Max Shachtman

Workers, Here Is How to Get —

A Cost-Plus Wage!

(August 1943)

From Labor Action, Vol. 7 No. 34, 23 August 1943, p. 1 & 4.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.


How is the standard of living of the workers taken care of? What is done to meet the rising cost of living that is gnawing away steadily at the standards of American labor?

The capitalists have a carefully-worked-out SYSTEM that takes care of their rising costs, no matter how high they go. That is, as we said before, the COST-PLUS system. They don’t have to worry, during peacetime or wartime, about how high the cost of land goes, how high the cost of raw materials goes, how high the cost of machinery and maintenance goes. These costs are covered in their contracts with the government right now. They produce on a COST-PLUS basis – they get whatever it costs them, PLUS a profit.

That is why, as we have pointed out, the capitalists, especially the big, monbpolistic corporations, cannot lose.

What They Say to Labor

To the workers, however, the corporations say:

“If your costs (that is, the cost of living) go up, that’s just too bad. These are hard times. We are all in the same boat. Tighten your belt. Sacrifice for your country. After the war, we will have our huge profits and our carefully-accumulated reserve funds. You will have to be content with a dole, if you can get it. That’s the system of free enterprise.”

To the workers, the government says:

“If your costs go up, that’s too bad. There isn’t much we can do for you. These are hard times. Tighten your belt. Sacrifice for your country. We are too busy covering the rising costs of the corporations and guaranteeing their profits on the wonderful system of COST-PLUS, What we can do is to promise to roll back prices. Our promises thus far haven’t been worth the paper they were written on. But have faith in God and Roosevelt and the system of free enterprise.”

To the workers, the labor leaders say:

“If your costs go up, that’s too bad. There isn’t much we can do for you except to run around from one flunkey in Washington to another, begging for a few little scraps for labor. Next month, maybe, we will see the President, or the Vice-President, or a congressman, or his second assistant secretary, and we will try to put in a good word for you. Meanwhile, have patience and, above all, don’t try to get back your most powerful weapon of self-defense, the right to strike. Your best bet is to lay on your back like a dead dog, get up to vote for Roosevelt again next year, and pray that somehow all will turn out well in the end.”

To the workers, the Communist Party leaders say:

“If your costs go up, we have a magnificent solution to your problem. Work harder! Work longer hours! Speed up till you fall off your feet, and your arms and brains are numb with fatigue! If your present wages do not meet the rising cost of living, you can increase your income by ‘incentive pay,’ that is, by the good old sweat-shop systen, the speed-up system, by doing two jobs where you used to do one. Tighten your belt. Sacrifice for your country. All-out for war and victory. And, above everything else, all-out to assure the power and the victory of the Russian Stalinist bureaucracy, which is our real master.”

These are the answers the capitalists, their government, the official labor leaders and the Stalinist bureaucrats give to the burning problem of the rising cost of living.

All of them boil down to one thing: The workers must carry an ever-heavier burden so that the capitalists may carry off ever-heavier profits. They give an anti-labor answer. What is a labor answer?

Labor must work out its own bold plan for a “COST-PLUS WAGE” arid fight with all its organized power and determination to get it.

What is a COST-PLUS’ WAGE?

It is the simplest thing, imaginable.

We have seen what the COST-PLUS SYSTEM is for the capitalists. If their costs go up, they are covered in the contract, PLUS their profit. How big a profit? As big as their organized strength enables them to get. If they are small and weak capitalists, they must be content for the time being with a “small” profit. If they are big and powerful capitalists, they are content only with the biggest possible profit. But always AFTER their COSTS have been covered.

The Cost-Plus Wage

A COST-PLUS WAGE is simply the application of this system to the workers!

How? By contracts which provide that wherever and whenever the cost of living goes up, wages are automatically increased to cover the increase, PLUS an additional sum which allows for minimum comforts above a mere subsistence level. We will see later just how high the PLUS can and should be for labor.

What measuring stick can be used to determine the cost of living and its rise? “Everybody” gives different figures on the cost of living and the extent to which it has risen. Which figures would be taken? That sounds like an insurmountable difficulty, an unanswerable objection. But it is nothing of the kind.

