Wages in Deflation

Report Outline
Wage Rates and Current Business Activity
Current Developments in Wage Negotiations
Wage Trends in Past Depressions
Changes in the National Economy
Special Focus

Wage Rates and Current Business Activity

Recent Downturn in Postwar Business Boom

Major wage agreements are being negotiated this spring and summer in an atmosphere of declining business activity for the first time in more than a decade. Aware that many statistical indicators have turned downward and uncertain over business prospects during the life of new contracts, labor and management both are making substantial changes in objectives and in bargaining techniques. The order by John L. Lewis for a week of “stabilizing inaction” in the coal fields is a striking example. It came three days after southern operators had demanded modification of benefits to miners in negotiations for replacement of the bituminous contract which expires June 30.

The United Automobile Workers will shortly begin negotiations with the Ford Motor Company, after a 25-day strike at the River Rouge plant in May, to replace the contract which expires on July 15. By the end of August expiration dates will have been reached for important contracts in oil, shipping, textiles, and hosiery.

Procedures to reopen longer term contracts have recently been initiated in other important industries. U. S. Steel Corporation subsidiaries have agreed to begin discussions with the United Steelworkers in mid-June. C. I. O. electrical and rubber workers unions have announced their intention to invoke reopening clauses in agreements with Westinghouse, General Electric, U. S. Rubber, Firestone, and Goodyear. Additional contracts in the automobile, textile and other industries may be reopened if a new pattern of wage increases or other concessions is set in key negotiations. The outcome of the current negotiations and of those to be undertaken at later dates will be profoundly affected by the trend of business activity and employment in the immediate future.