Wages-prices
and profit

— the
relationship

By WILLIAM STEWART

Last week we received a let-
ter from a somewhat irate read-
er from Winnipeg who accused
us of giving too much support
to trade unions, who in his opin-
ion are guilty, along with cor-
porations of exploiting the poor.

We received a similar letter
shortly before from a northern
Ontario farmer fulminating
against a column written by Alf
Dewhurst asserting that high
wages were not to blame for

high prices.

This line is being promoted
in many ways and today is fast
becoming a major tool of those
attacking the labor movement
from the “left.” It was the es-
sential burden of an attack lev-
eled by Douglas Smith, research
economist at the University of
Toronto Centre for Industrial
Relations. Speaking at an NDP
community conference in New
Toronto, he accused unions of
sharing with management in the
exploitation of the poor.

However, even since Mr. Smith
aimed his gun at labor, facts
have surfaced which convincing-
ly refute his claims. Since man-
agement will be undoubtedly
strumming this latest anti-labor
instrument in accompaniment to
the big wage negotiations shap-
ing up this year, it would be
useful to recapitulate these
facts.

Lest someone should suspect
the credentials of these follow-
ing figures because of the labor

bias of this paper we should in-
form you that they are taken
from no less a source then the
Wall Street Journal which re-
cently ran an editorial “The
Unions Aren't To Blame” and a
lead article written by Alfred
Malabre which showed that
many of the largest price in-
creases have come in areas
where workers are weakly or-
ganized, or not organized at all.

Here is what the Wall Street
Journal had to say:

“Only about 10 percent of
American workers in the service
trades, including maids, barbers,
medical personnel and theatre
attendants, are union members.
And among insurance company
personnel the rate of union or-
ganization amounts to only two
percent at most.

“Yet it is precisely in these
fields that prices in the U.S.
have soared during the past dec-
ade far above the average rate;
daily hospital service by 101
percent; movie admissions by 70
percent; maid service, 48 per-
cent; auto insurance rates, 44
percent; physicians’ fees, 38 per-
cent; men’s haircuts, 37 percent;
property insurance rates, 36 per-
cent.

“On the other hand, about 70
percent of U.S. transportation
equipment employees, including
auto workers, belong to unions.
Among appliance production
workers, the union membership
level is 50 percent. In the field
of drugs and chemical manufac-

turing it is about one third.

“In these relatively highly
unionized industries, however,
some prices have actually de-
clined in the past 10 years, ac-
cording to U.S. government sta-
tistics, Prices of radios in the
U.S. have gone down by 23 per-
cent, television sets and vacuum
cleaners by 20 percent, refrigera-
tors by 17 percent, washing ma-
chines by 14 percent, drugs by
three percent and new automo-
biles by two percent.

“Auto pay has risen sharply,
but not auto prices. Appliance
pay has climbed substantially,
but appliance prices have de-
clined markedly. At the same
time, insurance pay has increas,
ed relatively slowly, but insur-
ance rates have risen sharply.

“Mechanization and automa-
tion have had a great deal to do
with offsetting sharply higher
pay in some industries. While
auto pay has climbed sharply,
so has hourly output of the auto-
worker due to increasing plant
efficiency.

“On the whole, output per man
in manufacturing has increased
more than one-third in 10 years.

“The items that have added
sharply to the cost of living are
mortgage interest rates, proper-
ty taxes, auto registration and
golf green fees. In each instance
the influence of labor costs is at
best indirect.

“The boost in housing costs is
due largely io land costs, and not
to construction costs. Average
land costs have soared 70 per-
cent since 1958.”

Douglas Smith made specific
reference to the effect of the
recent Canadian automobile
wage parity agreement where
he said the effect would lead to
higher auto prices, A recent stu-
dy published by the United
Automobile Workers Union
shows that the average labor
cost worked into a U.S. auto-
mobile is $200! And it has been
further proved that most of the
increases in auto prices this
year are a result of infated com-
pany profits and not increased
labor costs which have been
more than absorbed in increased
productivity.

