The Horn's of Labor's Dilemma


By GEORGE MEANY, Secretary-Treasurer, American Federation of Labor

Broadcast over Mutual System, April 23, 1943

Vital Speeches of the Day, Vol. IX, pp. 455-457.

N this titanic world struggle in which our nation is playing a most vital part, production of war essentials and final victory itself are inevitably tied to the question of food.

The importance of food in wartime—both on the war front and on the home front—cannot be overemphasized. We are at war against a tough, vicious enemy who has never underestimated the importance of food as a weapon of war.

To win this war all of us must fight harder and work harder than ever before. Everything we do, as a people, must be measured by its effect on our fighting power at the battlefront and on our production power on the home front.

It is in this spirit that I speak tonight about the most serious problem that the American worker faces today in his efforts to produce the things our boys at the front need to bring final and complete victory.

The record of the American worker in the war to date gives him the right to be heard through bis chosen representatives in a spirit of constructive criticism on any matter which affects our war effort. This record has two sides.

The American soldier and the American worker are oneand the same man. As I speak to you tonight, millions of men from the families of American working people are already in uniform and, as our nation during the next few months selects an additional 4,000,000 men for fighting, it is safe to assume that most of them—as in the case of those already in uniform—will come from the homes of American wage-earners.

In an all-out war the fighting men depend upon the home front—the production front. And so the other side of American labor's record in this war is being made here at home. Here we find millions of American workers, men and women who hate Hitlerism and totalitarianism in any form, turning out planes, ships, tanks, guns and all the other necessary implements of warfare.

These men and women of labor are producing these planes, ships and other articles at the fastest rates ever attained—faster than they are being produced in Great Britain and in Russia, faster than they are being produced in Germany and Japan.

Let me give you, in passing, just a few figures on our production. In the short month of February American wage-earners turned out, among other things, 419,000 bombs, 8,000 cannon for aircraft, 2,500 tanks, 14,000 Army trucks and 75,000 machine guns. Last month, the month of March, our shipyards delivered a total of 146 Liberty ships, just a little less than five 10,000-ton cargo ships per day. This month, April, as Donald Nelson said the other day, our aircraft plants are turning out 7,000 warplanes.

This is what American labor is doing here at home. Yet, amazing as this record is, we are determined to step it up and then step it up again. It is no military secret that war production must be greatly increased to supply the amounts needed for victory.

In the face of these imperative demands upon our war production, American labor today finds itself squeezed between the jaws of an economic vise. On the one hand, we find wages practically frozen by a government decree that has, to all intents and purposes, made the Little Steel formula the law of the land. On the other hand, we find a steady and continuous rise in prices of all the commodities that are essential to the maintenance of a standard of living under which the workers of our country would be able to meet the tremendous demands made upon them.

Let us look for a moment at one of the horns of labor's dilemma—the Little Steel formula. This formula, first enunciated by the War Labor Board about one year ago, is based on the arbitrary assumption that there was a reasonable and proper balance between wages and living costs on January 1, 1941. The idea back of the formula was to maintain that balance so that neither wages nor living costs would get out of hand and thereby cause a rising spiral and eventual inflation.

In this connection let me state emphatically that labor is just as aware of the dangers of inflation as are the economic theorists.

When the War Labor Board, about one year ago, ascertained by official figures that the cost of living had risen by 15 per cent between January, 1941, and May, 1942, it assumed that wages should increase 15 per cent to compensate for this rise in the cost of living and thereby maintain the theoretical balance.

Now we find that, although the cost of living has advanced quite rapidly since May, 1942, the 15 per cent then allowed to compensate for the increase, up to that time, is ail that is now going to be allowed.

Labor objected to the Little Steel formula when it was first adopted by the War Labor Board, but when a decision was reached by majority vote the labor members of the Board cooperated wholeheartedly in applying this formula to the wage stabilization problem.

Now let us look at the other side of the picture. Let us look specifically at the one item that is the largest single factor in the cost of living, which we have been trying so hard to keep in balance with wages. This item is food.

What has happened to food prices? What has happened to the prices that our government agency in charge of price control has told us, time and time again, would be held down? Have food prices been held in check? Are food prices under control? Or are they already so out of bounds as to constitute not only a rank injustice to the American people but an actual threat to our war effort?

Mr. American Citizen, you know the answers to these questions. Or if you do not happen to know, your wife certainly does. Just ask her. There isn't a housewife in America who has not had the answer pressed home to her day after day in her trips to the grocery store, the meat market and the vegetable stand.

Are food prices being held down? The answer is a loud resounding no. Are food prices too high? Emphatically,yes. They have reached a point so high that the future of our war effort is most seriously threatened. The truth is that price control by government, insofar as it relates to food in this country, has been a miserable failure.

Let us be specific about this. Let us look at retail cash prices from the markets of an industrial city in the Midwest—a typical American community. Prices on staple food articles, verified by newspaper advertisements from this city, are quoted in full in this month's Federationist, the official magazine of the American Federation of Labor. What do we find here? Potatoes—just plain potatoes—which cost 25 cents a peck in January, 1941 now cost 89 cents a peck. This, in terms of percentage, represents an increase of approximately 250 per cent. Wage rates for millions of American workers are held down to 15 per cent; but potatoes, one of the worker's staple foods, are up 250 per cent.

