Wage Control

December 6, 1950

Report Outline
Economic Controls in War Mobilization
Wage Control Experience in World War II
Effects of Wage Control on the Economy
Special Focus

Economic Controls in War Mobilization

Direct controls over wages and prices are in prospect for the near future if higher taxes and indirect controls over money and credit fail to restrain inflationary pressures of the mobilization program. Preliminary planning for wage control began on Nov. 28 with the first meeting of the new Wage Stabilization Board headed by Cyrus S. Ching, director of the Federal Mediation and Conciliation Service. Ching said at a press conference the following day that the board was still “in the process of exploring” but that the turn of events in Korea added urgency to its deliberations. Appointment of Michael V. DiSalle, mayor of Toledo, as Director of Price Stabilization on Nov. 30 completed the top level organization for imposition of controls. No advance announcement of a date on which they will go into effect is to be expected, but it is obvious that machinery for the enforcement of controls can hardly be put in working order before the end of the year.

Any scheme of wage control must operate under the Defense Production Act, which virtually compels simultaneous wage stabilization in any industry designated by the President for price stabilization. Denounced by the administration as unworkable, the provision tying price and wage controls together was inserted by Congress to prevent repetition of an alleged World War II practice of squeezing the profits of industry by controlling prices while permitting wages to rise. In his message of July 19 requesting emergency legislation, President Truman did not ask immediate powers over either wages or prices. Subsequently he urged that, if such authority was to be included in the law, it “be written in a form which allows wide discretion and flexibility as to the method and place and timing of application.”

Proliferating Controls in a Semi-War Economy

A steady rise in prices, the appearance of shortages of materials and of certain types of labor, and the development of a new round of wage increases already have forced the government to invoke some of the economic controls which Congress authorized on a stand-by basis. The consumers' price index of the Bureau of Labor Statistics rose from 170.2 on June 15, just before the Korean war, to a record high of 174.8 on Oct. 15. Average weekly earnings of production workers in manufacturing increased from $58.85 to $61.98 in the same period; average hourly earnings from $1,453 to $1,497.

ISSUE TRACKER for Related Reports
Cost of Living and Wages
Apr. 17, 2020  Inequality in America
Sep. 08, 2017  Universal Basic Income
Apr. 08, 2016  Future of the Middle Class
Apr. 18, 2014  Wealth and Inequality
Jan. 24, 2014  Minimum Wage
Jun. 19, 2009  Rethinking Retirement
Mar. 06, 2009  Middle-Class Squeeze
Mar. 14, 2008  Gender Pay Gap
Dec. 16, 2005  Minimum Wage
Sep. 27, 2002  Living-Wage Movement
Apr. 17, 1998  Income Inequality
Oct. 27, 1978  Wage-Price Controls
Jun. 16, 1978  Military Pay and Benefits
Mar. 23, 1966  Rising Cost of Living
Oct. 25, 1961  Price-Wage Restraints in National Emergencies
Jun. 21, 1961  Wage Policy in Recovery
Jun. 11, 1958  Prices and Wages in the Recession
Sep. 18, 1957  Control of Living Costs
Nov. 02, 1955  Wages, Prices, Profits
Jan. 26, 1954  Minimum Wage Raise
Jan. 02, 1954  Cost of Living
Jan. 21, 1953  Guaranteed Annual Wage
Dec. 17, 1952  Future of Price and Wage Controls
Nov. 19, 1951  Fringe Benefits and Wage Stabilization
Dec. 06, 1950  Wage Control
Jun. 13, 1949  Wages in Deflation
Jun. 04, 1947  Guarantees of Wages and Employment
Oct. 29, 1946  Decontrol of Wages
Dec. 01, 1945  Minimum Wages
Sep. 29, 1945  Wage Policy
Oct. 27, 1944  Wage Security
May 17, 1943  Incentive Wage Payments
Aug. 25, 1941  Prices, Profits, and Wage Control
Apr. 28, 1941  Wartime Changes in the Cost of Living
Sep. 21, 1940  Two Years of the Wage-Hour Law
Nov. 01, 1938  Industry and Labor Under the Wage-Hour Act
Jan. 20, 1938  Wage Rates and Workers' Incomes
Apr. 11, 1935  The Cost of Living in the United States
Sep. 01, 1930  Wages and the Cost of Living
May 24, 1930  The Anthracite Wage Agreement
Feb. 20, 1925  Measure of Recovery in Profits and Wages Since 1920–21 Depression