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The New International, October 1946


Notes of the Month

Wage-Price Spiral and the Mood of the Workers


From New International, Vol. XII No. 8, October 1946, pp. 227–228.
Transcribed & marked up by Einde O’Callaghan for ETOL.


Last month saw the round of post-war strikes that have successively tied up steel, auto, telephone, telegraph, electrical goods, packing houses, railroads and mines hit the maritime industry in the greatest strike of its history. The solidarity of AFL and CIO seamen against the government’s Wage Stabilization Board – a solidarity maintained despite the petty, narrow maneuvers of the leaders – brought a victory in the form of the complete capitulation of the government to the wage demands of the unions.

However, the maritime strike, together with such important local strikes as that of the New York truck drivers, was the last belated action in the labor offensive unleashed by the auto workers nearly a year ago, rather than the herald of a new strike wave. If anything it indicated that the first round of post-war strikes was drawing to a close. Indicative of this was the fact that AFL unions were now prominently identified with strikes and strike threats. Of symptomatic importance in this respect was the strike of eight hundred white-collar employees in the Gary steel mills. The strike wave is now reaching back into the ranks of the less progressive unions and among the unorganized.

On the industrial front as a whole, however, comparative quiet reigned-July and August saw fewer man hours lost due to strikes than any two months since the war ended. There was great discontent in the auto plants, the steel mills, the coal mines, the packing houses and other basic industries that had undergone strikes to secure wage increases from thirteen cents to twenty cents an hour. However, the discontent did not crystallize into strike talk. If anything a widespread apathy toward the trade unions was evident in many of the great industrial centers, including such hot-beds as Detroit. Attendance at union meetings lagged and rank-and-file interest in the union committees on the job fell off. Workers in industries like the key auto industry were plainly going through a post-strike lull.

The apathy was occasioned by the sense of dismay and frustration that has seeped into the workers’ consciousness as a result of the gradual realization that the wage gains of the strikes have been wiped out by rising prices. General Motors strikers, the spearhead of the whole strike wave, look back upon their bitter three-month hold-out which concluded with an inadequate eighteen-and-a-half cent raise. They show no eagerness to repeat that experience.

The prevalent sentiment expresses itself in remarks that “we can lick the corporation but we can’t lick the grocer and butcher.” The “grocer and butcher,” does not, of course, refer to the retailer down the street but to the whole price-gouging economy. (Among the “grocers and butchers” is the Ford Motor Company which has just been granted its third price increase by the OPA, though its 1947 model has yet to appear for sale.)

This sense of futility about strikes has been seized upon by the top leadership of the CIO as a pretext to preach, in the words of Philip Murray, “the need for a new no-strike pledge.” This is the same Murray who settled the steel strike on the basis of a five dollar increase per ton of steel. Such a pledge is the only solution which the baffled conservative leadership can think of. It constitutes a complete surrender to the w:age theory of the National Manufacturers Association-increase production first, and wage increases will follow. However, the failure of the workers to strike, whether through the spread of defeatism and apathy or through the active policy of a “no-strike pledge’” will not diminish the present gap between wages and prices nor even stop the gap from increasing. The months of July and August saw the swiftest price advances in any two-month period since 1940. Given this trend for the next three or four months the squeeze upon the standard of living of the workers will force them into some kind of action. A second round of strikes beginning next winter or spring is unavoidable.

It is extremely unlikely, however, that the next wave of strikes will merely repeat the cycle. The hard lessons of experience have drilled into the minds of the workers the significance of a fatal link between wages and prices. The present reluctance to strike for a mere wage raise is evidence of this. It is, therefore, inevitable that the need to strike will immediately bring to the fore the question, “But what about prices?” We can predict with certainty that prices will sit at the negotiating table alongside of wages. The essence of the GM strike program, “Wage increases without price rises,” will in one form or another constitute the basis of the workers’ demands in the strikes. Once prices are brought into the collective bargaining session along with wages, the question of profits becomes inevitable. Profits in turn resurrects the old argument of General Motors about “ability to pay” and the unions must in response raise the demand to “open the books.” The GM program is, therefore, revealed as the only way out of the price-wage spiral for labor. It is the answer which is indicated by the factors inherent in the objective situation. rather than a “clever scheme” invented by Walter Reuther on the basis of his socialist background as some naive people believed at the time of the GM strike. If Reuther’s socialist background is involved, it is only to the extent that his grasp of economics and his foresight is greater than that of the run-of-the-mill union leaders and so permitted him to realize a year ago what they are only beginning to understand now that the old Gompers’ philosophy of “A fair day’s wage for a fair day’s work” and “Leave prices and profits to the employer” is deader than a dodo.

We conclude, therefore, that a new strike wave is unavoidable. The addition of price-consciousness to the traditional wage-consciousness of American labor will forge a program far in advance of the mere “more money” demands of the past. We confidently look forward to the entire CIO taking up where the GM strikers left off and making as the rallying cry of labor the demand, “Wage increases without price rises.”

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