BUICKS, BOOMS, AND BUSTS
Fountain, Clayton W.
Labor's Case For Wage Increases Buicks, Booms, And Busts By CLAYTON W. FOUNTAIN LONG, shiny new Buicks have been on display in the General Motors Building for several days now in Detroit. Crowds...
...These are the facts about the wage problem, over which so much badly informed name-calling and woe-saying is erupting across the country...
...total current liabilities from 30 to 52.8 billions—resulting in an increase of net working capital from 24.6 billions to 45.1 billions...
...They have a check coming from Uncle Sam for another $2,840,000,-000...
...Wilson a total of $1,367,570, while eight other GM workers, all named Wilson, were paid a total of only $51,514 for the three years of work...
...The arithmetic involved is elemental: 30 per cent of $40 equals $12 aird $40 plus $12 equals $52...
...The War Labor Board reported, further, that in 1944 only 14,000—1 out of 2,000—wage earners in private non-agricultural employment got $2.10 an hour or more straight time pay...
...There is something symbolic about the exhibition of these beautiful Buicks on the lobby floor of the GM Building while the Corporation big shots upstairs are telling the UAW-CIO spokesmen for GM workers that their wage demands are "unreasonable...
...During this period, GM increased wages 37 per cent, but prices of GM products went up only 16 per cent, while profits zoomed 61 per cent...
...They are the facts upon which former War Labor Board Chairman Davis and Secretary of the Treasury Vinson have based their opinions that a 50 per cent increase in the standard of living is both desirable and possible in America...
...At the same time, the GM Top Negotiating Committee of the UAW-CIO is meeting with General Motors executives on one of the upper floors of the same building in preliminary skirmishes over the Union's demand for a 30 per cent wage increase...
...30,1944, according to a report of the Securities and Exchange Commission, all U. S. corporations (excluding banks and insurance companies) had increased their holdings of cash and Government securities from 13.1 billions in 1939 to 43 billions...
...MILLIONS of middle-class citizens are being duped by the bad economic philosophy with which some of the industrialists—aided by their political and journalistic partisans—are seeking to prove that wage increases will plunge the nation into inflation and doom...
...If the public fails to get hep to these facts, we will not get our Buicks, we will not have a boom—but will fall flat on our economic faces m a tremendous bust...
...This unbelievable harvest of wealth reaped out of war production was reflected in the 56 billions of profits (after taxes) acquired by profitable corporations during the war...
...They have $47,000,000,000 in cash and Government securities swelling their corporate coffers...
...Under this arrangement, the market for Buicks is certainly not going to expand very fast—unless Mr...
...For a worker who earned $1 per hour for a 48 hour week, the loss of the 6th day of work at overtime rates cuts his take-home pay from $52 per week to $40 per week—a slash of 23 per cent...
...This increase in both wages and profits—accompanied by only a slight increase in prices—was made possible by a 21 per cent increase in production and a 12 per cent increase in output per man hour...
...For, in spite of the propaganda, the corny economics, the catcalls, and*"the confusion evoked by the demand for a 30 per cent wage increase, these facts show that industry is financially able to pay much higher wage3 :—and stilf make reasonable profits out of increased production and reduction of unit costs of production, without increasing prices...
...In the case of General Motors—-which wants to sell its Buicks to others besides its stockholders, we hope—gross profits for 1944 were 78 per cent more than the yearly average profits for 1936 through 1939...
...But the facts are that the manufacturing businesses are better heeled today than ever before in their history...
...GM stockholders gleaned more than 900 million dollars in dividends during the war...
...An official report of the Bureau of Labor Statistics shows that workers' living costs have jumped 31 per cent since 1939 and food costs 50 per cent...
...No one denies that the new Buicks are physical proof of the capacity of America's mass production system to produce bountiful quantities of automobiles and other manufactured essentials of modern life...
...NOW GM announces that it intends to shove postwar production up 50 per cent above the 1941 level...
...But they are well aware that they will fail unless they succeed in getting the majority of the non-union public to comprehend the fundamental economic facts surrounding the wage problem...
...Charles E. Wilson is made to see the wisdom of divvying up his take with the other Wilsons who are supposed to be the customers in our mass production system...
...Everybody is eager to see the gorgeous gadgets pour in a torrent from the assembly lines...
...This wage increase demand is no ordinary attempt by unions to grab for their members a bigger share of the national pie...
...This wage demand is, moreover, based upon the determination of the unions to fight for increased living standards for all Americans employed in useful and fruitful social functions...
