What Pegging THE BC LUMBER WORKER April 80, 1941 Of Wages Means To B.C. Labor By Harold J. Pritchett, Executive Secretary, Vancouver Labor Council, Canadian Congress of Labor i i iti i i i -in- il, P.C. 7440, announced by anized and unorganized labor of British Columbia have reason to view with alarm the recent Order-in- Council, PC. , any ae of Labor McLarty. It proposes to prohibit increases in wages and substitute instead bonuses based upon the rising cost of living and can only be considered as an attack upon the basic democratic organizations of the people, trade unions and upon their living standards, If this measure is allowed to continue the direct affect on trade unions will be disastrous and twofold in nature. First, it will tend to under- mine the utility of unions for the workers because with the government setting a ceiling for wages the bargaining power of Ce ad labor will be severely curtailed. Second, the Order-in-Council will further hinder organization of the unorganized since it holds no possibility of workers inereasing their standards as a result of the favorable conditions arising from improved markets. : = es Furthermore, labor is opposed to P.C. 7440 because it jeopardizes and nullifies labor’s hard-earned right to bargain collectively as to wages, hours and working conditions with their employers. Labor is handicapped further in negotiating with their employers by the establishment of a government ceiling on wage levels. Labor organizes for the purpose of improving wages and working conditions and welcomes government assistance in establishing a wage mini- mum, but strongly objects to the establishment of a government maximum based upon the wage levels of the years 1926-29. Arbitration: Past, Present Arbitration, prior to the introduction of this order-in-council, was utilized to a certain extent by labor through its or- ganized strength to compel its just de- mands. Now this hope is reduced to a minimum or completely wiped out since the pegging of wages negates voluntary arbitration, coupled with the fact that all arbitration awards must be passed on to be revised or completely rejected by Minister of Labor McLarty, Improved business and market condi- tions have created favorable circum- stances for workers to increase their wages and living standards but these advantages are nullified by the govern- ment’s policy of reviewing awards and forcing their revision or rejection accord- ing to the formula of P.C. 7440. Labor is ultimately driven to the con- clusion that the order is designed to safe- guard and protect Big Business and its exorbitant profits against the economic needs of the working people. At no time in the history of Canada has such a re- actionary policy been instituted against the working people. It belongs not in Canada, but in fascist Germany and Italy and is a direct reflection of the tremen- dous influence over government by Big Business monopoly in this country. Disputes A dispute arises in a shop over wages, hours or working conditions. The em- ployees, through their union, request ‘their employer to bargain with them col- lectively to reach an amicable settlement. The employer refuses, for despite Order- in-Council 2685 issued last June 19, af- firming labor's right to bargain collect- ively, the employer is under no compul- sion to do so. The employees are thus left with only one course. They cannot strike to en- foree their demands, for that would be in violation of Order-in-Council 3495 ex tending the Industrial Disputes Investi- gation Act to all war industries. They can only take a strike vote declaring their intention to strike. Once a strike Vote is taken, the government is required to appoint a board of conciliation and in- vestigation under the terms of the I.D.I. Act. So the dispute goes before a Board, But once they are before a Board, the possi-~ bility of the employees gaining their de- mands is so limited by the terms of P.C. 7440 that collective bargaining becomes meaningless. For even if the workers persuade the Board of the justice of their demands for wage increases and cite their employer's profits in support of this demand, the Board can only recommend that wages be raised to the 1926-29 aver- age. However, if the Board finds that 1926-29 wages were “unduly enhanced or abnormal,” it need not recommend such an increase. Moreover, if it can be shown. ‘that an increase to 1926-29 wage levels id be “out of alignment,” then the can limit the wage increase to ent each year, just to be sure that no board ig- } any of the recommendations con- ‘PC. 7440, the order provides that all Board findings shall be reviewed by the minister of labor who can recon- vene the board to “reconsider” any “devi- ations” from the order's recommenda- tions, One thing the board can do, how- ever, is to recommend a cost-of-living bonus if the cost of living can be shown to have increased 5 per cent or more. This, then, ts the most that the work- ers can expect rom the “collective bar- gaining” which the government is so em- phatic in saying it is guaranteeing. It is undeniable that if the order is allowed to remain unchanged it will tend to de- stroy the trade-union movement, for what use are unions if their powers in collective bargaining are so limited? Why should workers join unions if they can- not use them to make effective demands for a greater share in the profits of industry? Unless the power of labor, organized and unorganized, forces the government to modify P.C, 7440, the way will have been opened for a Canadian “Labor Front” similar to Dr. Ley’s in Germany, in which labor’s vocabulary will be lim- ited to one word—Yes.” Canadian labor must say “No” now. Wages Down Is the establishment of a basic wage such as the 1926-29 level fair? Decidedly not! Already industrial production, as well as profits and dividend payments, have far exceeded the level of those years. B.C. serves as a fine example of industrial expansion. Taking 1936 as 100 per cent, production by June of 1940 had risen to 132.5 per cent, a rise of al- most one-third. And the future promises even greater expansion. Yet wages are to remain as they were in 1926-29. While wages are to be pegged, profits are not. As an example of how profits are soaring the following facts, recently made public, are interesting. Profits Up A summary of recent reports of Cana- dian industries is given below: Canadian Pacific Railway + $9,782,148 $20,145,056 Canada Steamships. 