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My question was about the increases in cost to the steel industry prior to July 26, 1951, which Governor Arnall said entitled the steel industry to an increase of approximately $3 a ton and I wanted to know if that included the wage increase the workers received in December 1950?
Mr. ARNALL. The answer to the question is that it does so include it.
Senator Douglas. The increases of costs and raw materials up to that date.
Mr. ARNALL. Up to July 26, 1951.
Senator Douglas. In the statement of the steel industry that they are entitled to a $12 increase, do they include that $3 increase in the $12?
Mr. ARNALL. Yes, sir.
Senator Douglas. So this $12 is made up of a claim of $3 under the Capehart formula and approximately $6 alleged claims if the recommendations of the Wage Stabilization Board go through?
Mr. ARNALL. Yes.
In my talk with Mr. Fairless, I asked him if the steel corporations should or would absorb some of the cost increase. He said “Yes.”
So there was never any disposition on his part not to absorb part of the cost increase.
Where you run into trouble is not in his stating that he will absorb it or in agreeing on the principle, but the issue comes when you get into figures, you see, as to whether the figures show they are absorbing or not absorbing.
Mr. Putnam. Everybody admits the total package as of next January will cost about $6 a ton in added labor cost, but they also say there is a $6 material cost that they have to allow for. They haven't yet asked for the Capehart increase which will amount to close to $3. We say it is not historically true that a $6 material cost increase would follow. If it should it would not be in the immediate future. It wasn't true under price control during the last war. We say that when the $6 material cost develops, if it should, we will be glad to look at the figures at that time.
Senator CAPEHART. How much are you prepared to allow the steel, industry as an increase.
Mr. ARNALL. We are ready to give them the Capehart amendment and such other price increases as they are entitled to under our standards. But when we apply those standards to the steel companies, we find that they are not entitled to any additional price increase.
The CHAIRMAN. Now, Senator Douglas says it is agreeable with him so we will recess until 2:30 and Senator Douglas will be first; Senator Moody, second; and Senator Benton, third. Then we will come back to Senator Capehart who has some questions.
Would 3 o'clock suit you gentlemen?
Mr. PUTNAM. The President's Mobilization Advisory Board is meeting this afternoon to discuss steel, and they asked me to be there at 2 o'clock. I think most of your questions are directed primarily at Governor Arnall and Dr. Feinsinger, and I hope it will be all right if I go to that. The CHAIRMAN. What is the wish of the committee? Senator BENTON. How long will your meeting take?
Mr. Putnam. They are going to meet at 2 and the President is to join them at 3. I can't tell you exactly, Senator.
The CHAIRMAN. I don't think the committee would desire to keep you from the President's conference.
Mr. Putnam. I thought if we continued here until 1 p. m., I could be through
The CHAIRMAN. There are a good many questions to be asked.
Senator CAPEHART. Could I ask unanimous consent to ask him just one question.
Mr. PUTNAM. I don't want to duck questions, at all.
The Chairman. Without objection, any Senator here who desires to ask a specific question of Mr. Putnam may do so and then we will recess until 2:30 at which time we will take up the question of what we are going to do, including housing legislation. Senator Douglas will be first, Senator Benton will be second and Senator Moody, third, and then the others will come back again.
Senator ROBERTSON. Is it understood that until we can say that this record is in correct form and have it printed, nobody is going to discuss the testimony?
The CHAIRMAN. I am not going to do it, that is the understanding.
Senator Moody. Providing the testimony is given out at the earliest possible moment.
The CHAIRMAN. Well, we will have it printed tonight. It will be here in the morning.
Could you send down these things to be put in the record by night? It has to go to the Printing Office by 12 o'clock.
By the way, the meeting this afternoon will be in room F-39 in the Capitol.
Senator CAPEHART. I hold in my hand a chart that says "Changes in average hourly earnings, Korea (June 1950), to December 1951. Source, United States Bureau of Labor Statistics."
That shows that the electrical machine workers have had a 20.3cents-an-hour increase; automobiles, 19.9; meat packing, 24.4; rubber products, 22; and 'steel, 20.9. You will note that they are all about even, with meat packing ahead and rubber products a little ahead, and auto 1 cent behind steel.
It also shows that if you give this proposed recommended increase, which it says here is $0.25 per hour, that it brings steel up to 45.9. That is since June 1950.
Now, my question is, Is that the truth?
Mr. PUTNAM. We want to make sure we are talking about figures that mean the same thing. Those are average hourly earnings which include overtime. If an industry is working on short time, it looks
If it is overtime, it looks very high. They are quite different from wage rates. They are not the same thing as wage rates, at all.
Senator CAPEHART. The source is United States Bureau of Labor Statistics. It shows the electrical machine workers have had a 20.4 increase; automobiles, 19.9; meat packing, 24.4; rubber products, 22; and steel, 20.9.
