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Gertrude Shaw

Some Whys and Wherefores
on the Subsidies Question

(6 March 1944)

From Labor Action, Vol. 8 No. 10, 6 March 1944, p. 1.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

“It is clear that we cannot hold the wage line if the Congress deprives us of the means necessary to hold the cost of living line.”

How many people who have regarded the President’s veto of the anti-subsidy bill – sustained by Congress – as a “great victory” for labor, are aware of the meaning implicit in that sentence from the President’s veto message?

If words have any reliable meaning at all, then the above quoted sentence signifies that in the opinion of the President the subsidy payments have held the cost of living line. This is obviously false – for the simple reason that the cost of living line has not been held.

Impressive but Misleading

It was very impressive when the President enumerated how prices would rise if subsidy payments to the food profiteers were discontinued. Butter, he said, would go up ten cents a pound, cheese eight cents, hamburger four cents, bread one cent, flour seven cents on a ten-pound bag. The President mentioned one or two other commodities on which the prices would go up if subsidies were discontinued.

We know, however, that the cost of most of these commodities had gone up by leaps and bounds before the food profiteers were bribed with $1,250,000,000 subsidies to stop them from pushing still higher the prices of this very insignificant number of the total list making up the necessities of life.

But what about the cost of living as a whole – what about that long list of other commodities making up the wherewithal of life?

It has been authentically proved by the labor representatives on the President’s Cost of Living Committee that prices have gone up 43.5 per cent since 1941. The President’s clever oratory and ability to turn a few figures into false shapes should fool nobody.

This is exactly what the subsidy issue at this time was designed to do. By vetoing the anti-subsidy bill, by Congress sustaining the veto, by food subsidy payments continuing, one is supposed to conclude that the President now has “the means necessary to hold the cost of living line.”

So, now what is expected to happen? Why, labor is supposed to “HOLD THE WAGE LINE.”

“Psychological Considerations”

Very revealing on this subject is a letter written by Chester Bowles, OPA Administrator, in the New York Times of February 11. He points out that the $1,250,000,000 paid out in food subsidies meant a direct saving to consumers of only $378,000,000. “This $378,000,000 savings would not in itself justify the use of these subsidies.” But Mr. Bowles goes on to say: “However, there are other considerations, some of them psychological ...”

What are the psychological considerations which Mr. Bowles and also his chief in the White House have in mind?

“Today, some labor groups feel that wages should be allowed to go higher ...” Mr. Bowles reminds the editor of the New York Times.

Just as the President intends to play subsidies for all they are worth against wage demands, so also does Mr. Bowles regard the “psychological considerations” involved here as most important.

Without regard for facts, Mr. Bowles speaks about “the present balance between wages and prices (imperfect though it may seem to the various groups concerned).” A very mild word indeed is “imperfect” to describe the 28.5 per cent gap between the fifteen per cent of the Little Steel formula and the 43.5 per cent increase in prices.

A Drunkard’s Balance

The demands of steel, rubber, auto, packinghouse and many other workers for wages commensurate with the present cost of living bothers the political as well as the industrial bosses. It is clear that subsidies have been kept mainly as a weapon against higher wages.

That is why “the present balance between wages and prices (imperfect though it may seem to various groups concerned)” was not disturbed by discontinuing the subsidy payments. With the important case of the United Steel Workers now before the War Labor Board, it is hardly the psychological moment for the political bosses to add even another small argument to the already well-sustained, case for higher wages.

The fact that the political bosses did not discontinue the subsidy payments at this time makes the representatives of big business on the WLB a bit more authoritative in their assertion that the “board has no authority whatever to hear any arguments in favor of changing the wage stabilization policy.” For did not the President’s veto of the anti-subsidy bill, forsooth, “hold the wage line” by continuing “to hold the cost of living line”?

Such flim-flam will not influence the rank and file of labor in its wage demands. But you may be sure that the labor leaders who have been so very amenable to the wiles of the White House will have their ears dinned full of the most specious arguments in best Rooseveltian style.

They will be admonished to “hold the wage line” since – isn’t it true? – the President is holding the price line. They will be warned that the demon of inflation will get them if they disturb Mr. Bowles’s non-existing “present balance between wages and prices.”

However, the rank and file of labor are more influenced by the bread-and-butter considerations behind their demands for wage increases than with the “psychological considerations” of the politicians. Also, they are tired of the way in which their leaders accommodate themselves to the nuances of White House policy at the expense of the pressing needs of the working man.

“Psychological considerations” won’t be a substitute for burying the Little Steel formula, whose carcass hangs like lead around labor’s neck.

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