TABLE 5.-Indexes of wholesale prices in countries of the British Commonwealth, August 1939-November 1946

TABLE 6.-Indexes of wholesale prices in countries of Europe and the Middle East, August 1939-November 1946

Economic Policy

First Report of the Council of Economic Advisers'

THE Council of Economic Advisers-established in the Executive Office of the President by the Employment Act of 1946 2-expressed the view in the first annual report to the President that "the outlook for production and jobs is that it should be more than ordinarily favorable for a period of some years ahead." The report concluded: "In spite of certain conditions that might make for a dip in 1947, we believe that courageous and sensible action by those responsible for the administration of private business relations (including labor unions) can at least hold such a recession to moderate proportions if not avert it. Thereafter, it would seem that broad basic conditions suggest that it will be easy to have some years of high production, employment, and purchasing power without the display of any extraordinary economic statesmanship by leaders of industry, labor, farming, and finance. In those years, however, we should not be satisfied with a level of production and conditions of use which fail to produce favorable results for all sections of the country and all segments of the population. In those years, also, if foresight is not keen and action vigorous, the stage will be set for serious unemployment, underproduction, and want in the years that follow. It is our belief, however, that enough time is afforded in which wise policy and action on the part of labor, of management, of agriculture, and of finance, with a very carefully considered complementary role by Government, will not only raise the national prosperity to new high levels but will maintain those levels with a degree of stability which has not characterized the earlier exploratory and speculative decades of our industrial life. It is toward such a system of continuous study and collaborative guidance of the Nation's business on a basis of competitive private enterprise and economic democracy that the Employment Act of 1946 is directed.' Many conditions are favorable to great prosperity in 1947, the Council states. The Nation was not devastated by war. The existing

1946.

1 First Annual Report to the President. By Council of Economic Advisers. Washington, December Public, 304, 79th Congress. For a summary of the provisions of the Employment Act of 1946 see Monthly Labor Review, April 1946 (p. 586).

plant, labor force, and technology exceed anything known in the country's past, and funds are more than adequate for full use of the physical resources. Postponed demand and purchasing power are also potential sources of great activity. Yet, there is a possiblility of such mishandling of economic affairs that 1947 might be a year of curtailed production, irregular employment, and unsatisfactory purchasing power.

Mutual and workable adjustment of wage, price, cost, and profit relations by the voluntary bargaining of the parties involved will primarily determine the outlook for production and jobs in 1947. Legislative changes in business institutions will be minor in determining developments; either the statesmanship or the obstinacy of the men, particularly the leaders, who are active parties in business operation, will be the chief factor.

In the Council's opinion, the Government should not in 1947 undertake large-scale public works or subsidies to quicken employment or stimulate production. Management, labor, farmers, and financiers should deal with the impediments to prosperity in the near future. The Government must continue to bid against employers for labor to furnish facilities needed to aid veterans,' to protect civilian health, and to educate the oncoming generation. However, the conflicting factor thus injected into the general economic situation cannot be ignored. Other public expenditures have been curtailed so far as possible, both to avoid making a contribution to inflation and to insure that more will be obtained for each dollar spent at a later time.

A warning was given that plans should be made to use the country's productive resources after the pent-up demand for cars, houses, refrigerators, etc., is met, and the need for such goods is on a replacement basis. The real magnitude of the Nation's productive power must be recognized, and it should be utilized to produce for all the population the things that only the more favored had in the past.

Wage and Hour Statistics

Wage Structure of the Cigar Manufacturing Industry, January 19461

STRAIGHT-TIME hourly earnings of workers in the cigar industry averaged 73 cents in January 1946. Men earned 85 cents an hour; women, who accounted for over three-fourths of the total labor force, were paid 69 cents. Twenty-nine percent of the men and 8 percent of the women averaged $1.00 or more hourly.

The Middle Atlantic and Southeast States had over-all plant hourly averages of 73 and 75 cents, respectively. These regions, together, included 70 percent of the establishments having 8 or more employees and over three-fourths of the workers. The Pacific Coast, as in most industries, tended to show the highest hourly earnings.

Workers in union establishments and in the larger establishments and communities tended to earn more than others. The pay of those making long-filler cigars was usually greater than of those making short-fillers.

Paid vacations for plant workers were granted in half of the establishments and nonproduction bonuses were paid in one-fifth of the plants studied.2

Production Methods and the Labor Force

The productive capacity of the industry is concentrated to a great extent in plants utilizing cigar machines. However, hand methods of making cigars are still used in a large number of the smaller shops. In addition, many establishments producing short-filler cigars employ a combination of machine and hand methods in the cigar-making process. In machine plants, the proportion of the labor force engaged in the cigar-making operation was much smaller than in the plant group using hand methods only.

Women workers accounted for more than three-fourths of the total labor force in the cigar industry in January 1946. The proportion of

1 Prepared by Kermit B. Mohn from a field survey made under the direction of the Bureau's Regional Wage Analysts.

The study upon which this article is based was limited to establishments manufacturing cigars and employing at least 8 workers. Such plants were estimated as numbering 356, and as employing almost 45,000 workers in January 1946; 198 of the establishments having over 30,000 of the workers were included in this study. More detailed information on wage structure in the cigar industry will be available in bulletin form.