Evening star., 1947-01-16
First Economic Report
Cu.led PIuinIy CoIored
Propaganda Used to Cover Up
Administration Mistakes
By David Laurence

By David Laurence
When the Congress passed the So
called Full Employment Act and pro-
vided for set of economic advisers to
the President, it was assumed that at
last the public would get an unbiased
analysis of current economic happen
,ings. But President Truman's flrst
economic report" is so plainly colored
with political propaganda that the pub
lie cannot distinguish between. economic
ANALYSIS and arguments calculated to
cover up and defend the administra-
tion's mistakes since WI day.
Thus, in the Presidents economic re-
port the phrase wage adjustment" is
used with a curious timidity that pre-
vents the writer's of the document from
conceding that, when the cost Of living
goes down, wage costs ought also to go
down. Likewise, while much space IS
given to the high cost Of housing, not
line In the whole report discusses the
wage rises which have made building
costs almost prohibitive.
Only In one statistical table, buried
in the appendix, does one find any clue
to'the difficulties Of the American people
with residential construction. The table
reveals that gross weekly earnings of
workers in private building construction
went from $31.70 in 1910 to $500 in
October, 1916. Also bituminous coal
mining rates went from $24.71 per week
in 1910 to $62.54 per week in October.
1916. In manufacturing, gross weekly
earnings scared from $500 in 1910 to
$45.6s in October, 1916.
The wages in non-durable goods in
dustries have about doubled since 1910.
Yet, in spite of all these statistics, the
paragraph devoted to wages" in the
Presidents economic report confines It
self to what happened just prior to and
Immediately after July, 1s46, when
President Truman got himself into q
jam with Congress in vetoing the price
control bill.
Wage Climb Ignored.
There is not line in the report which
states that the price rises have been
in any way due to increases in wage
costs to employers.
The report ignores the steady upward
climb in wages since 1910 to October,
1946, and naively remarks: "Since July,
1916, there has been some further in
crease in wage rates, average hourly
earnings, and average take-home pay,
but less than the increase in prices.
Thus real earnings have fallen"
Naturally, if one lifts out a brief
period, there will be fluctuations but in
any accurate comparison with prewar
wages it will be found that pay en-
velopes, despite all the hullabaloo about
take-home pay, are above prewar in
many instances and actually approxi-
mate what they were in wartime. Yet
the volume Of business done by the en-
ployers has necessarily been curtailed
due to the drop in war contracts.
It would be interesting II the Senate
or House asked the President to trans
NIT the actual wording OF the econo-
mists' report undiluted and unchanged.
For it Is evident, in examining different
economists did get past the political
censors one or two statements that con-
tradict the administration defense of
its reconversion policies.
After mentioning fears that purchas-
ing power Is being seriously reduced,
the report gives this warning about
future wage-increase demands:
1T would be unrealistic to expect that
this increase in real purchasing power
Of consumers could occur solely through
corresponding increase In money in
comes. An attempt to raise income
by the amount necessary would mean
such large increases in money wages and
salaries at certain points as to threaten
curtailments of production or wage
price spirals. Further, there is no prac-
tical way to distribute such wage and
salary increases throughout the whole
population in such a manner as to effect
the desired supports to the market. The
groups of wage and salary earners whose
purchasing power has been most reduced
are the very ones who are likely to par
ticipate least in an increase Of money
earnings. Such concentration Of pay
increases within particular groups would
make even more difficult the task of
obtaining a sufficient total increase to
sustain maximum employment, produc-
ton, and purchasing power"
Result Of Imbalance.
If this is good economic reasoning
for the future, why, it might be asked,
doesn't it apply equally well to the
past-the period between January and
April, 1916, when President Truman
was urging industry generally to grant
a fiat 18 per cent increase in wages?
Now 1t turns out that large number
though not all-of the 100000 union
workers imposed higher prices not only
upon themselves but on the unorganized
individuals who constitute the other
As, ,O00, 900 of the Nations workers. This
imbalance is what is causing the present
naladjustment and, If America expert
ences q depression in the next 18
months, it should be called "the Tru-
man Depression" because it came from
White House encouragement, If not
sponsorship, Of blanket wage increase
at q time when production had not been
resumed and price policy could not be
stabilized.
It's too bad the President didn't
have, in the early part of 1s45 when he
made bis public statement urging an
18 per cent increase in wage scales, the
following piece of advice for the future
Just given in the economic report: But
Just as there can be no universal or
uniform rule to govern price reductions,