— Controls:

BY EMIL BJARNASON

Although the Anti-Inflation Act
makes a show of controlling both
wages and profits, its real prupose
and main thrust is against wages.

The public has been prepared, by
many years of propaganda, to®
believe that wage increases cause
inflation and therefore that wage
controls are the necessary means
of stopping inflation.

The theory is a false one.
Economists—capitalist or
socialist—know that rising wages
are never the cause of inflation, but
rather its consequence. During the
three worst years of inflation, from
1971 to 1974, wages rose by 48 per
cent, and corporation profits by 111
per cent, as reported by Statistics
Canada, the government agency
which keeps track of such things.

At first glance, a 48 per cent rise
in wages sounds high, but in fact,
much of this increase was due, not
to higher wages, but to more
people working. In fact, the
average wage, adjusted for the
cost of living increases, rose only
two per cent per year, while the
share of national income classes
changed as follows:

%in 1971 % in 1974
Wages and Salaries 72.9 70.5
Corporation Profits 12 3S SZ EO

Interest and Rent 5.4 6.5
Farm Income t 2.2 3.5

While the shares of profits, in-
terest and farm income rose
sharply, labor’s share fell, not-
withstanding the steady increase
in the number and proportion of
wage earners.

As long as the incomes. of
workers were rising less than
profits, the government of Canada
and the spokesmen of big business
were firmly against controls. But
in 1975, a change took place. The
working class fought back and
began to increase its share. From
the third quarter of 1974 to the
same period of 1975, wages and
salaries went up 13.7 per cent,
while corporation profits actually
fell by 6.2 per cent as the con-
sequence of economic crisis. It was
at this point that the government
suddenly discovered the necessity
of imposing controls. The purpose
is clear: the rate of profit must be
restored at the expense of wages.

slashing workers’ wage

pravce_-

Rather than freezing wages
outright, the government laid down,
guidelines which would permit all
workers to negotiate an eight per
cent increase in 1976, (dropping to
Six per cent in 1977, and four per
cent in 1978) to cover the expected
increase in living costs, plus two
per cent each year for produc-
tivity. However, workers who had
fallen behind living costs in the
previous two years. were to be
allowed up to two per cent catch-up
each year, making a total of 12 per
cent, while those who had gained
more than average would have the
excess deducted, reducing their
maximum to eight per cent. Thus,
the guideline for any one group
might be anything from eight per
cent to 12 per cent.

Further emphasizing the ap-
pearance of fairness, the
regulations provided that in
special circumstances where there
was an “historical relationship”’
between groups of workers, which
had been interupted by reason of
changes occurring before the
guidelines came into effect, the
Board could allow further in-
creases to restore that relation-
ship.

‘It sounds fair, and in fact, in the
early months of controls, the Board
went out of its way to give the
impression of reasonableness.
Where the historic relationships
had been demonstrated, they
allowed increases as high as 20 per
cent. But as time went on its ruling
began to harden and become more
arbitrary. Moreover, the
discretion exercised by the board
never took account of ex-

For the first victim of its hard-
nosed policy, the AIB selected the
maritime pulp and paper workers
employed by the notorious C. Ir-
ving. These workers in a
traditionally depressed area, and
employed by a particularly vicious
monopoly, were ordered to pay
back the increases which had been
freely negotiated on the pattern in
their industry. It was only the first
of a long series of similar
“rollbacks’’.

One of the more notorious, and
more scandalous, of the Board’s
decisions occurred in the B.C.
Railway case. In this case, with
five unions involved, the increases
were negotiated early in 1976. The
locomotive engineers, for exam-
ple, settled in January. At that
point, the Anti-Inflation Act did not
apply to B.C. Crown corporations
because the Socred government
was planning some price increases
which it did not care to submit to
the AIB. But, on June 27, with its
price increases in place, the
Bennett government proclaimed
the regulations for its Crown
corporations—retroactively. ‘The
AIB then proceeded to roll back the
B.C. Rail wage increases. The
engineers were ordered to pay
back $1,000 each.

Note the treachery involved. The
increase was legal when
negotiated. Moreover, it was
negotiated with an agency of the
provincial government. Six months
later, that same government, by
order-in-council, retroactively
rescinded the increase and
demanded its money back.

case of the Cassiar Asbestos
foremen. One of
stevedoring companies whose
foremen were first certified in
1974, Cassiar alone had signed a
two-year agreement with the
union. When the other foremen
were forced out on strike a few
months later, parliament
legislated them back to work with
an agreement as prescribed by the
Act. When the Cassiar agreement

expired in April of this year, the

eompany and the union agreed to
estend it to December 31, by
voluntarily accepting the terms of
the back-to-work act imposed on
the foremen employed by the other
13 companies. Incredible as_ it
seems, the AIB rolled this
agreement back.

Perhaps the most vicious of the
rollbacks, however, was applied to
13 cafeteria workers employed by
a regional college in Vancouver.
These workers, most of whom are
recent immigrants to Canada
handicapped by their lack of
knowledge of English and
Canadian law, were being paid
$2.40 per hour—less than the
minimum wage. In a _ first
agreement, the union insisted on a
substantial increase and
management, embarrassed by the
Situation, agreed to new wage
rates ranging upwards trom $4.50.
Union and management jointly
appealed to the Board to recognize
the special circumstances and
allow the increase. The Board,
even in these circumstances rolled
back the iricrease to the very
minimum the law permits.

The record of AIB: decisions is

fourteen:

misapplication of its own rules,
arising out of the tact that the rules
are administered by bureaucrats
with no understanding of collective
bargaining relationships. An
example of this is a recent ruling
affecting the Marineworkers
Union. The Board agreed that the
union had proved an_ historical
relationship~ with two other
agreements, but it brought down a
rollback decision which increased
the wage lag.

