Guarantees of Wages and Employment

June 4, 1947

Report Outline
New Demands for Employment Security
Benefits Claimed for Guaranteed Wage Plans
Experience with Guaranteed Wage Plans
Problems of Annual Wage Guarantee Plans

New Demands for Employment Security

Revival of Labor Pressure for Guarantees Wage

Fears of a business recession in 1947, followed at some future time by deep depression and widespread unemployment, have brought a revival in recent months of labor agitation for the guaranteed annual wage. Trade union interest in guaranteed wage plans first developed during the war when a sharp drop in employment was being predicted for this immediate postwar period. The movement was arrested in the autumn of 1944 by the refusal of the National War Labor Board to sanction the wage guarantee plan brought forward by the United Steelworkers. Continued high-level industrial activity after V-J Day led the unions to concentrate during the next 20 months on demands for increases in hourly wage rates to maintain wartime take-home pay. But with the specter of unemployment again being raised, the labor movement is turning once more to considerations of long-term security.

Advocates of the guaranteed annual wage say that its adoption would not only put the responsibility on employers to provide regular work through slack seasons of normal years, but would go a long way toward eliminating cyclical depressions by assuring the steady mass purchasing power needed to sustain continuous production. They concede, however, that year-round wage guarantees involve substantial risks for employers and that no one plan can be devised that will fit all cases. The stated aim of responsible labor leaders at present is to win management cooperation in studying the possibilities of annual wage guarantees in individual companies and industries.

Although the Steelworkers signed a new contract in April, 1947, which contained no mention of the annual wage, their agitation for the plan was apparently responsible for the institution of an elaborate independent study of annual wage proposals last year by the United States Steel Corporation. In December, the Cudahy Packing Company, one of the Big Four packers, promised the United Packinghouse Workers to look into their guarantee proposals and report back to the union. In addition, a number of small companies have actually put new guarantee plans into operation during the last six months.

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