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Susan Green

Cost of Living Up 43.5%
Wages Are Frozen at 15%

(7 February 1944)

From Labor Action, Vol. 8 No. 6, 7 February 1944, pp. 1 & 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

If another nail was needed to make secure the lid on the coffin of the Little Steel wage freeze, that nail has now been hammered in good and proper.

It will be remembered that even the figures of the Bureau of Labor Statistics, which organized labor claimed to be far below the facts of the cost of living, admitted that costs have risen 23.4 per cent above January 1, 1941 – which is already 8.4 per cent above the 15 per cent grudgingly permitted by the Little Steel formula.

Now come R.J. Thomas of the CIO and Thomas Meaney of the AFL, the labor members of the President’s Cost of Living Committee, with their factual report.

They put the figure at 43.5 per cent above January 1941 – or nearly twice as much as the flukey index of the Bureau of Labor Statistics – and 28.5 per cent above the 15 per cent basis of the Little Steel formula.

That cadaver is definitely buried.

How Report Was Made

The report of Thomas and Meaney is by no means a slipshod affair. It is heavily documented, based on field surveys, on consultations with experts in government, business and organized labor, on interviews with hundreds of workers and housewives.

One of the field surveys covered 1,500 steel workers of the, CIO and the method used was so outstandingly fair that even the acting chief of the Bureau of Labor Statistics, in charge of its index, had to offer his praise.

*As a result of this painstaking work to arrive at the truth, Thomas and Meaney find that today it takes $143.50 to buy what in January 1941 it took only $100 to buy.

How many of you rich (?) war workers have received a wage increase of 43.5 per cent since January 1941?

However, the report makes it clear that this figure is only tentative. It was difficult to arrive at an accurate estimate of the rise in costs effected by such factors as quality deterioration and selling of low quality merchandise at the same price as higher quality. “It is apparent,” the report adds, “that our findings with regard to the overall increase in the cost of living will need to be adjusted upward when these data become finally available.”

That Little Steel formula is not only dead and buried – but rapidly decomposing.

The other members of the President’s Cost of Living Committee are William H. Davis, chairman of the War Labor Board, heading the committee; H. B. Horton, president of the Chicago Bridge & Iron Co., and, George K. Batt, vice-president of Dugan Brothers, both representing business on the President’s committee.

Naturally, not one of these three agrees with the figures presented by the labor members. They are pretty worried about what these figures will mean in terms of wage demands to catch up with that 43.5 per cent rise in costs.

So Mr. Davis hastened to comment that the report of Thomas and Meaney is “not in any sense the report of the committee.” And the business contingent pompously declared that the “committee is under the responsibility not to make a final report to the President and to the public until careful consideration has been given to all the relevant data.”

But even the New York Times, right in the midst of a long editorial “disproving” (the labor figures, admits that “It is undoubtedly true that the BLS index somewhat understates the rise in living costs.” THAT SLIGHT UNDERSTATEMENT AMOUNTS TO ALMOST 100 PER CENT.

Breaking down this slight understatement, the labor report gives the cost of food as going up 74.2 per cent as against 40.2 per cent in the BLS index; clothing 72.2 per cent as against only 33.7 per cent; rent 15 per cent, against a meager 3 per cent admitted by the BLS; household furnishings 62 per cent against 27.8 per cent.

Statisticians and Statistics

How come there is such a discrepancy? Very simple. When statisticians have a certain purpose in mind, they can do almost anything with statistics. REMEMBER THE PURPOSE IN THIS CASE WAS TO MAKE IT APPEAR THAT THE 15 PER CENT FREEZE OF THE LITTLE STEEL FORMULA WAS FAIR.

So, for instance, the BLS index does not take into account the disappearance of cheaper goods, compelling people to buy the dearer commodities. This even Price Administrator Bowles admits. Furthermore, the BLS food index was the guide for keeping prices down on only those foods that are listed there. The labor report shows that many

categories of foods used just as extensively were left out of the index and went skyward.

These are only two of the numerous ways in which the BLS statisticians kept the cost of living “down.”

On the other hand, while the labor report remedies these convenient “oversights” of the BLS, it by no means takes into account every one of the items boosting living costs. For example, the effects of the black market, of changes in living conditions, of higher taxes, were not considered even by the labor report.

What conclusions are to be drawn?

Apparently, labor can only trust itself – even in the matter of ascertaining the facts and figures of a situation – or shall we say especially in such a situation which involves wages against profits?

Second, the Little Steel formula being six feet under, labor’s campaign to obtain wages commensurate with the real cost of living should assume real vigor.

Wage demands need to be upgraded not only to the existing cost of living, but should be escalated upward periodically in step with the cost of living.

And to put teeth into labor’s demands, the no-strike pledge has to be ditched, so that labor can step out in its full strength.

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