A particularly irritating aspect

of the Board’s performance is
timing. In politically sensitive
cases, the Board acts with great
dispatch. The B.C. Rail decision,
for example, was brought down in
a matter of days after the ap-
plications were submitted. In other
cases, it can take many months. In
such cases, the workers either
make do with an interim payment
of eight per cent, or are paid their
full increase and-left to wonder
whether they will have to pay it
back. ;
It is widely assumed that, at
Jeast, workers’ purchasing power
is maintained by the eight per cent
production factor, which in fact is
the total allowed increase in a
large percentage of cases. This
impression is reinforced by the
government’s contention that the
cost of living increase in the last 12
months is only 6.2 per cent. This is
a preposterous fallacy.

Even if we accept the Statistics
Canada consumer price index as
being accurate, the 6.2 per cent
merely says that the cost of living
in August 1976 was that much
higher than in August, 1975. This is
widely believed by experts to be a
temporary aberration due to
seasonally low food prices. Even
so, the average CPI from January
to August 1976 was 8.3 per cent
above the average for the same
months of 1975. In B.C. it was 10.3
per cent higher.

Moreover, the 6.2 per cent is a
national figure. The corresponding
figure in B.C. was 9.1 per cent.
Thus the eight per cent which
ostensibly gives the average
worker nearly two per cent more
than the cost of living increase, in
reality gives the B.C. worker one
per cent less.

But, that is not the end of the
injustice.’ When the government
announced the AIB rules, it said
that the basic production factor
would be eight per cent in 1976, and

Wage controls were brought in
with a great show of fairness

TOM
McEWEN

ctober 14, 1976 will be an historic day for Canadian

labor, for the more than two million organized workers
in the Canadian Labor Congress and for the countless
thousands of working men and women of this vast land of

Canada. :

On that day organized labor will tell the Trudeau
Liberal government of Canada, “‘stop the wanton robbery
of working people and put Canada back on the path of
sanity.”

October 14 will not be an ultimatum to the government, |

but it will be a warning that no government, the Trudeau
mish-mash included, can continue its wage-and-prices
robbery of the workers, either by direct or indirect
thievery, thatits Anti-Inflation Board rulings and dictates
are aimed exclusively at the wage-earners of Canada, and
that the people have had more than enough.

History repeats itself, even if we don’t always take heed
of the hard lessons she teaches. Over 40 years ago a
similar nationwide movement developed which
culminated inan ‘‘On-to-Ottawa”’ trek of tens of thousands
of Canadiah workers, demanding bread, work, and decent
wages. Then the national setup was of the Tory variety
with reaction in the saddle. But the onus was put on
working people the same as now — root, hog, or die, and
the powers that were then didn’t give a tinker’s damn
which.

PACIFIC TRIBUNE—OCTOBER 15, 1976—Page 2

traordinary exploitation

Another little publicized, but _
specially abs filled

d, ruling is the

The only provision they insisted upon (with ample police

clubs to enforce their ruling) was that the working force of

Canada should submit to hunger meekly and without
protest. This of course they refused to do, and thus an
historic lesson plus a brilliant example was left for later
generations of working people to follow.

Thus today the mighty Canadian Labor Congress with
its scores of powerful unions and supporters is not the
small, divided, inept and class divided organization of
half-a-century ago, but a powerful militant trade union
organization, counting its adherents in the millions, and
determining policies of work and wages with an ever-
growing strength and elan.

From the first it has decreed that the Trudeau anti-
inflation policies has been wrong, lopsided,
discriminatory, geared to assure that the rich will become
richer and that the working people, despite all the
seemingly high wages, shall inevitably become poorer.

AIB statistics in the hands of fast actors (which includes
the bulk of anti-inflation rulings) js in fact a ruse designed
to fool Canadian working people; to kid them into the idea
that “everyone” is paying the shot. The publicized income
returns of the big shots puts the kibosh on this fantasy.

Of late there has been grave threats emanating from
government sources anent emasculating the Canadian
Labor Congress, of clipping its wings, mainly of silencing
it thereby avoiding a major embarassment for all in-
flationist termites; or of drastically ‘reconstructing’ it so
that it may eventually become, if not an asset to reac-

tionary government, at least not a mighty instrument for

progress and sanity.

This is what the Trudeau government fears most of all
at this point in Canadian history; that October 14
demonstrations on an all-Canada scale led by organized

with examples of

the see WAGE CONTROLS pg. 3

labor will spell the end of inflation policies and the end of
their Liberal, Tory and Socred promoters at the same
time.

The flamboyant Trudeau should ‘“‘look to his moutons”
and frankly admit that his try at curing inflation by
decree or other diktat has been and is a howling scan-
dalous failure, highly detrimental to the working people of
Canada, but highly lucrative to the robber barons of
this country who never had it so good, as a bumper crop of
new millionaires and sundry other parasites of the human
species so ‘eloquently’ portray! It is long past the time
when these elements should be booted into obscurity
where they rightfully belong. *

On this historic day of October 14 all Canada should be

. on call, to stand by the powerful labor congress it has

forged to strengthen and advance the unions it has built
for just such a cause. Into the dustbin of history with the
AJB and all] that goes with it, including Pierre Trudeau
and assorted political company. To start afresh the
building of an economic and political order that will
withstand the storms of the times, with a final goodbye to
the rubbish left us in a make-believe anti-inflation duel.

 FRIBUNE

Editor — MAURICE RUSH
Assistant Editor SEAN GRIFFIN
Business and Circulation Manager — MIKE GIDORA

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