controversy at the past session
OF the Taft-Hartley Act. For any legislation
which would make the Presidents plan truly
effective would circumscribe the activities Of
organized labor to almost the vanishing point.
Despite the resentment Of the unions at the
passage of the Labor Management Relations
Act, that statute merely prescribed some Of the
abuses which have developed in recent years.
There are many unions In this country whose
organizing and bargaining strength does not
depend upon such devices as the closed shop,
the secondary boycott, mass picketing or feath.
erbedd1ng. Such successful unions as the Pat.
tern Makers League, the International Printing
Pressmens Union, and the Textile Workers
fall into this category and their normal activ.
tiles have been affected very little by the new
law.
Since wage questions lie at the heart of virtu.
ally every collective bargaining negotiation, q
statute freezing wages would be blow to the
principal objective of every labor organization.
The experience Of the country under the Emery
ency Price Control Act, however has demon.
strated that unless such a drastic remedy Is
adopted, any attempt at price control is futile.
1t will be recalled that the original OPA Act
sponsored by Leon Henderson was barren of anv
provision for placing ceiling on wages As
a result, the OPA system was so ineffective
that Mr.. Henderson was driven in less than q
year to ask that the first measure be supple
mented by Wage Sterilization Act.
This system worked reasonably we'll until the
unions discovered that the War Labor Board,
which had the duty Of enforcing this part Of
the law, could be pressured by strikes and
threats Of strikes into making substantial ad-
Justments upwards While these were euphe-
mistically referred to by that agency as fringe
increases, 1t soon became apparent that the
purposes for which the Wage Sterilization Act
had been passed were frustrated When the
war ended the board having outlived its use
fulness, was one of the first instrumentalities
to be discarded. Instead Of transferring the
administration Of the wage act to OPA, where
it properly belonged, however, the President
made the mistake Of suspending It entirely
This paved the way for the wave of strikes
which eventually brought about the complete
destruction Of price controls as we'll The SEEM
ingly endless cycle Of wage demands and COM
pensatory price increases which has made in
hation the major domestic problem on the
agenda OF the Congress was the unhappy sequel
Although there is great difference OF opin-
ion among economists as to the value Of any
system Of controls in q peacetime economy,
our recent experiments in the field have made
it obvious that If such q program is to be
instituted again, three major notifications In
the methods employed during the war are
called for:
!. The administration of wage and price con-
trolls should not be divorced. 1t is absurd to
have the agency vested with discretion in
wage matters free Of responsibility for the
price structure. The effect Of any wage ad-
justment always should be gauged by the same
officials who are in position to know and ap-
praise the effect Of their decisions on the level
OF prices. ..
2. The administration Of the system should
be entirely in the hands Of Government Off
cials. tripartite board which contemplates
and union representation may
not be devoid of merit in the field Of media
tion and conciiation, but policies Of compro-
mise have no place with respect to the con-
struction Of q statute
3. The sanctions should be adequate to guar
antee respect for the law Although the pen
alties OF fine and disallowance OF income tax
deductions under the Wage Sterilization Act
were sufficient to deter employers from grant,
ing wage demands outside the framework of
the act, regulations which contain no CORE
spending deterrents to striking are fatally
defective. In fact, they tend to encourage
resistance to an act OF Congress and
weaken the prestige OF the executive branch
Of the Government
When Secretary Schwellenbach appeared to
testify before congressional committee last
week it was far from evident that any forth
right measure for implementing the Presidents
had been drafted The Sec
retary spoke of instituting wage controls in
only a limited area, but indicated his pro-
posals did not embody a wage freeze. As he
explained it, the control would be exercised
only in situations where the proposed increase
would necesstate an upward price adjustment.
It Is difficult to conceive of such situations
being really limited, however, unless the In
creased wage was merely to compensate for
increased productivity
Several commentators left the hearing with
the impression that the Secretary envisioned
the creation of an agency on the model Of the
Wage Sterilization Board If this is all which
the proposal contemplates, the President would
be well advised to drop the entire scheme.
Nothing did more to discredit Government
ventures into the field of wage and price reia-
tionships than the futility Of the Wage Stabili-
zation Boards attempts to have its economic
judgments accepted when they differed from
wage adjustment arrived at by collective bar
gaining. 1t Is better to have no board at all
than one possessing such limited powers that It
must suffer the humiliation of being overrlled
in order for the Government to secure resump-
ton Of production In some vital industry.
kobIesse ObIiee .. ..
from the Christian Science Monitor.