these goals provided such methods are democratic. To overcome their difficulties, the production of European nations must rise considerably above prewar levels. In important industries and areas, especially in Germany, production is lagging badly, owing mainly to a serious disintegration of economic life and a serious shortage of working capital. Capital equipment is needed to rehabilitate industry, and the internal stabilization of the currency is essential. The CEEC participating nations were not wholly realistic in their plans for capital expansion, the Harriman report adds. Europe must rebuild its capital plant if it is to become selfsupporting, but the process of capital formation imposes a severe strain on the country undertaking it. Capital-goods shipments to Europe will relieve some of the strain, but it seems likely that European programs of housing and capital development may have to be more gradual than proposed. It may also be necessary to modify the Paris program by shifting the amounts going to the individual countries. The revival of both Ruhr and British coal output is pivotal in getting western Europe back on its feet. This means that aid allotted to Germany may have to be greater than that originally set at Paris. The final determinant in the size of the aid program is the availability of commodities in this country. It is doubtful, in view of the poor corn crop and the 1948 winter wheat prospects, that the 15 million tons of grain exported in 1947 will be equalled in 1948. Steel and steel-making materials, especially scrap, are in particularly short supply in the United States. Coal exports at a high rate are possible, although they impose a strain on the transportation system. The shortage of petroleum, machinery, and industrial equipment is world-wide. Domestic demands for agricultural, mining, and heavy electrical machinery are beyond the capacity of the industries. The same is generally true for many basic raw materials. From the examination of particular markets for particular commodities it is concluded "that supply will be a limiting factor in many cases and that many European requirements cannot be met in full." Based on revised estimates of European imports and exports, the cost of the aid program to the United States would be about 5.75 billion dollars for the first year and between 12 and 17 billion dollars for the whole program. The United States will not bear the total cost of the European deficit. The International Bank, private sources, and other countries will meet part of the deficit. The cost to the United States of the program of aid for 1948 is only moderately more than the amounts recently spent in Europe, and what must be spent in Germany in any case. Beyond 1948, "Any estimates are altogether speculative." Any aid to Europe should be financed out of taxes, not out of borrowing. "The maintenance of a surplus in the United States Treasury is a necessity in this inflationary period." Measures to make available goods in short supply will be necessary and should be voluntary whenever possible. In other circumstances, the Government will require authority to set priorities and other controls on critically needed goods of limited availability. The administration of the program is of primary importance, and to insure unity of administration the committee recommends a new independent Government agency. the conditions of peace throughout the world, the President said. The prompt provision by the Congress for interim aid will be convincing proof to all nations of our sincere determination to support the freedomloving countries of western Europe in their endeavor to remain free and to become fully selfsupporting once again. The President's anti-inflation program consisted of three types of measures: (1) to relieve monetary pressures, (2) to channel scarce goods into the most essential uses, and (3) to deal directly with specific high prices. Of special interest to labor were the recommendations for dealing directly with specific high prices. 1 For further discussion of the President's anti-inflation program, see Monthly Labor Review, December 1947 (p. 635). Trends in Urban Wage Rates, September 19471 WAGE RATES in both manufacturing and nonmanufacturing industries in urban areas had, as a whole, risen as much as prices through September 1947, but showed no appreciable gain in "real" value over either wartime-peak or VJ-day levels. The "second round" of postwar wage increases had almost exactly offset advances in consumer prices that followed the lifting of price controls subsequent to the "first round" of wage raises. Average weekly earnings, in terms of "real" value, were below both wartime-peak and VJ-day levels, ! and approximately equal in value to the wages after the first round of postwar wage increases. Although wage increases have not been uniform, real earnings in September 1947 were still somewhat higher than in January 1941 for manufacturing industry as a whole. Prepared under the direction of Frances Jones Clerc and Eleanor K. Buschman of the Bureau's Wage Analysis Branch. This report summarizes the Bureau of Labor Statistics' latest study of the trend of wage rates in urban areas. For a more detailed description of the Bureau's measure of urban wage trends and the most recent of the previous surveys, see Monthly Labor Review, October 1944 (p. 684) and March 1947 C (0.359). The urban wage rate series will be replaced, beginning in 1948, with a new series of straight-time earnings based on direct reporting of straight-time earnings data by a constant sample of representative employers. A comprehensive analysis of the new series will appear in a forthcoming report. Total period (Jan. 1941-Sept. 1947). Prestabilization period (Jan. 1941-Oct. 1942). Stabilization period (Oct. 1942Aug. 1945). Weekly Hourly hourly earn ings 1 Oct. 1942-Apr. 1943. +9.2 +5.7 +3.2 Apr. 1943-Oct. 1943. +5.6 +4.7 +3.6 Oct. 