Now, my question is, if that is a true statement of the facts, then steel, rubber products, meat packing, automobiles and electrical machinery have had the same increase in hourly wages since June 1950.
Senator DOUGLAS. Mr. Putnam made the answer on that. The distinction that you have is between wage rates and earnings.
Mr. PUTNAM. They are quite different.
Senator DOUGLAS. If you have eight additional overtime hours at time and a half, that produces 8 bonus hours of pay so, on a 40-hour week, you get a 10-percent increase in hourly earnings although the hourly rates remain unchanged.
Senator MOODY. I would like to point out that Mr. Putnam has read Senator Douglas' book but Senator Capehart has not read Senator Douglas' book.
Senator CAPEHART. I don't know whether that is true; I don't know whether these facts are true.
Mr. PUTNAM. I do not doubt their accuracy, but they are not wage rates.
Senator CAPEHART. These are the facts in the steel controversy.
Now, they show--and I shall not read it again--but they show that since June 1950, the hourly wage earnings have been about the same for all these industries and if you award the steelworkers this 20 cents an hour, you take them up to 45.9 cents, which will make them, on an average, 23 cents higher than the others. Now, what is wrong with that chart?
Mr. PUTNAM. What's wrong with that chart is that it doesn't show wage rates at all. It shows the average hourly earnings, which may mean that some industries have been working overtime and show higher earnings; some may have been working on a short workweek. It is not a reflection of actual wage rates.
I think my chart on wage rates is a much better one—the one which was up there and which you saw.
Senator CAPEHART. It certainly demonstrates take-home pay; does it not?
Mr. FEINSINGER. Surely it does, but if we did business on the basis of take-home pay you would be in trouble if you were trying to protect against inflation. If the steel industry should go down to a 40-hour week in a couple of weeks, we would have to give them a terrific wage increase.
Senator CAPEHART. How much hourly-wage increase have the aut workers had since June 1950?
Mr. PUTNAM. It is easier to see it on the chart. (See p. 1972.) Here is General Motors increase today, since 1950 (indicating). This line is General Motors—the top there with an escalator clause. As of today, the amount of their increases since January 1950, including fringes, is almost 41 cents. Here is where General Motors will be in May when they get 4 cents more, and if the cost of living should go up they would be still higher.
Here is the maximum of the steel increase next January which is at about 42 or 43 cents, including everything since January 1950, the base date for our wage stabilization regulations.
Senator CAPEHART. The automobile companies had a 15- to 16-centan-hour increase since December 1950.
Mr. Putnam. It was the first of December 1950.
Since the base period of January 1950, General Motors had a total increase including the decrease that they took once because of a decrease in the cost of living, General Motors has had an increase of 27 cents, and Ford has had an increase of 28 cents, and you add 4 cents to those figures for what is going to happen. That is the base date.
Senator CAPEHART. We are talking about June of 1950.
Mr. FEINSINGER. It is 25 cents, if you take June and 27 if you take January. There was a drop in the cost of living.
Senator CAPEHART. The steelworkers have had 20.9.
rates. Senator CAPEHART. I am trying to find out if you agree with that chart.
Mr. FEINSINGER. I agree with it for what it is but it is irrelevant. . It deals with hourly earnings instead of rates of pay.
Senator FULBRIGHT. What are the average hours worked by steelworkers as compared with those in the automotive industry? Do you have that?
Mr. FEINSINGER. I don't have it at the present because no Government agency uses hourly earnings as a criterion for determining wage movements.
Senator FULBRIGHT. I thought it would clarify what is bothering him.
Could you guess at it?
Mr. FEINSINGER. It is varied in automobiles, you know. They have had lay-offs and shut-downs.
Earnings are a very misleading criteria. If we were going to use the textile industry, the hosiery industry and industries like that would be entitled to a terrific increase.
Senator Douglas. Primarily true on weekly earnings, but it is also true on hourly earnings.
Senator CAPEHART. If you are comparing these five industries in the same manner which you are, then I think this chart possibly speaks for itself.
Mr. FEINSINGER. You can't possibly compare wage rate adjustments, Senator, from any base date, you know, by using an hourly earnings index instead of a wage rate index.
Senator BENTON. Mr. Chairman, these gentlemen have answered that question about five times.
Senator CAPEHART. I would like to place into the record this document entitled: "These Are the Facts in the Steel Controversy."
Senator FULBRIGHT (presiding). Without objection that will be done.
(The document referred to will be found in the appendix, p. 2428.)
Senator Moody. I would like to put in the record the table from the hearings of the Wage Stabilization Board indicating comparative wage increases in various industries since January 1950.
Senator FULBRIGHT. Very well. (The table referred to follows:)
October 1950. October 1951.
1 Includes 4-cent annual-improvement-factor increases. Agreement provides for additional annual-improvement-factor increases of 4 cents per hour in June 1952 and June 1953.