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By Norman Freed

INANCE MISISTER Mitchell Sharp’s federal
budget has been described as “toothless”.

Unfortunately it still bites the little guy,
the working man, as hard as ever because he still
has to bear the burden of a skyrocketing cost of
living.

The budget fails to deal with the real core of

the inflation problem—i.e. the unrestricted power

of the large corporations.

A number of recent articles in the Canadian
Tribune have already dealt with rising living
costs. The March 21 issue carried a report of the
submissions of the Canadian Labor Congress and
the Confederation of National Trade Unions to
the federal government.

As the CNTU brief pointed out, Canada ex-
perienced a 6 percent economic growth in 1965.
But who benefitted? :

The CNTU showed that while the annual in-
crease in after-tax profits was 2.7 percent in 1960
and 9 percent in 1964 the increase in wages was
2.6 percent in 1960 and only 4.4 percent in 1964,

Measured in purchasing power and not in in-
- flated dollars, real wages increased by 1.3 percent
in 1960 and by only 2.6 percent in 1964. In other
words, while profits increased by 9 percent, wages
increased by only 2.6 percent. The main benefits

LIVING COSTS:

THE VISE
TIGHTENS

Sales tax increases have provoked protest
demonstrations such as this one organized by the
Communist Party in front of the Ontario Provin-
cial Parliament in February.

Profits rise faster

- RATES OF INCREASE OF LABOR INCOME
: AND CORPORATION PROFITS
FROM 1960 TO 1964

Labor Corporation
Year income profits
1960 100 100
1961 101.1 101.5
1962 108.6 118.9
1963 115.2 125.6
1964 125.7 140.8

of economic growth went to the big corporations. °

It should be noted that the war in Vietnam
feeds the inflationary spiral. The escalation of
Profits, prices and taxes matches the escalation
of the dirty war against the people of Vietnam.

An article in the March 28 Tribune gave some
examples of the vising cost of living. Perhaps it
Would be worth adding the general statistic that
the consumer price index, set at 100 in 1949, has
risen to 141.2 percent in January, 1966 — an in-
crease of almost 50 percent.

This trend of a rising living cost has been ag-
Sravated in the recent period (the cost of living
index rose by 3.1 percent in 1965) and especially
n the past few months. Not only are dollar wages
lagging behind profits, but because of increased

prices real wages—-i.e. the real purchasing power
of the people — are declining.

This trend, of consumer demand lagging be-
ind the economic productive capacity, could
Yeate conditions for a slowdown in economic
8rowth, bring increased unemployment and a re-
cession,

In a review dealing with economic growth from”

1946 to 1963 the Economie Council of Canada
points out that “real output per person employed
has risen by 50 percent” and “real output per
man-hour has increased by almost 70 percent.”

This means the unit cost of production has de-
creased considerably because of the growth of the
productivity of labor. By all the laws of economics
and common sense it would seem. that prices
should have declined. But this is not the case.
Despite the reduction in the unit cost of produc-
tion prices have increased.

Why? The answer is that the large corpora-
tions, foreign and domestic, which occupy a mono-
poly position in our economy, are able to control

and determine the level of prices almost at will. —

. This absolute contro] over our lives by the large

monopoly corporations exposes the myths about
free competition and the free operation of the
Jaw of supply and demand. The power of the large
corporations is despotic. They are able to satisfy
their lust-for profit at the expense of the major-
ity of the people. It is time to clip their wings,
to bring their despotism under at least a measure
of democratic control.

But instead of taking steps to curb the anti-
popular actions of the large corporations the fe-
deral and provincial governments have increased

'the burden on the consumer through sales taxes,

which raise consumer prices. People in Ontario
began to feel the sharper bite of sales taxes on
April 1, for example.

The budget of Finance Minister Sharp does no-
thing to substantially change this situation.

In an article in the March 28 Tribune Stan
Lynn asks what measures should be taken by the

government to combat rising prices. He warns
that the tendency will be to try to place the

‘burden of such measures on the backs of the
_working people.

There are at least four specific steps which
could be proposed to deal with this problem in
the interests of the working people:

@ The labor movement should undertake a
drive for substantial wage and salary increases
to meet rising living costs. e

@ Sales taxes should be eliminated; they should
be replaced by increased taxes on corporate pro-
fits.

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@ Price tribunals should be established to com-
pel the large corporations to show just cause
for any increase in prices.

@ Welfare and pension payments should be in-
creased to correspond with rising prices.

A proposal.of price arbitration boards before

which corporations would have to show just cause -

before price increases was advanced by the Con-
federation of National Trade Unions in its brief
to the federal government. : :

This would be a major step against continued
inflation. It should be emphasized that setting up
such boards would not justify any similar recom-
mendation to establish wage arbitration boards
because, as contrasted to the corporations which
can increase prices at will, labor cannot unilater-
ally increase wages.

If we are to achieve higher living standards, in-
crease the purchasing power of the people and
maintain a steady, uninterrupted economic
growth, the despotic actions of the large corpor-
ations must be crushed and brought under demo-
eratiec public control. This can be achieved by a
united Jabor movement in cooperation with all
democratic Canadians.

April 15, 1966—PACIFIC TRIBUNE—Page 5

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