1943-Apr. 1944. +1.5 +2.5 +3.0 +1.9 +.5 Apr. 1944-Oct. 1944. +3.1 +1.8 +2.1 +2.2 +.4 Oct. 1944-Apr. 1945 (VE day). Apr. 1945-Aug. 1945 (VJday). Oct. 1946-Apr. 1947. Apr. 1947-Sept. 1947. +3.9 +5.0 +4.7 +6.1 +5.5 +5.8 Postwar period (Aug. 1945-Sept. 1947). Aug. 1945-Oct. 1945. Oct. 1945-Feb. 1946 (Execu- wage adjustments, brought total postwar increases in manufacturing wage rates to an estimated 31 percent. In the 7-year period since the Nation's industry turned to production of goods for World War II, over-all wage rates advanced by approximately 74 percent (table 1). In contrast to the 31-percent rise in wage rates, gross weekly earnings and gross average hourly earnings increased only 21 and 22 percent above VJ-day levels. The postwar increases in rates were partially offset after VJ-day by an appreciable reduction in late-shift work at premium rates of pay, and by substantial reduction in the proportion of total manufacturing employment in the higher-wage durable goods industries.2 For several reasons, average earnings show a greater increase over January 1941 than the urban wage-rate index. The policy of paying premium rates for night-shift work is currently more widespread than in the prewar period, and premium rates for holiday, week-end, and overtime work are more liberal. The average earnings are also affected by some differences between the two periods in the proportionate distribution of employment among industries and areas with different wage levels. The relative stability of employment conditions during the past year has resulted in fairly uniform current movements of wage rates, straight-time earnings, gross average hourly earnings, and weekly earnings.3 Since the removal of wage controls, general wage changes have accounted for the major portion of the over-all change in manufacturing wage In contrast to the weekly and gross hourly earnings averages, the urban wage rate indexes are constructed by holding constant the individual industry employment from period to period. The weekly, gross hourly, and straight-time earnings series may lag behind the urban wage-rate series in reflecting wage-rate changes, owing to differences in the methods of collecting basic data. rates. Slight increases in rates above the amounts of the general wage changes have resulted from such factors as upward adjustments of rates on an individual-worker rather than on a plant-wide or departmental basis, intraplant adjustments in rate structure, and larger increases in minimum rates than in other rates. Stepped-up production also operated to raise the earned rates of incentive workers in some industries, but lowered production had the opposite effect in others. In fact, the average rate for time workers as a whole since the war ended has shown a slightly higher increase than the average for all workers. 6 Wage-rate Changes by Industry. Although wage increases have been granted in virtually all manufacturing industries since the end of the war, the amounts have by no means been uniform. tiles, among the lower-wage industries at VJ-day, experienced the greatest postwar wage increase in Tex ♦ General wage changes are defined as uniform changes that affect at one time at least 10 percent of an establishment's labor force. 5 For incentive workers, straight-time earnings of an occupational group in an establishment are substituted for occupational rates in constructing the urban wage rate index. The increase in rates of time workers between October 1945 and April 1947 amounted to 22.9 percent in comparison with a 22.1-percent increase for all workers. the manufacturing group-43.6 percent. Furniture and paper, likewise relatively low-wage industries, also increased rates by more than 40 percent. Chemicals, together with the highwage petroleum and printing industries, had postwar increases ranging from 35 to 40 percent. The tobacco and leather industries, both relatively low-wage, showed 30 to 33-percent advances. Apparel and food, both with wage levels below average, and the much higher-wage metal products, basic iron and steel, and rubber industries showed increases between 26 and 30 percent. Shipbuilding rates had increased by only 20 percent since VJ-day (table 2).7 TABLE 2.-Percent change in urban wage rates in manufacturing, by industry group, January 1941-September 1947 1 Percent change from Aug. Oct. Apr. Oct. Apr. | Aug. Jan. 1945 1945 1946 1946 1947 1945 1941 to to to to to to to Oct. Apr. Oct. Apr. Sept. Sept. Sept. 1945 1946 1946 1947 1947 1947 1947 +1.7 +9.8 +5.7 +5.2 +5.3+30.8 +74.4 +2.1 +7.8 +8.3 +6.9 +1.4 +29.2 +65.4 +5.5 +7.4 +8.9 +5.5 (2) +30.2 +69.9 +3.9 +12.3+10.6 +9.3 +1.8+43.6 +100.7 +1.6 +11.0 +4.9 +2.2 +4.1+25.9 +84.8 +3.7 +9.0+12.7 +5.5 +5.0 +41.1 +77.1 +1.9 +11.6 +8.6 +5.7 +7.9 +40.9 +78.5 +2.3 +9.1 +7.5+13.8 +2.3+39.7 +69.6 +3.9 +10.6 +6.9 +7.4 +5.2 +38.8 +76.8 +5.7 +12.0 +1.7 +9.0 +2.8+34.9 +60.9 +6 +15.2 +.7 +8.4 +1.8+28.7 +65.0 +1.7 +12.9 +8.9 +2.6 +3.8+33.2 +97.7 3+13.2+.34 +9.7 +1.5 +26.4+27.1 +2+10.0 +5.0+.7 +3.0+20.0 +22.8 +1.5 +8.9 +4.7 +4.2 +6.0+27.8 +71.1 Data for periods prior to April 1943 and between April and September 1947 are estimated. 