...But when you raise the question of providing the purchasing power needed by consumers to buy the Buicks, Fords, Frigidaires, and a thousand other things people want—that is strictly a Buick of another color...
...lowest paying industry (workshirts), $21.57 per week...
...The success of the mass production unions in winning this demand—and in preventing a consequent increase in prices—will determine whether or not millions of Americans will have the wherewithal to buy those new Buicks...
...In addition, a kindly Congress has chipped in to set up a $62,000,000,000 insurance fund to underwrite their postwar profits...
...Incidentally, we have heard no squawks from business against this kind of Government intervention...
...An increase in production of this magnitude would more than cover the 30 per cent wage increase, and still guarantee substantial profits, without increasing prices...
...highest paying industry (locomotives), $65.65 per week...
...In the years of 1941, 1942 and 1943, General Motors paid Mr...
...Since then the cancellation of war contracts and the subsequent reduction of overtime operations has slashed the average worker's take-home pay some 12 hours or more of earnings per week...
...Under the late but not lamented Little Steel Formula, wage rates in our basic industries lagged considerably behind the cost of living...
...It is far more than that...
...According to Government statistics, average wartime wages were nothing to write home about, even at the peak of production...
...For every such high paid worker, 1,200 workers got less than 85 cents an hour, and 800 got less than 65 cents an hour...
...ONE of the first misconceptions that must be cleared up is the false belief that the 30 per cent wage increase is to be added to the allegedly fabulous wages earned by industrial workers during the war...
...BUT now Mr...
...This fact was admitted by the National War Labor Board...
...Under these conditions, about which most journalists neglect to advise the non-union public, the demand for a 30 per cent wage increase—even if we get all of it—will not bring industrial earnings back up to their wartime peak...
...These facts explode the absurd notion that industrial workers are rolling in riches and are reaching out greedily to get richer by 30 per cent...
...Exclusive of these fringe factors and devices, however, occupational wage rates failed to keep pace with living costs...
...In terms of basic wage rates, therefore, the industrial workers came to the end of the war with their wages trailing existent price levels...
...There might be some justification for industry's resistance to demands for wage increases if the corporations were strapped or even badly bent...
...Outside of labor circles, the relationship of the wage problem to the public passion for possession of manufactured goods is either ignored or badly confused by the corny economics dished out in the majority of the daily papers...
...Stripped of the corn, confusion, and curses it has aroused, however, the demand for a 30 per cent wage increase, spearheaded by the UAW-CIO here in Detroit, is basic to the future of the American economy...
...On the other hand, the corporations from whom the workers are demanding the 30 per cent wage increase have waxed fat on their wartime earnings...
...Organized labor realizes well that the incomes of farmers, small businessmen, white collar workers, and professionals must also be lifted if we are to create a volume of purchasing power sufficient to keep the wheels of industry turning at an ever faster tempo...
...No one denies that the American public is possessed of a pent-up hunger to acquire ownership of one of the snazzy new models...
...General Motors' own experience from 1935 to 1941 proved this point...
...The lesson of 1929 seems to have been mentally shoved aside, like a bad dream, by most of the non-capitalist folks who are currently damning the unions for demanding wage increases...
...The unions believe this can be done, in cooperation with other groups, and they are willing to try to do it...
...Some workers got more money through overtime work, increased shift premium payments, incentive earnings, merit increases, promotions and shifts of labor from low wage to high wage areas...
...They are the facts that the American people are going to have to get into their heads and learn to use as the basis of a democratic program for abundance—if they are to achieve their dream of owning one of those shiny new Buicks now on display in the GM Building in Detroit...
...And the enormous economic benefits that are certain to flow from such a boost in production could be channeled uniformly into the hands of the consuming public-enabling consumers to buy their cherished Buicks...
...total current assets from 54.6 to 97.9 billions...
...Crowds of people jostle about the elegant 1946 models, fingering their gadgets wistfully and dreaming, no doubt, of the glorious sensation of owning one of these magnificent vehicles...
...Charles E. Wilson, President of General Motors, publicly brands the wage demands of his workers as "unreasonable...
...It is a sincere attempt to work out an economic pattern upon which to base an expanding postwar economy—an economy with which we can set the pace for world prosperity and peace—without risking the totalitarian dangers of excessive government intervention...
...To bring this worker's weekly wage back up to $52, his basic wage rate must be increased by 30 per cent...
...They were as follows: All manufacturing industries, $47.52 per week...
...As of Sept...
Vol. 9 • October 1945 • No. 43
