apolis, Houston, St. Paul, and Charleston, S. C. In general, and as expected, increases since the outbreak of war have been greatest in war production centers. CLOTHING PRICES The most important changes in clothing markets since May 1942 have been in quality, quantity, and variety rather than in price. In the 12 months since May 1942, retail clothing prices rose only 1%% percent; the greater part of this advance occurred for spring lines introduced in March and April at higher prices allowed under an OPA formula established for the industry. The commodities primarily affected were men's topcoats and women's sport coats and wash dresses. There were also some advances for men's work shirts, for shoe repairs, and for rayon hosiery in some cities. In addition, the withdrawal of articles in lower price lines, which obliged consumers to buy higher-priced products, has added substantially to consumers' costs. The most significant changes, however already widespread and growing progressively more important-have been in the variety and construction of clothing. In the majority of cases these changes are due to the growing need for economizing in the use of available supplies, as a result of the rapid diversion of plant capacity and of certain types of fibers and fabrics to military use. This diversion has been especially great for commodities such as long-staple cotton and combed yarn, but has been substantial for nearly all materials. 1942 more than one-third of total textile production went to military, Lend-Lease, and other foreign requirements. The War Production Board currently estimates that the civilian supply of all textiles in 1943 will be about 10 percent below that in 1942 with varying deductions for different fabrics. In As a result of these shortages, conservation measures have been established to economize either in the use of materials or in the number of styles produced for products such as men's suits, shirts, underwear, men's and women's lounging robes, hosiery, pajamas, and women's dresses and coats. Most of these measures have been established by specific order of the War Production Board although some have been undertaken voluntarily by manufacturers. Their effects vary widely and thus have the result, on the one hand, of reducing the number of styles for women's dresses by 50 percent, and on the other of eliminating cuffs from men's trousers, reducing the length of men's shirts, etc. Along the same line was the WPB order limiting the style, variety, and color of men's and women's shoes. In addition, there have been changes of another type concerning which it is difficult to obtain reliable or comprehensive information. These changes result from the cheapening of articles by some manufacturers who thereby reduce costs and in effect evade OPA maximumprice orders, even though abstaining from any overt revision in selling price. Such changes are generally more frequent for articles such as men's shirts and women's dresses and less frequent for more standardized articles such as work clothing. The precise extent of these changes is at present impossible to determine.15 14 OWI Release No. WPB-2383, January 20, 1943. 18 See Wartime Changes in Consumer Goods, by Laura Brown Webb, and Indirect Price Increases, by Melville J. Ulmer, in Monthly Labor Review, November 1942. PRICES OF HOUSEFURNISHINGS As in the case of clothing, moderate price increases for houscfurnishings have been coupled with widespread changes in the quantity and quality of materials available. Prices of standard housefurnishings, collected by the Bureau of Labor Statistics, rose 2 percent as a group from May 1942 to May 1943, as a result of increases for bed sheets, pillow cases, cotton towels, living-room furniture, gas stoves, mattresses, and other articles such as brooms. The disappearance of lower-priced lines has also been an important factor in some of these advances. Changes in supply, however, have been more drastic. Durable goods as a group are all but off the market. During 1942, production was halted by War Production Board order for vacuum cleaners, electric refrigerators, radios, phonographs, sewing machines, and many similar products. Before the end of the year stocks on hand for many of these products were exhausted or nearly so and in some cases, such as electric refrigerators, sale was restricted. In the case of furniture, production for 1943 is estimated at from one-third to one-half below that of 1942 16 and reductions are particularly severe for the cheaper grades. Shortage of materials has resulted in even greater reductions in output of tableware. For textile housefurnishings, changes in construction and in total quantities produced have also been widespread. Thus, a WPB order in March 1942 prohibited the use of more than 80 percent wool in blankets. Since mid-1942 the use of coarse wool in carpets has been limited to 25 percent of the amount consumed in 1941.18 Carpet and rug mills have reduced the number of grades produced by 80 percent. Other products, such as draperies and tablecloths have also been limited in quantity and variety of style. PRICES OF FUELS, ELECTRICITY, AND ICE Despite severe shortages, price increases for fuel have been generally moderate. Between May 1942 and May 1943 the average increase for all types of fuel was 2% percent. The greater part of this advance occurred as the result of upward revisions in maximum prices for coal and fuel oil allowed by the OPA in order to compensate dealers for increased costs of transportation. The supply of fuels (except gasoline) promises to be somewhat better in the immediate future. During the past winter the use of fuel oil for heating was cut to 60 percent of normal in the East,20 and there were somewhat smaller reductions in other parts of the country. The conversion of many homes and business plants from fuel oil to coal caused a tight situation in anthracite following the cold spell in December, particularly on the East Coast. Estimate based on U. S. Department of Commerce and Federal Reserve Board data, and Business Week, January 23, 1943. This order was later revised to permit a maximum of 65 percent new wool plus some additional amounts of reprocessed wool. WPB Conservation Order M-73. 