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The Militant, 13 July 1946

[Walter Creel]

Wages, Prices and Profits

From The Militant, Vol. X No. 28, 13 July 1946, p. 6.
Transcribed & marked up by Einde O’Callaghan for ETOL.


The employers of the United States are raising prices. As an important part of this process they have launched a propaganda attack against wages.

The capitalists hate set all their newspaper writers and radio commentators to harping on one theme. Over and over they try to tell us that the workers are to blame for making the corporations raise prices.

They put this one story into various forms. One form is that the present high cost of living has been caused by wage increases which the workers have won. Another form is the charge that the workers cause inflation by striking for higher wages. Still another form is that the workers cannot win real gains by getting higher wages, because the bosses will just raise prices and take the money back. So, even with more money, the workers cannot gain in their real wages, which are measured by the goods they can buy with their money.

They end by advising that the workers will really be better off with low wages, because low wages will keep prices down. They say low wages will keep inflation away.

Under cover of all this talk the bosses are busy raising prices, whether they have raised wages or not. And all of them began by raising prices before they had to pay any wage raises. Then when strikes come they tell the public, “If the workers win you’ll have to pay even higher prices.”

The labor movement has to find the best tactics to meet these moves by the employers. For that purpose we need to look into the economic facts about wages and prices. That is what this series will cover.

The Workers Face Special Problems

Besides the usual wage-price situation, the workers today face special problems coming from the fact that the government has inflated the nation’s money. Currency and credit inflation has taken place already. This inflation isn’t caused by workers’ wages. It is the act of a government, when it creates artificial money and pumps it into the country’s supply. The United States government carried out a tremendous inflation during the war, creating over a hundred billions in artificial dollars, mostly in the form of bank credits. This huge supply of false purchasing power was used to pay war profits to the corporations and great investment banks of the United States.

Up to now the inflation has only begun to produce its effects on prices. The money inflation that they have already accomplished will push prices much higher than anything we have felt so far. So the workers are in for a long struggle with rising prices, not just a short campaign. This also means there is nothing to their talk about a merely temporary rise in prices, followed by a fall to the old level. Inflated money is cheapened money, and it buys less. After inflation the money-price of goods goes up to a new level and stays up. This price problem will stay with us, and get much worse.

That’s one reason why the bosses are in a hurry to hide the fact that the government inflated money, and that the bosses cashed in on it. They are desperate to unload the blame onto the labor movement, before the real pinch begins.

However, it would be a mistake to look at this special feature of money inflation as the whole picture. We need to look first at the basic laws of wages and prices, and then take up inflation as a special part. This method is necessary anyway, because inflation grows out of these basic laws.

In the past, unions could fight for wages and let prices take care of themselves. But today, when conditions allow the bosses to raise prices, they are using the threat of price increases as a club to beat down wages. When a union demands a raise the employer goes to the public with the claim that he will be forced to raise prices. He tries to link up wages and prices, even though he has plenty of room to raise wages without raising his prices. Today, in defending their wage demands, unions have to meet this price issue.

In the General Motors’ strike the workers met the issue by demanding that the corporation “Open the Books.” Let the public see if the company was telling the truth about needing higher prices, or whether perhaps it was just hungry for some super-profits. But the corporation couldn’t stand the truth. The slogan “Open the Books,” threw it on the defensive, and it had to run away from its own issue.

The auto workers’ tactics and victory put the whole labor movement in a stronger position on the wage-price issue. It was a sharp set-back to the whole price-raising campaign. The present newspaper and radio drive of the employers is in large part an attempt to win back the initiative which the workers seized by the slogan, “Open the Books.”

On this matter the facts are on the side of the workers, and winning tactics come from the facts. In this series we will examine the truth about wages and prices.

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