The capitalists find no serious difficulty in establishing what THEIR costs are, and the extent to which they have risen, whether the rise is real or only faked up in their swindle books. They argue it out with their “employer,” the government, or with its “adjusters,” and they finally come to terms which are more or less satisfactory. They must be more or less satisfactory, because their PLUS, that is, their profits, are the highest in history.

Why can’t the workers and their unions do the same thing in their own case? The rank and file worker has his own “statistics” on the cost of living, which he feels directly every single day from what happens to his wages when food and clothing have to be bought and the rent paid. The CIO and the AFL have their statistics on the cost of living and its steady rise. The Department of Labor has its statistics on the same subject. So have the National Association of Manufacturers and the Chamber of Commerce.

How to Measure It

Which set of figures would be used as the basis for a COST-PLUS WAGE contract? The one that the workers know to be closest to the truth!

Would the employers readily accept the figures, the basis, proposed by labor? Of course not! They would hem and haw, dodge and twist. They would try to propose the figures most favorable to them, that is, the figures that are furthest from the truth.

Then which would be adopted? The best, that is, the truest, figures that labor’s organized strength could impose at any given time, in any given wage or contract negotiations.

There is really nothing very new or exceptionally difficult about this. It is what the workers have to do every time they sit down with employers to negotiate a new wage contract. What is new is simply the establishment of a new basic principle for such contracts, the COST-PLUS WAGE to protect labor’s standard of living.

Would a COST-PLUS WAGE mean that every worker, in every industry, and in every part of the country, would get exactly the same wage?

No, not quite.

In the first place, the cost of living differs from place to place.

In the second place, labor’s present living standards differ from place to place and industry to industry.

In the third place, labor’s skill differs from trade to trade, or craft to craft. And all these facts have to be taken into practical consideration.

Labor’s ideal should be based upon the principle that everyone contributes what he can, in physical or mental labor, and gets what he needs. But that is an ideal. It can be realized only in a fully socialist society, where real equality and freedom exist. It cannot be realized in our present-day corrupt capitalist society.

But what we can fight for now is a COST-PLUS wage. The “COST” will be based upon the EXISTING standard of living of any GIVEN group of workers (from highly skilled railroad workers or tool and die makers, down to unskilled workers and day laborers). It wilj be based upon the standards prevailing in any GIVEN locality, which is automatically adjustable to the rise in the cost of living. It will provide for a “PLUS” for the more highly-skilled, or for the more poorly-paid based upon what they are STRONG ENOUGH to enforce in the contract.

But in EVERY case, it would be based upon the principle of a MINIMUM that corresponds to an acceptable figure of the cost of living, automatically adjustable with every rise in that cost, PLUS an extra margin of income, corresponding to what the capitalist demands as his profit.

Improving the Lot of the Worker

Why should there be a “PLUS”? Isn’t a cost-of-living wage good enough?

No. A mere cost-of-living wage means to tie labor down to its present unsatisfactory economic conditions, no matter what happens. It means that labor would accept the principle of never REALLY improving its position. It means that labor would be forever tied to its present status, just like cattle.

Labor must constantly seek to raise itself to a higher position in society, until it reaches the highest, where it properly belongs. If labor in the past had been content to continue working at the prevailing standard of living, it would now be in the state of undernourished and overworked slaves of centuries ago.

How “high” should this “PLUS” be?

As high as the ORGANIZED STRENGTH of labor makes possible in each given case!

Where the union is weak, where the odds against it are heavy, its bargaining power will be less and its “PLUS” smaller.

Where the union is strong, where the workers are determined, where the situation is favorable, the workers can force the employers to grant a higher “PLUS.”

Everything depends upon the independent, organized, fighting strength of labor.

“Where is the money to come from for a COST-PLUS WAGE? How can ‘we’ afford it? How is it to be obtained, especially when the country is at war?”

What Big Business Will Say

These questions will be asked by all reactionaries. They are easy to answer. CUT DEEPER AND DEEPER SLICES OUT OF THE BLOOD-PROFITS OF THE CORPORATIONS!!