18 WPB Conservation Order M-73, as amended June 1, 1942. New York Times, December 18, 1912. "OWI Release No. OPA-2190, Apri 4, 1943. COST OF MISCELLANEOUS GOODS AND SERVICES In the case of miscellaneous goods and services, both the supply and price have become problems of increasing importance. Thus especially in war production areas, medical services are overburdened with between 40,000 and 45,000 physicians (about one-third of those formerly in active full-time practice) now in the armed forces.21 The shortage of low-wage labor has resulted in curtailing laundry services in almost all areas. Shoe rationing has increased the demand for shoe repairs, while the supply is limited not only by the labor available but by the shortage of some materials. The need for critical materials for other purposes has led to limitations on the installation of new telephone equipment. Even the use of paper by newspapers and magazines has been reduced 10 percent below 1942 consumption by WPB order.22 The increase in costs of miscellaneous goods and services between May 1942 and May 1943 amounted to almost 4 percent, the greater part of which occurred in recent months. Increases have been especially great for those services which are still exempt from OPA control. such as those supplied by hospitals and physicians, beauty parlors and barber shops, and movies. RENTS In the control of rents, the OPA has achieved its most outstanding success. Between March 1942 and March 1943, the latest date for which statistics are available, the average cost of rents in family houses and apartments in the 34 large cities included in Bureau of Labor Statistics surveys declined by about 1 percent. These reductions were the result of OPA orders which "rolled back" rents to the charges prevailing in early 1942, or in some cases in early 1941. The importance of rent in the budget of the average wage earner's family is second only to food and ordinarily accounts for nearly onefifth of total expenditures. Of course, the supply of living quarters in many crowded war production cities still remains a formidable problem. Its solution is complicated by the pressing need in direct military production for many of the materials which ordinarily would go into new construction. These materials are now being carefully allocated for essential civilian use. Holding the Line Against Increases in Living Costs In an Executive order issued on April 8, 1943, the President called upon administrative agencies of the Government to cooperate in "holding the line" against the rise in the cost of living. This document directed administrative agencies (1) to fix maximum prices for all agricultural commodities "affecting the cost of living" and to prohibit further advances in these maxima "except to the minimum extent required by law"; (2) to hold wages and salaries at levels set 21 OWI Release No. OWI-1488, March 29, 1943. by the "Little Steel" formula,23 except where necessary to correct substandards of living; (3) to prevent transfers of workers to better-paying jobs unless "the change of employment would aid in the effective prosecution of the war"; and (4) to limit or reduce the rates of common carriers or other public utilities. At the same time, in an accompanying "statement on inflation," the President declared that Congress was preparing fiscal legislation "to reduce and hold in check" excess purchasing power. In the few weeks since this order was issued, initial steps have been taken toward achieving the objectives outlined. Many issues concerning the nature of the policies to be adopted, however, still remain undecided as this article goes to press. The extent of control over agricultural prices, the use of subsidies to reduce prices paid by consumers, and the form and size of new taxes or other fiscal measures to be enacted are still among the unsettled issues. Obviously, the degree of success to be achieved in controlling the cost of living in the immediate future will depend in large part upon these decisions. 23 The "Little Steel" formula adopted by the War Labor Board limits wages to a level 15 percent above that prevailing on January 1, 1941; i. e., an amount equivalent to the rise in the cost of living between January 1941 and May 1942. Bureau of Labor Statistics Cost-of-Living Index in Wartime1 IN MARCH 1943, the Bureau of Labor Statistics revised its index of the cost of food to take account of current food shortages and food rationing. The weights used in combining changes in food prices from February to March into indexes of food costs were revised to correspond as closely as possible to the quantities of foods which moderateincome families are buying in 1943 in the 56 large cities covered by these indexes. The March index for each city was linked to the index previously published for February to form a continuous series. With this revision, the Bureau continues its policy of making its cost-of-living index represent each month changes in the costs of the goods and services which wage earners and clerical workers can actually buy in the war years. The Bureau's living-cost index has always taken account of changes in the purchasing habits of city families at the income levels to which the index applies. Between the time when! the index was first calculated in 1919 and the initiation of the new index as of March 1935, some of the goods first included in the computations disappeared from the market. High button shoes were succeeded by oxfords; pajamas replaced nightshirts; dining-room suites replaced dining tables, buffet, and chairs sold separately. The old articles were taken out of the index and the new articles were linked in-but between any two succeeding months, the index always compares the cost of the same articles with the same weights. As of March 1935 a new standard of living was linked into the costof-living index, which represented all the changes that had occurred in the purchases of employed wage earners and clerical workers since 1919 when the index was first calculated.2 In the last 19 months the goods and services produced for civilians in the United States have undergone more drastic changes than occurred in the entire period from 1919 to 1935. The level of living of the people of the country rose sharply in 1941 and was lowered in 1942. However, changes in the plane of living are quite different from changes in the cost of living, and it is the cost of living which the i Bureau's index measures.3 The changes in goods which civilians could buy have occurred rapidly, depending on retailers' stocks at different times in different parts of the country. It has not always been possible, nor would it have been desirable (as it was when the Bureau produced a new costof-living index as of March 1935), to link in a new bill of goods and services at any one date. Adjustments in the index to the new conditions, therefore, have been made from month to month. Changes in Indexes of Costs of Clothing, Housefurnishings, and Miscellaneous Items Rationing. Under the first major rationing order which applied to civilians in the United States, new automobiles were withdrawn from the market for an indefinite period. The second order provided that 1 Prepared in the Bureau's Cost of Living Division, by Faith M. Williams. * See Bureau of Labor Statistics Bulletin No. 699: Changes in Cost of Living in Large Cities in the United States, 1913-41. *For changes in the plane of living of urban families between 1941 and the first quarter of 1942, see the Bureau's study of Spending and Saving in Wartime (Bulls. Nos. 723 and 724). |