The price of hamburger, in this same city, has gone from 17 1/2 cents a pound to 45 cents a pound in the same period of time. Cabbage has gone from 5 cents to 15 cents per pound. Boiled ham, which so many workers use for sandwiches taken to the shop for lunch, has gone up from 35 cents a pound to 75 cents a pound in this same industrial city.

Let me give you some figures secured from another of our American industrial cities by an American Federation of Labor survey, made on the basis of present cash prices as against prices quoted in newspaper advertisements in January, 1941, What do we find in this town?

Bread up 22 per cent. Butter up 69 per cent. Milk up 18 per cent. Oranges up 116 per cent. Cucumbers up 141 per cent. Green peppers up 275 per cent. And potatoes up 219 per cent. In the meat line, in this same town, we find hamburger up 172 per cent, pork chops 113 per cent, lamb 105 per cent, boiled ham 212 per cent.

While these examples I have given refer to but two cities, our information in Washington indicates that this condition prevails in every city in the nation.

In short, despite what some statisticians may tell us as to the cost of a theoretical meal for a theoretical worker in a theoretical city, the workers of America and their wives know that the cost of food, generally, has doubled in the past two years.

What does this mean to the American worker and to his wife and family? It means that the American housewife, confronted with such sky-high prices and desiring to discharge her responsibility of keeping the war workers in her family nourished so that they can produce for victory, has no alternative but to pass up the foods which are essential to a balanced diet but which are now beyond the reach of the average family's pocketbook. It means that, with wages practically frozen, the steady, continuous advance in food prices represents a steady, continuous decrease in real wages for the American worker.

In effect, it means that his standard of living—a wartime standard, if you please—is slowly but surely being destroyed.

It is quite true that many workers are now earning more than they formerly made, but it is also true that millions of workers have received no increase in pay in the last three years, or have received purely nominal increases amounting to three or five cents an hour, or $1.50 to $2 per week.

The average worker in non-durable goods is earning $32 a week. The average worker in durable goods, which category includes all the war industries, has a take-home pay of $47 per week. The average pay envelope for all manufacturing holds $41. This is the actual average for take-home pay in all manufacturing industries, including overtime as well as straight weekly earnings. These are official

U. S. government figures—figures compiled from the nation's payrolls.

Forty-one dollars per week for a man and his family in a war industry does not mean inflation or extravagance, even in ordinary times, yet millions get far less than this. From this sum must come rent, shoes, clothing, insurance, medicine, taxes and—most important of all—food. Let us remember, in this connection, that the low-paid worker is now paying a heavy tax which was placed on his shoulders since the May 15, 1942, wage freeze date as embodied in the Little Steel formula.

March 15th of this year meant that the average American had to pay out a large income tax in addition to the hidden taxes that he always pays on consumer goods. Labor has no protest against paying its share of the cost of preserving our democratic way of life, but in terms of war production—which must be our controlling yardstick in measuring all of our activities—money for food must take priority in the worker's budget over money to be laid aside for taxes.

The worker must have food of sufficient nutritional value to enable him to produce at a rate which industrial history has never heretofore known. A Flying Fortress is a wonderful instrument of war, but if it has no fuel it cannot get off the ground. The American worker, as figures prove, is a wonderful producer, but if he does not have sufficient nourishing food in his stomach he cannot do a job at top speed and at peak efficiency.

Let me make it clear at this point that labor has no complaint or protest against the policy of food rationing. Labor has been in favor of rationing from the start. To workers rationing means that the person with a small income get a fair share of the foods available—provided always, however, that he has the money to pay for what he needs. Neither is labor protesting against lend-lease shipments of food to our fighting allies. The American worker knows that a pound of butter for a Russian soldier or a can of bully beef for a British soldier in Tunisia is food for our defense. We have favored rationing, we have favored lend-lease, we have favored price and wage control.

We have wage control. The War Labor Board, underthe Executive Order of the President, has done a real job of stabilizing wages. We have not had and do not have effective price control insofar as food is concerned.

What then is the answer to the dilemma of the American worker today? His wages are practically frozen and food prices are SKYROCKETING to a point where sufficient food for the worker and his family is beyond the capacity of his pay envelope. The answer is simply this:

Let us reestablish the balance between wages and food prices by pushing back the retail cash prices of ail food staples to the level which prevailed on May 15, 1942, which is the date used to control wages under the Little Steel formula. Holding the present line on food prices is not enough. The American people are already over their heads. PRICES ON FOOD STAPLES MUST BE ROLLED BACK.

Can we expect this to be done under the present governmental policy? Obviously not. According to the senior assistant to the Director of OPA, in a remark of three or four days ago, there is nothing in the President's hold-the-line Executive Order of April 8th to prevent price "adjustments." This statement was evidently made to appease certain food producers by indicating that the President's order did not prevent OPA from allowing prices to go even higher than they are today.

The answer appears to lie in an application of the same method by which the lid has been put on wages. Under the President's wartime powers an Executive Order to OPA should be issued, not stating in general terms that food prices should be held down, but stating in definite, specific terms that retail food prices MUST BE ROLLED BACK WITHIN A DEFINITE, SPECIFIC PERIOD OF TIME TO THE LEVELS WHICH PREVAILED ON MAY 15, 1942.

Only in this way can the American worker be assured that he will be unhampered in his efforts to perform the tasks that he is not only willing to do but that he is anxious to do—to produce all the weapons of war that our nation needs for final and complete victory over the forces which are attempting to destroy everything the American worker holds dear.