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Richer Get Richer, The Workers Get Shafted: Wage-Price "Controls"

By VVAW

Jimmy Carter recently announced a new government program of voluntary wage-price guidelines, calling it "Phase 2" in the attack on inflation. It was about 90% pep talk delivered solemnly and seriously to underline the gravity of the situation (something that people who have to buy food or pay bills have known for some time). The theory seems to be that by calling for "national unity" and by saying that "we're all in this together," then the companies will hold down price rises on their products, workers will ask for smaller pay raises (the now famous 7%) and as a result, inflation will slow down and the country will recover from the latest in its series of economic problems.

That's the theory. It was tried out before when then President Ford blundered out his WIN (Whip Inflation Now) program—which did nothing except make a lot of money for some button manufacturer who sold millions of WIN buttons. Contrary to the "theory," the reality is much different. Wage increases are not the cause of inflation, as Carter and his economic genies would have us believe. In fact, demands for better pay on the part of workers are nothing but an attempt to catch up. Even government statistics reflect the fact that, since 1972, real wages (which means buying power—how many hours of work it takes to buy a pound of hamburger or whatever else) have gone down. So how are workers' increased paychecks the cause of inflation?

Barry Bosworth, Director of the government's Council of Wage and Price Stability, admits that under Carter's policies, workers can expect no increase in real wages "for several years." Every time there's a problem in the economy, some government expert is around to tell us that we'll have to "tighten our belts," "bit the bullet," and "pull together." For millions of workers, just being able to stay even, to be able to afford the same things people could buy a couple of years ago, would be a real step forward.

It always seems to work out that when there's a crisis in this country, it's the majority of people who have to tighten the belt; meanwhile, the rich and their corporations make a man rush for fat bellies and fatter wallets. How often have we seen the corporate bosses moaning and whining because of their workers' winning a 10% wage increase while, out of the other side of their mouths, they're using the increase to justify their raising prices by 20%? When the price of a hamburger goes up by 50 cents a pound (as is now being predicted for 1979) you can bet it's not the farmers who are going to cash in—it's going to be the giant meat-packing houses, and not the workers in those industries, either.

Inflation isn't the only way they squeeze the last nickel out of us, either. Veterans are all too familiar with some of the other ways. Long waits at the V.A. hospital because the staff is too small; disability checks you have to fight like hell to get and then can't possibly survive on; lack of qualified doctors in the hospitals. These and hundreds of other social services suffer in this inflated economy because money goes to serve the rich for oil depletion allowances, for inflated military expenditures (and profits for the corporations which manufacture the materials), and more.

Inflation comes because prices are raised; prices are raised because companies need constantly to increase their rate of profit in order to stay in business. Even staying even isn't good enough—unless the corporation can make more and more profit on each dollar they have to invest, some other corporation is likely to snatch away the business, and the money needed for capital investment is likely to go somewhere else. Instead of each worker producing 50% more than his pay, it has to go up—55%, 60%. One result is the speed-ups and the simultaneous layoffs which have become so familiar to hundreds of thousands of factory workers.

There are other contributing factors to high inflation. The cost of the way in Vietnam is coming back to haunt us. The deficit spending by the government contributes. The fact that the U.S. can no longer impose its will on the rest of the world—as in the case of oil reserves, for instance—is important. Obsolete machinery, a situation faced by many U.S. firms, cases less to be produced for the amount of money invested (as well as bringing speed-up and layoffs to save money).

None of these reasons for inflation have anything to do with workers, although it is true that workers who refuse to be worked to death because of speedups do contribute—as they damn well should. Nevertheless, economic experts and spokesmen for the country's rulers still try to heap the blame on workers' "unreasonable" wage demands. Lurking behind Carter's "voluntary" Phase 2 guidelines is the threat that if people do not adhere to the 7% wage increase figure, the government will have to institute wage and price controls. And this is the course of action being pushed by George Meany, supposed champion of America's workers, whose last day of productive labor as a plumber was in the 1920's and who now, no doubt, has to call in help to unplug his toilet.

In fact, wage and price controls have been used before. Nixon imposed them in the early 70's, and they were half successful: the controls on wages held, but prices increased and inflation continued. Workers got screwed again while the big bosses could sit back and gloat. And they want to do it to us once again.

Workers aren't to blame for inflation and workers aren't about to pay for it. The government would love to be in the situation where the people are "thankful" for a crumb here and there. Vets were supposed to be grateful, two years ago, when the GI Bill increased by a miserly 7%, somewhere close to one third of the cost of inflation since the last time the GI Bill was boosted. Postal workers are supposed to show their gratitude to the postal service by working all the harder in return for their recent contract which gives them somewhere around 20% increases in wages over the next three years—while inflation is running at 10-11% and may well start galloping beyond that figure at any moment.

With some of the various fringe benefits, postal workers made some gains in the 1978 contract. Coal miners, as a result of a record-setting strike, made important contract gains. Cost-of-living allowances were an import part of contract struggles as workers fought to get some way to deal with inflation.

In 1979 there are many more vital contracts up to be renegotiated. Auto, trucking, electrical, construction, rubber, meat packing and other industries will find many workers who are not about to be sweet-talked or bamboozled into shouldering the burden of inflation. 1979 may well be a year when the workers who are supposed to bear the brunt of "Phase 2" or whatever other program Carter and his cronies trump up, will announce that they've had enough of belt tightening—it's time to fight.