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Albert Gates

Truman Opposes Labor’s Demand
to Maintain War Take-Home Pay

Is Vague on Wage Increase; Proposes No Cut in Profits

(5 November 1945)

From Labor Action, Vol. IX No. 45, 5 November 1945, pp. 1 & 2.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

President Truman’s radio address reciting the Administration’s policy on wages was listened to by the whole nation. None was so interested in this aspect of the government’s domestic policy as the workers of the country, for the problem of their wages and standard of living is immediate and acute.

The end of the war found labor rewarded for its sacrifices by mass layoffs and a drastic reduction of its wages. But labor is now on the march, fighting desperately to prevent further slashes in its income and demanding in its counter-offensive wage increases up to thirty per cent to make up for the great drop in take-home pay. It is this offensive of labor which caused President Truman to treat the problem of wages in a public address to the nation.

The President’s speech was both an acknowledgment of the justness of the demands of the workers and an evasion of any concrete proposals which could immediately alleviate the sufferings of millions of workers brought about by the lack of a plan and program by the Administration to meet the post-war and reconversion period.

Thus the speech also was an admission of a tremendous failure on the part of a government which planned for war but could not plan for peace.

The President, in justifying his general position that labor deserves an increase in wages, pointed out that already there has been a decline of twenty billion dollars in wages paid to the workers. This is creating, he stated, great hardships for the workers. To overcome this slash in the workers’ income he proposed that wage increases be permitted in three categories:

  1. Cases in which the percentage of increase in average straight-time hourly earnings since January 1941 did not match the increase in the cost of living.
  2. Cases of inequalities among plants in the same industry in the same locality, in conditions of normal competition.
  3. Cases necessary to insure full production in an industry designated by the Stabilization Administration as necessary for reconversion and where existing wage rates are inadequate to recruit manpower.

This is presumably an executive order. But it is really a statement to the effect that the overwhelming majority of the workers in this country have been and are being cheated of their just earnings. In all three categories it is acknowledged that industry has not been paying labor its full wages.

Case for Increases

President Truman outlined five reasons why wage increases can be given by industry. They uphold every argument of the labor movement at the same time that they indict the President’s evasions in his wage speech. The five reasons given are:

  1. Reduction in per hour labor costs by the elimination of time and a half for overtime.
  2. Increase in the number of people needing jobs.
  3. Increased output per man hour.
  4. The very favorable profit position of business.
  5. Prospective elimination of the excess profits tax.

Having endorsed labor’s demands for wage increases and having conclusively demonstrated that such increases can easily be granted by industry, what does President Truman recommend? NOTHING! Why not? Because the President is straddling the issue. His aim is to placate labor’s demands by acknowledging the necessity for wage increases while at the same time advising capital that he is not proposing what these increases should be. He merely says that wages should be settled by collective bargaining and that labor must expect a drop in its take-home pay.

Silent on Cutting Profits

But the President has not a word to say about profits. He does not propose a out in the tremendous profits of industry; He does not come out in support of labor’s demand’ for a thirty per cent increase in wages. He merely says that a wage increase should be given. Even industry is willing to grant that. The real issue is HOW MUCH of an increase should be given?

The Administration had sufficient information at hand to know how much should be given to the nation’s wage earners. Government statisticians have reported that a blanket wage increase of fourteen per cent would allow industry a profit of $6,300,000,000 in 1946 after all taxes are deducted. This is three times as much as the pre-war average profits of $2,142,000,000!

An average wage increase of twenty-four per cent would still allow industry profits of $4,800,000,000 after all taxes are deducted, which would still be more than twice the profits of the pre-war years.

Truman evaded the question of how much wage increases should be permitted because he did not want to come to actual grips with the real problem of the day: the refusal of big business to cut down its profits and its insistence that labor pay the bill for the post-war period and reconversion just as it paid the bill for the war economy.

Back of the President’s speech is the militant struggle now carried on by labor. It is only this struggle which compels the President to give such consideration to the problem. But labor should remember that Mr. Truman proposes nothing. Labor will get something only if it carries on a vigilant and persistent fight in its own behalf. Without such a struggle labor will- get nothing from the government or big business.

The propaganda purpose of Truman’s speech must be sought for too in the international situation, which sees relations among the powers deteriorating swiftly. Truman’s speech is. also a plea to American labor, aiming to procure its support in any future political crisis.

It is true that the President criticized two committees of the House for scuttling the Full Employment Bill and the Unemployment Compensation Bill, as well as Congress for turning back U.S. Employment Service to the states. In this he merely stated to the nation that he is the bead of a party which is the majority of the government but which acts for big business against the best interests of labor.

The answer to that is clear. Labor has no political party in Washington. Labor needs its own party. It needs a Labor Party, independent of the political parties of big business which pan and will act in the interests of the working class.

If industry cannot pay the just wage demands of the workers there is an answer to that too. Let them get out. Nationalize the big monopolies under workers’ control of production so that industry may produce for the needs of the people and give the workers a living wage and security.

If this government won’t do it, then labor should get its own government, a government of, for and by the workers. This is the only fitting answer to a situation where labor bears the brunt of the post-war period and reconversion unemployment. It is the only real answer to, the situation described in the President’s address.

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