Another area of the trade

union movement which has come
under special attack, and where
wages are amongst the highest
anywhere is the building trades
industry. For years we have
been told that the high cost of
housing is attributable to the ri-
diculous wages being gunshot
out of the contractors by those
closed shop unions.

But what are the facts?

The Canadian construction in-
dustry commissioned H. Carl
Goldenberg and Professor John
Crispo to do a study into the
reasons for skyrocketing costs
of Canadian housing. The results
of that report show that on an
$18,000 house built in Ottawa,
labor (on site) amounted to only
13,8 percent of the cost.

The main villians in the piece
are exorbitant land costs, high
interest rates, services and ma-

terial costs. Also blamed is the-

instability in the industry which
building trades workers claim is
a result of the government using
the construction industrp as a
device to brake inflation or en-
courage growth rates as the
economy booms or sags.

In the United States a year
end summary of the economy
carried through by the U.S. News
and World Report concluded
that the real purchasing power
of American workers had gone
down in 1968, Here in Canada
government figures calculated
the increased wages for work-
ers under collective agreements
in 1968 was 6.9 percent, down
from 7.2 percent in 1967.

Profits for all industries in
Canada for the first half of 1968
were $2.370 million up 8.8 per-
cent from the same period in
1967, Wages for organized work-
ers went up 6.9 percent over the
entire year and 4.1 percent of
that was cancelled out by in-
creased living costs.

In the United States living
costs soared up 4.7 percent wip-
ing out wage gains for an esti-
mated 45 million American work-
ers while corporation profits
rose by 14 percent.

In Great Britain the Labor
government had introduced a
wage restraint policy and actu-
ally cancelled a penny off a
three pence wage increase nego-
tiated by the building trades.

However British banks rep
record profits for 1968. Barkel
Britain’s biggest bank repor
net earnings nearly 25 perg
higher than in 1967, while

tional Westminster Bank rep
ed after tax profits at 25,431)
pounds as against 20,348,009
1967 and Midland Bank lo
in with 14,415,000 pounds
pared to 11,748,000 pounds
year before.

Meanwhile Canadian co
clippers cut out $1,416 mill
up 67.5 million from last

These figures tell their
story. The lies which are
spread by the Douglas Smi
and others are designed
smooth over the impact of.
report of the Canadian E
mic Council which stated
the labor movement has
saying for years. There is
down poverty in Canada a
ing harshly at least one q
of our population and stretch
into the homes of more ih
of our population.

The responsibility for this
within the very system of cq
talism and the giant anti-hum
corporations it spawns. It
with the Federal and Proving
governments who operate

and monetary policies des
to assist the accumulation
massive profits by these co
tions and perpetuate and i
tutionalize poverty and
amongst masses of Canadi

Labor has a responsibility
be sure. Its responsibility is}
fight for every penny it @
wring from these corporation
To increase its efforts to or;
ize the unorganized so that
fight can be waged on an
broader front. It has a res
bility to conduct a more
getic struggle for social
democratic reforms in the i
est of all Canadians.

But the wailings of the Smi
and the growing chorus of
styled labor experts will not ha
They are not concerned abo
assisting in this task but to
contrary are trying to di
labor amongst itself so that
little men with the scissors Wi
wring even more from the swe
of the working man when divi
end time comes up.

alf dewhurst

Tab

—

e the Woods report

What is the government up
to? It is high time that organized
labor put this question squarely
to the government. There can
be no doubt that the federal
labor department is planning new
labor laws, But what kind of
laws? The answer to this ques-
tion will have an important bear-
ing on the size of the wage
packets of more than six million
wage and salary workers.

To the end of preparing new
labor laws the government com-
missioned a task force under the
chairmanship of Dean Woods of
McGill University to make a
study of labor-management re-
lations. This study was com-
pleted last Fall after two years
of research and examination.

Trade union leaders have been
informed by the Department of
Labor that its experts are re-
viewing federal labor laws on
the basis of the Task Force Re-
port. NEWS, a Labor Depart-
ment bulletin, published the Mi-
nister’s statement in the House
of Commons when he presented
the Department’s estimates on
November 21, 1968 in which he
commented on matters of De-
partment work.

