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From Labor Action, Vol. IX No. 25, 18 June 1945, pp. 1 & 2.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
CIO President Philip Murray and AFL President William Green have again put the Little Steel formula at the top of the agenda. They have gone to the White House and meekly submitted to their new “friend” there the demand that the basic wage rates, be increased by twenty per cent. That means breaking the wage freeze.
About one and a half years ago the fight against the wage freeze began with the demand of the steel workers for a seven-teen-cent an hour increase. Lengthy hearings were held before Congress and before the War Labor Board. Statistics were gathered on the rise in the cost of living. Labor’s case was strong. However, Murray allowed the matter to be kicked around, prevented the workers from taking strike action, and before long election was here. And how could Roosevelt’s labor lieutenants bother the President at election time With such a trifling question as breaking the Little Steel formula!
Instead, labor leaders, especially in the CIO, talked as if wage increases were actually in the bag. According to them, the first thing Mr. Roosevelt would do after election would be to order the lid lifted off wages. But nothing like that happened. The steel workers’ case was settled by throwing them a bare bone. The Little Steel formula still stands.
So what is the general wage situation today?
AFL President Green estimates that the take-home pay of the workers is due to be cut by $23,000,000,000 in the reconversion period. That’s an i enormous sum. Overtime is going, going, and will soon be gone. Workers will be lucky if they get pay for forty hours. Part-time jobs will once more be in style. Many workers will be downgraded to lower paying jobs. Skilled workers will be forced into unskilled work. The take-home pay will all but fade out in many cases.
But these considerations have not moved Mr. Truman. He remains loyal to the late President and to the capitalists. After Messrs. Murray and Green respectfully left the White House, Mr. Truman informed his press conference that the Little Steel formula stands as firm as the Rock of Gibraltar – but, of course, he would take the requests of the heads of the CIO and the AFL under advisement.
Yet the demand for a twenty per cent increase in basic hourly pay is modest enough. Murray states that the object is to bring about the same relation between wages and prices and the productivity of labor as existed in 1940. However, the twenty per cent increase would not do that, as the following simple arithmetic will show.
Murray says that ten per cent of the twenty per cent asked for is to take care of the increase in prices since 1940 above the fifteen per cent allowed hy the Little Steel formula. But, according to the figures of the CIO itself, hack in the early part of 1944, living costs had increased by over forty-five per cent. This leaves not only ten per cent but thirty per cent owing to the workers for price increases – the difference between the fifteen per cent of the Little Steel formula and the actual rise in living costs.
The other ten per cent of the twenty per cent asked by Murray is for the rise in the productivity of labor per hour since 1940.
But ten per cent is too low a figure. Twenty per cent increase in labor’s productivity per hour is nearer the truth. It is estimated that 38,000,000 workers will be able to do what 46,000,000 did in 1940, and that means an increased productivity of labor of more than seventeen per cent.
Certainly, in view of the above, a twenty per cent basic wage increase is modest enough. AFL President Green estimates that it would cover only $13,000,000,000 of the $23,000,000,000 lost take-home pay in the reconversion period. But still Mr. Truman says NO.
Can industry “afford” to raise wages? It, of course, claims it can’t. But let us see.
Industry’s profits for 1944 before taxes reached a high of $25,000,000,000. Industry’s capital reserves in cash and government bonds will amount to $58,000,000,000 after government contracts have been cleared up. That answers the question of whether industry can “afford” to raise workers’ wages.
What have the workers in reserve?
Back in 1942 the OPA found that two-thirds of all the consumers earned less thin $50 a week, and that these two-thirds owned only one-ninth of the nation’s savings. Last September the Department of Commerce again substantiated this fact. Since then from other sources comes proof that workers’ families have been able to accumulate little if any savings.
For this situation the Little Steel formula is directly responsible. It has prevented labor from getting its share of the tremendous wealth it has produced during these war years. In fact, there are outstanding cases of labor’s share in corporation revenue having decreased steadily during the war years. A few examples are in order.
There are scores of other examples along these lines. And remember that the tremendous war salaries of corporation officials are included in these percentages, leaving even less to the workers.
Above, in graphic form, is the purpose of the Little Steel formula. As always, wages and profits stand in this simple relationship: The more there is of one, the less there remains of the other. The war profits of industry prove that the legalized robbery of the workers by the capitalists, has been intensified. For this, the labor leaders must take their share of blame. In tolerating the Little Steel formula, when it is so flagrantly a weapon of the capitalists, and in crippling labor’s striking power with the no-strike pledge, the Murrays and Greens have willy-nilly played the game of the profit-grubbing capitalists.
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