Montana labor news., 1948-08-19

The price collapse which follows
initiation spells disaster for work
en-, and for farmers and business
men.
Workers are also losing ground in
the present initiation, as has already
been shown by government figures on
real income. Now a government study
just released shows how price increases
have forced workers to spend their
savings. Early in lqH skilled and
semi skilled workers families had re-
serves averaging some $500 each, in
u. S. savings bonds or bank accounts.
They had to draw down these reserves
by more than one-third. In 1913 their
savings averaged only $3.50. Among
unskilled workers, the average family
today has no savings left. Manage
ment and professional families on the
other hand have not in general been so
injured by initiation. In spite of high
prices they have on the average in
creased their savings. More than 40
per cent OF them have incomes over
5000 a year, In addition to the sav-
ings shown on the chart, more than
20 per cent OF management and profess
sional families have investments in
stocks and bonds of private companies.
For many, such investments arc sub
stantial in amount. Only 5 per cent
of workers families have any invest
ments in such stocks and bonds, and
their investments are small.
The tragedy Of initiation for low in
come families is wildly brought out
by several other facts. More than a
million families with incomes under
5000 have spent all their savings. In
1916 they had a reserve laid by; today
they have none. OF those at this in
come level who had any savings at all
in 1947, a per cent drew down their
savings during the year SO that they
had less in reserve at the year end than
at the beginning. More than half OF
those who cut into their savings last
year did so to meet the high cost Of
ordinary living expenses and taxes, OF
for sickness and other emergencies
These families over 7 million saw
their savings melt away without buying
the permanent improvements such a:
automobiles. electrical appliances, new
homes which American workers hoped
to own when they set aside their saw
ings during the wal and after. About
10 per cent of all families with in.
comes under $1,000 had this experience
last year.
Some families in this income GROUP
managed to increase their savings II
spite of high prices, but not so man,
as those who drew down their re.
serves. OF all those under $1,000 who
duced them, 50 per cent increased then
had any savings in 1947, a. per cent re-
and q per cent just managed to hole
a picture of the progress low income
their own with no change. This is no
groups have a right to expect il
America. The number who had t.
cut into their savings was much create
than those who added to reserves, ant
most of those who reduced saving
were not compensated by owning per
manent Improvements autos, appli
ances, homes-in return for the saving
they spent. They have lost ground il
the past year.
Unions Lead Effort to
Maintain Living Standards
Many unions have been able to kee'
their members incomes a little ahea'
Of the drastic price rises which hav
brought such loss to low income groups
Therefore, even in these difficult post
war years, many union families hav
made real gains in living standard:
Unquestionably union members ar
numerous among those who increase
their savings in 1947. Unions have a
usual led the way for others. Pay in
creases in union plants have been fol
lowed by increases in other plants $
that millions of families have had som
help in meeting their high living cost
The whole picture, however. is nc
bright. The Federal Reserve Boar
states that: 1.-THE general financi;
status of consumers showed the Fir!
signs Of weakening in l947," and point
out that fewer families held saving
at the end Of the year and there, wa
more indebtedness. The prospect
says the board, that at least one-fourt
of all families will make further hea,
cuts in their savings. For consumer
as a whole there was a rise Of moi
than 10 per cent in loN in total none
income"-but living costs rose mo-
than IA per cent. About so per cent
all families reported higher income
but many felt that wen so they we
worse off because purices had riss
nor than income. Other families BIZ
definitely lost out, for 80 per cent h;
no increase in income and 20 per ce
had lower incomes in 19H than 194
The majority of American families h;
their living standards reduced in 1874
A Practical Answer
Today's creeping initiation cannot
stopped by any n group acting alor
1t would be useless for workers
forego the wage increases which 81
tain their living standards while el
ployers continue to raise prices. Y
there are alternatives to governme
controls over wages and prices. VI
untary action could be taken if a W
were provided for responsible repr
sentatives of management, labor, fan
ers, bankers and other economic grou
to meet and study the problems Of Q
economy jointly. They could agree
corrective measures and undertake
put them into effect through their
spective organizations. Then at int
walls reports on results could be ma
to the joint group conference, viii
-.~.tS ~>~S>-v ~seeAct >tpa0dc and mr.