In commenting on labor legis-
lation Mr. Mackasey said “There'

is much activity these days in
the Department Mr. Chairman.
In anticipation of the Woods
Task Force Report, officials of
the Department are reviewing
existing legislation, preparing
new laws (my. emphasis) and
evaluating new concepts, in
order that we may take full ad-
vantage of this Report and the
enlightened approach I hope it
will have to the labor problems
of today.”

NEWS is circulated by the La-
bor Department to trade union
officers, But hardly a comment
was heard from these officers in
reply to the Minister’s state-
ment of intent to Parliament.
Perhaps trade union officials are
playing it cool. Or, maybe they
have been taken in by Mr.
Mackasey’s “new concepts”
theory of labor-management re-
lations.

In his statement to the House
the Labor Minister outlined his
“new concepts” in these words,
“It is no longer sufficient to re-
act to situations. We must ini-
tiate and encourage a much
greater degree of communication
between labor and manage-
ment. My department must make
labor and management appre-
ciate the fact that they are not
natural enemies; but’ ‘natural

PACIFIC TRIBUNE—-JANUARY 31, 1969—Page-4

partners (my emphasis) .. . I
believe Mr, Chairman that my
Department must lead; it must
encourage labor and manage-
ment to cooperate more fully.”

Surely, top trade union offi-
cials can see the strategy in la-
bor management relations being
unfolded in the federal govern-
ment sphere. It is a two-side stra-
tegy based on Mr. Mackasey’s
“new concepts”. On the one
hand, there is growing govern-
ment intervention into the bar-
gaining process based on top
level negotiations between
union - management - govern-
ment officials bargaining over
wages, hours and working con-
ditions for the workers without
the participation of the workers
—as in the case of the two sets
of negotiations recently conclud-
ed for non-op railway workers.

The other side of the strategy
consists of labor legislation to
limit or ban strikes, empower-
ing the government to proclaim
certain industries as being “es-
sential” and, on the basis of this,
ruling that disputes between la-
bor and management be settled
by compulsory arbitration.

A special feature of this stra-
tegy is the efforts of the gov-
ernment’ to secure the assistance

of union leaders in putting it
into effect. Firstly, by winning
leaders for the concept of labor-
management “partnership” and
its accompanying theory of
labor-management “peace” in
contractual relations. Secondly,
by seeking out union leaders
willing to serve on government
anti-labor Mediation Boards.

Government has achieved
some successes in thes* two
directions, There have been

some defections from the labor
side in the past period of time
as witness those in B.C. for
government service under the
anti-labor Bill 33. The latest con-
vert to the “‘partners” theory is
Regional President Moore of the
International Woodworkers of
America who has broken ranks
in respect to the B.C. Federation
of Labor’s boycott of B.C.’s
Mediation Commission (Bill 33).

Such defections from labor’s
side serve well the cause of the
employers for they weaken labor
ranks by sowing confusion and
creating a credibility gap be-
tween the ranks and leadership.

If there are some union lead-

‘ ers who suffer from the illusion

that labor and management are
“partners” in a common enter-
prise they should go back to the

bench and feel the effects of th

“partnership” on_ their
backs, And, if they should
suffer under the illusion thi
government is another “partné
of labor’s, Prime Minister TW
deau’s recent comment on Wo0
Task Force Report should he
to dispel that notion.

The Prime Minister suggest
in the House of Commons thi
perhaps the government wo
not table the Woods Report
the House. He told the Commot
that the Report will be read if
the government discussed by!
and then determined whether!
is in the public interest to tall
it in the House. But in the me@
time the Department of Labor!
preparing new laws based ont
Report’s conclusions, This in?
cates how much this other “pat
ner” of labor intends to take #
bor into its confidence.

It is clear enough what labot!
answer must be. Organized lab!
must demand the tabling of t#
Woods Report in the House. ¥
bor and the public must
the contents of that Report!
order that they can read it,
cuss it, and decide whether it
in the public interest to im
ment its conclusions in the
of the land. ret