Evening star. [volume] (Washington, D.C.) 1854-1972, 1962-04-01
More investments Needed

S42 per month in new savings for
each worker.
More Investments Needed
A second approach would be to
spread the payroll arbitrarily,
placing 100 at work for every 100
now employed. This would mean
an average pay cut of 1925 per
week for every worker, or 1882
per month.
These are the two economic
avenues to full employment. By
either route, labor must carry part
of the load, either in a better
rate Of savings and investment,
or in lower pay for the spread
the-jobs principle.
One route comes to $42 per
month in new investment per
worker; the other to $37.82 per
month in spread-work wage cuts.
The point is this: We are within
$42 per month per worker of a
clear, wholesome and robust ma
tional solution.
That is less than $3.50 per day
per person now employed.
If labor makes contribution
Of some sort. the problem might
be solved this year.
Some slight advantage might be
gained by diSplacing employed
women with bread-winner men,
but this area of unemployment
is relatively slight in every COM
munity.
Woees Too High
Mariner S. Eccles, former
chairman of the Federal Reserve
System and now a member OF
the National Commission on
Money and Credit. says that cur
rent wage policies tend to defeat
our national economic programs
for solid growth and stability.
Mr.. Eccles blames "the monop-
olistic power exercised by orga-
nized labor"
1T is unrealistic to gloss over
the effects of its actions on prices,
imports, exports, employment, rate
of growth and deficiency in our
international balance Of pay
ments.
Wages and fringe benefits of
union labor in this country are
from two to five times that of
other industrial countries. Thus,
organized labor not only draws
from the economy benefits in ex-
cess of increased productivity. but
undermines our ability to COM
pete in world as well as domestic
markets. Until the Government
recognizes the seriousness Of this
situation and passes legislation
which adequately deals with it.
as it has with business, there is,
in my opinion, not much chance
of meeting the national economic
goals which it seeks"
Since the end of the war in
1945, the United States has ex-
perienced four complete cycles of
recession and recovery. In each
instance the downturn began
when unemployment still meas
ured better than 4 per cent Of the
labor force. What is wrong that
we cannot gain full employment
even at the very top of the boom
cycle? Equally challenging is the
fact that each business dip has
brought a new high peak Of un-
employment.
Unions Challenged
In the field of industrial auto
nation, American labor neve,
has faced the facts Of life.
Attenuation means only tina
management invests x dollars il
a machine to do a certain amour
of work formerly done by man
power at so much per hour.
If wages are very high, machin
cry is more and more profitable
Let us assume a manager buy
a machine for $4,000 to replac
one man earning 81 an hour. A
1000 hours a year this machin
would produce the same as on
man. The interest and deprecia
ton on the machine is $1,000
year. The wages saved are $500
a year. This is a good investmer
for management.
= If we hike wages to So an hou
E the manager then can afford I
Y invest $4,000 for one machine
/ replace one man.
The higher wages go. the great
er the drive for automation-c
r chronological unemployment,
} the textbooks call it.
: This is the route we have bee
= travelling at ever increasir
e speed since 1916 higher ar
n higher wages -more and more al
donation; until today we ha'
: an estimated $4,000 a week new
y unemployed from this sour
in alone.