Evening star., 1951-05-14
Wage Sfabilization
NOT Absolute Freeze,
Board Chairman Says
By Froneis P. DouqIos

By Froncis P. Douglas
DR.. George w. Taylor, chair
imam Of the, new Wage Stabiliza-
ltion Board, told Congress today
THAT "stabilization does not mean
Ian absolute freeze
Effective stabilization," he tes-
titled before the House Banking
Committee, "brings the general
wage and salary level under con-
trol, but allows sufficient fexibil-
lity to permit the necessary ad-
justments. which a dynamic and
growing economy requires.
The House committee, in addi-
ton to hearing DR.. Taylor, heard
Edwin T. Gibson. acting defense
production administrator, and
Jess Larson, general services ad-
ministrator. The committee is
considering proposed amendments
to the Defense Production Act,
which must be renewed since it
expires June 80.
Basic Policy Studied.
DR.. Taylor said the Wage Sta
bilization Board Is beginning this
week to tackle basic policy ques-
tions. He explained that one of
the problems is to determine
whether. when the ceiling of 10
per cent above the wage levels of
January, 1850. is exceeded. this
is an exception or Is contrary to
basic policy.
He told the committee that the
10 per cent catch up" formula
was but the first step.
1--WE now have to take additional
steps to round out a full wage
lstabilization program" he said.
There are, for example, nearly
$50 cases where inequities are al
legged"
The board chairman said it is
clear that the present board lacks
the authority such as was exer-
Icised by the World War II War
Labor Board.
To Expand Boards Staff.
DR.. Taylor said the board now
has a staff Of about 200 and ex-
poets to have about 1000 when it
develops an effective wage sta
lbilization program.
He said he does not know
whether many disputes threaten
ling defense production will be re-
Iferred to the board. .....
Meanwhile, Washington was
watching to see what the board
will do about the pressures for
wage increases which would carry
wages in some industries through
the ceiling Of a level 10 per cent
above the January. 1850, rates.
Some looked on this as de-
mand by labor for a sixth round
OF wage boosts since the end of
World War II. Labor, on the
other hand, maintains that the
concept of rounds" is inappli-
cable now that wage increases are
negotiated at different times and
In different amounts.
Some Got Increase in 1850,
Some unions obtained increases
early in 1850. It is maintained
now that these increases were to
meet conditions that had occurred
by them and that the wages do
not compensate for the general
price rise since that time.
Other unions which have not
won wage increases since the fall
Iof 1949 argue that the 10 per cent
level adopted by the former Wage
IStabilization Board should. not
apply to them and that they
should be permitted to exceed the
10 per cent limit on the hardship
case basis. The Capital Transit
Co. union demands are an ex-
ample.
Another pressure on the wage
ceilings" comes from the pro-
vision in some agreements to COM
lpensate for the annual improve
Iment factor" This amounts to
about 2 per cent in the automobile
industry and 4 to S per cent in
some other industries. It is in
tended to compensate for i'm
proved productivity.
Labor argues that it has been
granted in so many industries it
would be inequitable to withhold
1T from others. It is also main
tanned that since this factor is
designed to compensate for great
Ter productivity 1t would not
throw the wage-price relationship
|out Of balance because wage costs
would be unchanged.
Equal Representation Now.
The board now has equal repre-
sentation Of industry. labor and
the public. The composition of
the board was recommended by
labor and indorsed by the public
members. but with the industry
segment in opposition. The board
was given authority to recommend
settlement terms in labor disputes
IN defense industry although in
dustry members wanted It's iuris-
diction confined to fixing limits
ifor wage increases under the wage
and price stabilization program.
Senator Taft said that under
the present tripartite system.
management and labor groups
could combine to scuttle the whole
Istabilization program. He said
Congress may want to consider