Evening star., 1950-08-31
ChrysIer Wage Raise
Seen as Significant
In Many Ways Here
Labor Unrest Is Viewed
With Concern as Fears
OF Inflution Increase
Bp David Laurence

other day voluntarily raised the
pay Of It's workers even though
1t was not provided for in the
union contract, and was not the
result of any request from the
auto workers union, there were
many persons who wondered just
what motivated the step.
Here in Washington, where
labor unrest is getting to be a
matter of more and more con-
cern, the Chrysler action was
viewed as significant in many
ways. The first impression was
that the company had taken the
step as a means of demonstrating
that it is continuing, as it did
many years before there were
unions in it's plants, to make wage
increases whenever conditions
warranted. There were some
critics here, however. who felt that
the move might stimulate an in
fiationary trend. ..-.-
The truth about the situation,
1t develops now, is that the simple
and fundamental provocations OF
competition between Chrysler and
General Motors brought about the
wage increase.
Out to Keep Differential.
NChrysler officials state that, due
to the recent General Motors five
year contract, the wages paid
came to eight cents per hour high
er than those of Chrysler. So, by
raising its workers wages 10 cents
an hour, the Chrysler Corp.
hopes to maintain a two-cent
differential in favor of its own
employees. The statement Is made
by Chrysler spokesmen that they
have always maintained a differ
ential In wages of about two cents
better than GIN. The reason
given is the desire to get premium
labor.
Curiously enough, an employer
nowadays cannot raise wages Of
his own initiative. He must call
In the union representatives and
get their consent, or else it's an
unfair labor practice" under the
law. Sometimes the union OFF,
cials use the occasion to ask for
more than is being offered and
negotiations ensue which permit
the union officials to claim credit
for the raise.
In the Chrysler instance, the
company officials set forth their
plan to the union for a raise OF
10 cents an hour and asked i'm
mediate acceptance or rejection
stating their intention to make
public the offer In either event
The union officials agreed and the
announcement of acceptance was
issued.
Meanwhile a small strike has
developed at the Ford Motor Co..
some of whose employees feel they
should be given an increase. too,
even though the contract doesn't
call for it at this time. The strike
is called unauthorized" by the
union but sympathy Is expressed
publicly just the same by the
union officers for the point of view
of the understanding that
doesn't augur we'll for the sanctity
of contracts with mo strike"
pledges in them.
Contract StipuIations.
The GMC, in it's five-year con-
tract signed before the Korean
war, stipulates progressive in
creases in wages and an upward
rise based on a cost-of-living in
dex of the Federal Government.
It remains yet to be seen whether
workers will accept a serious
downturn in the index as a basis
some day for a wage cut.
What turks in the background
Of the entire situation at present
is the possibility that a wave of
wage increases will be set off due
to competition for manpower, and
that this will contribute to the
infiationary spiral.
The most serious prospect Of an
imitation panic may come out Of
the proposed passage Of an ex-
cess profits tax law. The big COM
panies with large profits will be
tempted to increase wages and
other expenses, especially when
the Government applies an IS per
cent maximum rate for excess
profits purposes. Prices and wages
would have skyrocketed If wage
and price control had not been
instituted during the last war.
Those who are proposing ex-
ceSs-profits taxes at once seem to
be pressing for more and more in
fiation on the one side and no
immediate restraint on prices or
wages on the other. The three
things are intertwined and inter-
dependent. The mere announce
ment this week that an excess
profits tax bill, when passed next
January, will be made retroactive
through half Of the year 1850 will
produce a dangerous price situa-
ton. The President had an
nounced that no bill was desired
till next year but radical Demo-
Gratis are pressing for a promise
to have the law made to apply
back through the second-half Of
1850. Apart from the difficulty
of administering such a law. the
stimulus to imitation is obvious.
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