7 Less than a tenth of 1 percent. April 1945 to April 1946. Partially estimated. !Data not available prior to October 1943. Data not available prior to April 1943. Except basic iron and steel and shipbuilding. Translating these percentages into the approximate number of cents per hour, the average gains in wage rates appear to have been 40 to 42 cents in the printing industry, about 37 cents for petroleum, and 33 to 34 cents for chemicals and paper. Textile's and furniture's high percentage increases are valued at 29 to 31 cents, about the same as the increase for rubber, metal products, and basic iron and steel. Shipbuilding's 20percent increase gave workers in that industry an The 12- to 15-cent general wage increase in the shipbuilding industry for 1947 had not yet appeared in the pay rolls of some companies by September. average 23-cent advance in hourly rates." The 26- to 30-percent advances in tobacco, food, and apparel convert to 21 to 24 cents. The 31percent average postwar wage-rate increase in manufacturing as a whole amounted to about 281⁄2 cents an hour, of which 17 cents had been granted by October 1946 and about 111⁄2 cents became effective between October 1946 and September 1947.8 9 These estimated cents-per-hour increases are very close to the typical general wage increases granted since VJ-day for some industries. For example, the dominant general wage increases granted in the textile industries aggregated, in September 1947, about 261⁄2 cents in southern cotton mills, 31 cents in northern cotton-textile mills, 30 cents in woolen mills, and about 28 cents in the full-fashioned hosiery industry. The estimated average rate increase for the group was about 31 cents. When the war ended, revisions in some of the textile industries' wage structure were in progress, as the result of National War Labor Board action, to permit both the raising of substandard wages and the revision of intraplant wage structure. These revisions had the effect of raising average wage rates in the textile industries by slightly more than the amounts of the general wage increases. The basic iron and steel and metal products industries generally, had general rate increases totaling 29 to 30 cents. The basic iron and steel industry has likewise been undergoing revision of intraplant rate structure, as well as some narrowing of regional wage differentials. Typical general wage increases in the rubber industry aggregated 30 cents. The over-all wage advances in the tobacco, apparel, leather, and food industries, on the other hand, are somewhat less than the typical general wage increases granted. It appears that, in these industries, the second round of postwar wage increases may not have been as widespread as the first round. The respective second-year advances of only 5.5, 6.4, 6.5, and 8.4 percent, were substantially less than typical second-round general 8 These cents-per-hour estimates are very rough approximations included for the purpose of giving the reader a general idea of the relative money values of the wage increases that have been expressed in terms of percent increase over former widely varying wage-rate levels. They should not be used as the basis for estimating industry average wages when accuracy within a few cents is important. Excluding the wage increases generally given in cotton-textile mills subsequent to this survey. wage increases granted in several segments of these industry groups, and well below the allmanufacturing average. Certain industry and area segments of these groups, therefore, received smaller wage increases, or none at all. The general wage increase in the shipbuilding industry for the first year, 18 cents, coincided with the average change in rates; but the secondyear increase, 12 to 15 cents, had not yet appeared in some of the pay rolls by September. Wage-rate Changes by Area. The present study yields information on wage trends in individual areas only through April 1947. Many of the more important wage settlements for the second TABLE 3.-Percent change in urban wage rates in manufacturing, by selected area April 1943-April 1947 calities, presented in table 3, do not reflect the full effect of the second postwar cycle of wage increases. Variations in the trends shown for different cities may be the result of the time lag in negotiations, as well as differences in industrial structure and in local wage policy. In the 28 cities for which wage series are maintained, the postwar increase 10 in wage rates ranged, in April 1947, from a high of 33.2 percent in Atlanta to a low of 15.1 percent in Detroit, where major wage contracts had not yet been negotiated at the date of the survey. Denver, Memphis, Kansas City, and St. Louis, like Atlanta, were well advanced in the negotiation of second-round wage contracts. Manufacturing in most of the cities that registered postwar increases as low as 20 percent was dominated by shipbuilding, aircraft, motor vehicles, or other industries that negotiated contracts later in the year. Wage Trends in Nonmanufacturing Industries The nonmanufacturing industries included in the urban wage rate series are wholesale and retail trade, finance, insurance and real estate, local utilities, and the service trades. The series for these industries date only from April 1943 and cover the ensuing 4-year period. The latest available data are for April 1947. In April 1947, wage rates in the nonmanufacturing industries as a whole showed approximately the same postwar increase as in the manufacturing industries for the same period," 24.3 percent as compared with 25.0 percent. Although the rates in nonmanufacturing industries lagged somewhat in the early postwar period, particularly between October 1945 and April 1946, they showed slightly larger increases than those for manufacturing over each half of the following year (table 4). Across-the-board or general increases, which made up almost nine-tenths of the total increase in manufacturing wage rates, accounted for only three-fifths of the total postwar increase in nonmanufacturing. Many nonmanufacturing estab 10 The data on wage trends for individual areas are not available for August 1945. April 1945 data are used, therefore, as the best available approximation of wage rates at the beginning of the postwar period, for the purpose of showing postwar wage trends by locality. The increase in wage rates between April and August 1945 for all manufacturing was only 0.7 percent. 11 The term "postwar period" as used in connection with nonmanufactur ing wage rates or comparisons with such rates in this report refers to the April 1945-April 1947 period. There are no available data for August 1945, or for the period after April 1947. |