The capitalist press seeks to exploit the sufferings and sacrifices of our soldiers – that is, of the workers and farmers in uniform – in order to batter down labor and the labor movement. The press cries: There is no time-and-a-half in the foxholes! There are no strikes in the foxholes!

Maybe. But there are no billion-dollar profits for the men in the foxholes, either!

The big corporations, the monopolists, the bankers, are coining unheard-of profits, running into the tens and hundreds of millions of dollars, in the war, and as a result of the war. These are blood profits! Why should it be taken for granted that these barons of industry and finance should be guaranteed such fabulous profits out of the blood and suffering of the people? What can possibly be wrong with cutting these blood profits to the bone?

When the soldier “works” for the government; he gets fifty dollars a month. When the corporations “work” for the government, they demand, first of all, a guarantee of COST – PLUS billions in profits!

What possible objection can be raised to the adoption of the principle of COST-PLUS WAGES?

Will the capitalist say that it is wrong, immoral, unpatriotic for workers to demand a COST-PLUS WAGE as a condition for their working in the country’s industries? How can he say that with a straight face? Will HE lift a finger to keep industry going without being guaranteed his COST-PLUS?

Will the government say that workers should not have a COST-PLUS WAGE, that the country cannot afford it, and so on and so forth?

How is it that the “country” can afford to provide the capitalists with a COST-PLUS SYSTEM, and not the workers? How is it that the government guarantees the capitalists their COST-PLUS, and not the workers?

Is it because it is fundamentally a capitalist government, which takes care of capitalists first, last and always? If that is so (and it certainly is!) then labor must organize to get a workers’ government, a government of its own, which will take care of labor’s interests first, last and always!

Will the capitalist press dare to say that COST-PLUS for the capitalists is good, necessary, just and equitable, whereas COST-PLUS for the workers is bad, unnecessary, selfish and criminal? Let it say that, and reveal itself for the capitalist mouthpiece and tool that it is!

Will the labor leaders, including the Communist Party bureaucrats, say that a COST-PLUS WAGE for the workers is improper, or untimely, or outrageous? Where would they get the brass to make such an argument? Do they challenge for a moment the “right” of the capitalists, the corporations, to operate on a COST-PLUS basis? Why shouldn’t labor, which produces everything, work on at least as favorable a principle as the capitalists, who produce nothing but coupon-clipping, unemployment, exploitation and war?

Labor needs and must have a COST-PLUS WAGE!

What Labor Must Do

Labor must establish, and enforce the principle, for the present, that its employer, be he a corporation or the government, automatically provides an, increase in wages in accordance with the increase in the cost of living – PLUS an extra margin of income to take care of the modest comforts that labor needs and wants and should have, at least for a beginning.

A COST-PLUS WAGE does not exclude regular or periodic wage increases. On the contrary, it provides for. them. It is the way to make it possible to meet the rising cost of living AND to increase the standard of living.

To get the COST-PLUS WAGE adopted, labor needs only one thing: its organized power and needs only two things: its organized power and freedom of action.

There are thirteen million organized labor unionists in this country. That is the biggest organized power in the country. Properly organized and properly directed, there is no other power in the country that can withstand it. Properly organized and properly directed, it can achieve any one of its legitimate demands. A COST-PLUS WAGE is such a legitimate demand.

Labor needs freedom of action. Right now, this giant has been shackled by the government and the corporations, assisted by groveling labor leaders, who imposed upon the trade unions the shameful “no-strike” pledge.

Capital has given no such pledge and does not need to give one. It is satisfied with labor’s pledge. The harder labor works, the higher go the profits of capital – and the lower goes the standard of living of labor.

Labor must regain its right to strike. That is an indispensable precondition to organizing the fight for a COST-PLUS WAGE.

That is a concrete answer, to the cost-of-living problem. It is a practical answer. It is a working class answer.

Let labor gird its mighty loins in the fight to win – A COST-PLUS WAGE!

Shachtman button
Max Shachtman
Marx button
Marxist Writers’

Last updated on 12 June 2015