277,189 956,409 Kelvinator of Canada 84,537 165,620, Gypsum 165,068 208,041 Canadian General Blectrie .......... 2,150,026 2,308,019 This is the story all down the line. In view of these circumstances to enforce a ceiling on wages based upon the 1926-29 level can only be interpreted as a move to safeguard profits in industry for the industrialists and bankers at the expense of the economic conditions of labor, as can be seen in the following: Index Numbers of Wage Rates (1926—100) Industry 1929 1939 1940 Metal ........ - 104 107 117 Coal Mining ... 101 104.4 notav'’ble Common factory labor ........ 100.3 107.5 notavble Miscellaneous ...102.7 107.7 notav'l'ble Logging and Sawmills 1025 1075 1112 LBuilding U5 99.2 101.5 Wages Compared The above table compiled by the fed- eral department of labor serves to show hhow wages in this province will be af- fected. The Financial Post comments that “when complete figures for 1940 are available the 1940 wage rates, in all ex- cept the building and printing trades, will probably be above the 1926-29 stand- ard.” For workers in this province the fig- ures most significant are those for saw- milling and logging, coal mining, factory labor and metal trades, since these cover the majority of wage earners in this province. In each of these main cate- goties wages have risen above the 1926- 29 level. In the case of the woodworking industry, which is basic, a 10 per cent increase in wages is recorded. Therefore, since the level has now been set at the 1926-29 figure, what will hap- pen to the wages of the workers in these industries. The order, P.C, 7440, in deal- ing with the question, states: “Wage rates established and in effect at the date hereof ought not to be reduced by means of any principle herein set out.” The word ‘ought’ is used rather than the word must, implying no compulsion by the Order on the employer. Minister of Labor McLarty's latest Order-in-Council, P.C, 7440, meets with tremendous opposition throughout Can- ada and rightfully so, Canadian labor and Canadian people not only object to the principles of this Order but are dia- metrically opposed to government by de- cree which completely nullifies the demo- cratic form of government in favor of arbitrary dictatorial decisions emanating from star chamber sessions of the Cab- inet, the likeness of which can ‘only be found in countries subject to dictator- ships. Bonus — Sweat The basic formulae that there will be no wage increases but that bonuses will be given based on the cost of living is decidedly unfair. ‘The present increase in the cost of liv- ing is given as 7.19. (The basis of ar- riving at this figure is declared as un- fair by many authorities.) Wages are to be reviewed every three months and al- terations made on the basis of 5 per cent fluctuation. Unless the fluctuation reaches 5 per cent there is to be no change. The bonus plan is sheer deception, Ac- tually workers will never receive the full bonus since the cost of living in wartime does not go down but up. “As an example: a worker receives his 7.1 Per cent bonus—but in the following per- iod prices continue to rise as they inevi- tably will. Say this increase averages 4 per cent—the worker will then only actually be getting a bonus equal to 3.1 Per cent. This is true because no provi- sion is made to cover such increase be- tween periods of adjustment. H Furthermore organized labor has never considered a bonus as a just return for labor performed and never will, but as @ means used by unscrupulous employers to extract the maximum work at a min- imum wage with the right to rescind it at any time. The government's P.C, 7440 policy depends entirely upon the benevo- lence of the employer in granting such bonuses and only when there is an in- crease in the cost of living of 5 per cent or more, which is based upon the statis- tics published in the Labour Gazette and which the government itself admits are far from adequate, Highteen months have seen the cost of living rise approxi- mately 8 per cent, and the rise in the cost of living does not take into ac- count the deductions from the basic rate of pay such as the National War Defence tax, lower exemptions for income tax, ete. It would be a modest estimate to say that living costs have actually risen 15 per cent. No Bonuses Till Prices Rise 5% Since employers may use their own initiative in granting or refusing bon- uses and such bonuses may be granted only after a 5 per cent rise in the cost of living, the cost of living may increase by 4 per cent or even 4% per cent and bonus, Means Wage Cuts Actually the Order-in-Council gives Big Business the finest opportunity to carry through one of the most far-reaching wage cuts that have ever been imposed on a vast body of workers at any one time. How is that? The Order-in-Coun cil limits wages to the level of 1926-29 in which the average worker earned $600 per annum, while his productivity, through technological development, has increased tremendously and industrial profits have broken all Canadian records. Since the outbreak of war the average wage in- crease in the basic industries has been 10 per cent. : The government admits that in many cases wages have already risen above the 1929 rates. As the above table shows, as a result of the Order-in-Council, workers in the basic industries, organ- ized and unorganized, will have given up these gains and returned to the wage levels prevailing in their industry in the 1926-29 period. This has already been Ltd. Shipyard to the workers in Victoria. Present Gains Deducted But this is not all, any wage increase sincé the beginning of the war should be deducted from the 71 per cent cost of living bonus. In other words, work- ers engaged in industries that have en- joyed wage increases will actually re- ceive no bonuses for many months, At least until the amount gained by them since the war started is repaid to the employers. Actually, therefore, thous- ands of workers for Many months hence will be receiving less wages than prior to the war which is borne out in the following facts: (Continued on Page 6) workers would still be ineligible for a . proposed by the management of Yarrows ”