Word: wage
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Dates: during 1950-1959
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...paradoxical recession, perhaps the biggest paradox of all is the leapfrogging race between prices and wages that has continued long after the general economy paused for a breath. Though price cuts are on the rise (see Metals), they have not been fast or sharp enough to hold down the steady rise in the cost-of-living index. Nor has labor trimmed its wage demands in the face of poor sales and lower profits (see Autos). Last week Chicago Federal Reserve President Carl E. Allen took both management and labor to task for what he called a "price and cost rigidity...
Labor unions, says Allen, "introduced undesirable rigidities into our cost structure" with the automatic cost-of-living hike that makes about 4,000,000 workers eligible for wage increases in 1958. Employers in turn "accepted such rigidities so long as selling prices could be increased without reduction of markets." Now the situation has changed. "We have had several months of declining industrial production. And the decline in business volume is conspicuous in those industries which set the fashion of long-term wage contracts with assured annual increases." What is needed are sharp price cuts. But instead, some industries have actually...
...return of inflation, since prices, which normally drop in a recession, have held up surprisingly. Though many retail prices and some wholesale items dropped, the level of the nation's basic commodities is unchanged. The reason, say businessmen, is the organized labor philosophy that good business or bad, wages-and thus prices-must go up every year. Therefore, steelmen refuse to cut prices, not only because they say it would not improve business, but also because they face an automatic 7% wage increase next July 1; Detroit refuses to lower auto prices largely because it must renegotiate auto contracts...
What labor has not learned is that just as businessmen must suffer from reduced business and lower profits, so labor must also bear some of the cost of a business downturn. Businessmen fear that the U.S. will not be on solid ground for an upturn until the wage spiral is broken, and productivity, which has not been rising as fast as wage rates, catches up. Said Industrialist and longtime Federal Reserve Chairman Marriner Eccles: "Organized labor has already jeopardized its interests by pricing many of its goods and services right out of the market...
DRESS PRICES will creep up by summer as result of 8% wage increase won in dress strike (TIME, March...