48 Weeks a Year

"Sure, I get $7 a day, but I only work half the year."

The peacetime fear of layoffs, tarnishing the luster of high U.S. wage rates, has already begun to haunt thoughtful war workers looking ahead to war's end. But when C.I.O. United Steelworkers launched their attack on the Little Steel formula, their demand for a guaranteed annual wage was generally regarded as a mere bargaining point to be dropped when the going got rough. By last week, however, this anemic talking point had grown into a full-blooded issue. In a flurry of lusty Washington argument it had spread far beyond steel, threatened to involve most of U.S. industry.

Taxes and Workers. U.S. Steel's President Benjamin F. Fairless, opening the industry's counterattack before a WLB panel, last week asserted bluntly: "It is both impractical and illusory. ... The demand for such a revolutionary change becomes fantastic unless the eventual insolvency of the steel industry is desired."

Next day, the steel union's boss, Phil Murray, appeared before Senator James Murray's War Contracts subcommittee. He wanted Congressional blessing for the annual wage; not compulsory legislation, but approval of the principle. He felt that this would help unions get annual-wage provisions written into contracts, thus provide a safeguard against postwar layoffs. His argument: industry has been guaranteed postwar profits for two years through "carry-back and carry-forward" tax provisions. Farmers have been guaranteed 90% of parity prices on crops. Why should not workers be guaranteed a full year's pay for a full year's work?

Surprisingly Georgia's conservative Senator George, chairman of the Senate's Postwar Committee, substantially agreed. Said he: "What we have tried to do in our agricultural and tax legislation is quite capable of application to the worker. . . . I think we ought to lean toward something like the annual-wage idea."

But if U.S. industry were to institute an annual wage, how would it work? How could it be made to work?

Soap and Shoes. Almost everyone is for the annual wage -- in principle. But only a trifling number of U.S. companies have been brave enough to try it out in fact. One of the first was Procter & Gamble (Crisco, Ivory Soap), in 1923. Its socially conscious president, the late William Cooper Procter, felt that the "outstanding evil" of the U.S. economic system was its in ability to provide steady employment, decided to guarantee all P. & G. workers 48 weeks of work a year. Working out such a plan was not simple. Although the consumer demand for soap is year-around, wholesalers bought spasmodically and P. & G. production paralleled their orders. President Procter overhauled his sales system, leveled out production. The changes cost $3,000,000, but P. & G. has since repeatedly hailed the system as well worth it. Ten thousand employes in P. & G.'s main plants are now covered by it.

In 1935 Milwaukee's Nunn-Bush Shoe Company set up a "52-pay-checks-each-year" plan at small expense. It has been handsomely repaid in increased worker efficiency. It now boasts that its 900 workers covered by the plan are shoe indus try's highest paid. Estimated income (excluding supervisors) last year: $2,300.

Ham and Spam. Annual wage enthusiasts like best of all to point to the plan of Packer Jay C. Hormel (ham and Spam). Reason: the packing industry has one of the highest layoff records and some of the wildest production gyrations in U.S. industry. Production cannot be stabilized, because the livestock run is seasonal. Packer Hormel started in 1931 by guaranteeing 20 workers 52 weekly pay checks a year. In slack times, the workers were laid off; in rush times they worked overtime to make up. The plan hit plenty of snags; some workers even protested that it was just another form of the hated speedup. Packer Hormel extended it slowly, took nine years before all 2,673 in his main plant at Austin, Minn, were brought under it. Total now: 5,267. Meantime costs dropped, profits rose, and workers' weekly earnings went up from $23.04 in 1931 to $41.48 last year. Yearly wage: $2,299.

Pro & Con. Despite these successes, critics are quick to point out that they all occurred in consumer industries, where the market is far steadier and more predictable than in durable goods such as steel. Ham, shoes and soap can be warehoused during a buying slump. But steel, they contend, cannot, because it is produced to meet customers' specifications.

Stabilization of steel production can hardly be achieved in peacetime without an accompanying stabilization of steel-buyers' production. This, in turn, would require a change in U.S. buying habits. Most motorists, for example, buy their new cars in spring and fall. But the C.I.O. United Automobile Workers' shrewd vice president Walter Reuther had an answer for this one last week. He would set a base price, knock off a percentage if the customer bought his car in slack February, add on a percentage if he bought it in busy June. Cracked he: "If you want strawberries for Christmas dinner, you pay more, don't you?"

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