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Albert Gates

Prices: Miners’ Wage Struggle Brings Issue to a Head!

Wage Raises, Labor Control Of Prices Are Vital Needs – Subsidy Plan a Subterfuge

(May 1943)

From Labor Action, Vol. 7 No. 20, 17 May 1943, pp. 1 & 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The Office of Price Administration has announced a partial and piece-meal roll-back of prices. This fact alone is proof, if any proof was needed, that prices of the essential goods needed by the mass of people were away out of line with their wage standards. What the OPA has said in effect is that the high cost of living has risen beyond all their expectations, and beyond the ability of the people to live on their present wage levels.

On May 4, the United Press announced that “OPA officials; admitted that prices, particularly in the food line, are practically, out of control.”

What does this statement mean? It means that the OPA did not exercise control of prices. There were no real price ceilings. The profiteers, in the form of the big farmers, connected with big business, the big commission and wholesale concerns, the large food processors, the immense chain outfits, were having a price holiday at the expense of the overwhelming majority of the people!

Where was the OPA? Sitting on the sidelines watching the prices go up, and occasionally giving them a lift. The head of the OPA, Prentiss Brown, announced some months ago, that it was impossible to really control the prices of the most essential commodities, and that prices for these necessities of life would rise steadily month after month! Why, then, the sudden decision to roll back prices?

The answer is to be found in the heroic struggle of the United Mine Workers of America. It was the fight of the miners which called the attention of the whole country to the scandalous situation which exists on the price front. For this, the entire labor movement owes a debt of gratitude to the UMW. The miners’ union declared the cost of living had mounted so high in their areas that, unless their wage demands were met, starvation would be rampant throughout the coal fields. It is a matter of life and death.

The demands of the miners met a cold response on the part of the coal operators, who are profiting out of the war effort. The operators were playing a clever game. They knew that if they refused to negotiate a new contract with the miners the case would have to go to the War Labor Board, which operates under the infamous Little Steal formula. The formula of the WLB was a guarantee that the miners would get nothing from that body. It meant that the miners would have to go back to work under the same old conditions – unless they were prepared to stand up to the coal operators, the Administration, which was ready to beat the miners down with troops, and the miserable boss press, and tell them all that the miners were ready to strike for their demands.

From the press, one received the impression that it was not the miners who were making this glorious fight for existence – but an individual named John L. Lewis. Would it have been different if the president of the UMW was named Smith, or Jones, or Brown? Nonsense! The miners would have been vilified and abused in the same way no matter who their leader was. But the coal diggers of America are old campaigners. They saw through the whole scheme because it was an old scheme of divide and conquer. They knew that if their demands are won, the only group who would suffer would be the coal operators and the food, clothing and rent profiteers. That is, they knew the only one who would be hit by their demands are those who get the profits from their toil.

When the miners struck they brought the whole situation to a head. They not only acted in their own behalf, but for the whole of the laboring people of this country. This was reflected in the tremendous wave of support which the miners received throughout the organized labor movement. Because the conditions in the coal mining areas of the country are to be found in all other industrial centers.

It was only when the miners showed that they intended to strike that the OPA made the gesture of sending investigators into the coal fields to discover to what extent prices were violated. But instead of sending investigators secretly to these areas, the OPA announced the step publicly, thus making it possible for price violators to lower their prices. What was the net result of the OPA investigation?

They found that prices in the coal areas were “not out of line.” Prices averaged, said the OPA, “about five per cent above the ceiling prices.” This is their conclusion from a sample testing.

But if prices are “riot out of line,” why does the OPA decide to ATTEMPT to roll prices back to September 1942? Because the real truth is that the cost of living has risen far beyond any wage increases that the workers have received.

Why Have Prices Risen?

Why have prices risen? They have risen because the vested interests dealing in the commodities which the people need in order to live have been super-profiting under the special conditions created by the war. The capitalist-boss press lies when it says that prices have risen because the wages and salaries of the workers and the little people have advanced above the cost of living.

The best proof of that is to be found in the most recent action of the War Labor Board. The ink had hardly dried oh the presidential “hold the line” order, when the WLB asked Economic Stabilization Director James F. Byrne to restore its power to grant wage increases to eliminate gross inequities. The War Labor Board proves by its own experiences that those wages which were increased had no effect whatever upon prices. It cites the fact that “in only eight cases out of every 3,000” were prices affected by wage increases, and that on the whole these wage increases, nowhere comparable to the rise in the cost of living, have had only “a microscopic effect upon prices.”

But the workers do not need this kind of testimony from the WLB. They know by their living experience that the price situation in this country is a scandal, that there is no control of prices and the cost of living. They know that the only control exercised by the Administration has been control of wages, and an adherence to wage ceilings!

The OPA announces that it will roll back the pride of many foods ten per cent. This is merely appeasing the laboring masses. George Meaney, secretary-treasurer of the American Federation of Labor, declared that it is not enough for the OPA to roll back prices on SOME food articles, and then only by ten per cent. Meaney said:

“This will not begin to give the little people of America the relief they need. When basic foods have gone up 20, 25 and 30 cents per pound, it is not enough to snip off a penny here and two cents there. A reduction of ten per cent on seven items, when an increase of 100 per cent and more has taken place on dozens of items, is not enough.”

Price control is a misnomer. There has not been any price control. There has been an almost unlimited rise in prices and those who have had to pay for it have been the working people of the country!

How Control Prices?

We have already stated that one of the principal reasons why prices have risen is that there was no real attempt at price control by the Administration. When Prentiss Brown publicly stated that it was impossible to really control food prices, he merely gave the signal to the profiteers to go the whole hog. But another reason why prices have risen, with such disastrous effects upon the people is that the labor movement, cooperatives, fraternal organizations of the people and the consumers in general were not permitted to have a say about prices or help in their control. In other words, those who directly suffer from price increases had nothing to say about it and had no means of exercising any control.

How does the Administration propose to roll back prices now? Here is the real joker in the situation. The Administration proposes to roll back prices (some prices and only to a limited extent) by giving a subsidy to the food profiteers. Under such conditions, the food profiteers will gladly roll back prices, because their huge profits will be insured by a handout from the government.

FDR’s Subsidy Plan

Roosevelt’s order for a roll back of prices was accompanied with the directive that the Reconstruction Finance Corporation aid the price roll back by setting aside $300,000,000 to compensate the big farmers, the big commission houses, the merchants and the food processors for price reductions! This amount may be increased to $500,000,000 if more than a few food items are included in the roll back.

What is the net effect of this subsidy? It will still guarantee the profits of these gentlemen. It keeps as heavy a burden on the people because in the end taxes will have to make up for the handout given the gentlemen who trade in food and the necessities of life. The whole subsidy idea is a subterfuge!

The food merchants like the idea of a subsidy. It makes no difference to them if they get their extra profits directly from the people, or if the government hands it to them in the form of a subsidy – later to be regained from the people. In the New York Times of May 10, Seeman Brothers, Inc., owners of White Rose products, published a full page ad with a speech of Raymond Gram Swing in support of the Roosevelt subsidy plan. Workers must not be fooled by all this. They must stand up and say: We want a real reduction of prices and we want a RAISE IN WAGES so that we can meet the increased cost of living!

The workers must say: We don’t care about the profits of big business. You say that the war means equal sacrifice. For us it has meant real sacrifices – wage freezing, job freezing, higher taxes, higher prices. For the bosses it has meant greater profits. Let us see you eliminate the war profits of big business.

The situation in the country is fast coming to a head. The miners’ fight clarified the issues. All honor to them! The WLB was put on the spot, and the proof that the miners were right is that the WLB itself demands that it be given expanded rights in dealing with wage matters. The AFL and the CIO now threaten to resign from that body unless the Presidents order to “hold the line” is made more flexible so that the WLB can meet the demands of the workers faced with the high cost of living. The President himself is reported to be reconsidering the question of prices and wages – so unfair and unequal are the burdens which fall on the people.

The situation demands that, on the price front at least, labor and the consumers set up their controls. Nobody else can or will do it. But the labor movement and the consumer must have authority and power to exercise such control. If the control of prices remains lodged in the OPA and in individuals who represent big business, or are allied with them; or are influenced by them; the people of the country face the: dreadful prospect of a worsening price situation and a continued lowering of their living standards.

The miners pointed the way out – let it be a living example for the rest of labor!

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