in addition to an earlier 15-percent raise. Negotiations of new contracts involving wage demands by this same group were pending at the year's end. The larger meat-packing firms, having raised wages 16 cents in February, completed negotiations in November and December 1946 that resulted in a general minimum wage increase of 71⁄2 cents an hour, plus additional varying amounts for specific establishments in order to eliminate regional differentials. Demands for similar contracts were pending in other industries. It is significant that most of these later, as well as the greater portion of the earlier postwar wage increases, were cents-per-hour rather than percentage increases. These will contribute to the further narrowing of traditional industry and skill wage differentials.

Uniformity of Inter-Area Postwar Gains

Unlike wage-rate gains characteristic of the war period, total postwar wage increases have been remarkably uniform among the larger cities. The October 1946 survey covered 38 cities. Separate data can be presented for 16 of these cities (see table 3). In Cleveland, Buffalo, and Louisville, manufacturing wages had increased by approximately 15 percent since April 1945; Philadelphia, Minneapolis, San Francisco, Baltimore, Providence, Portland (Oreg.), and New Orleans showed a 16 to 18 percent increase; and Houston, New York, Denver, Indianapolis, St. Louis, and Los Angeles had the largest gains from 18 to 20 percent.

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Rates of gair have not shown the same degree of uniformity throughout the postwar period, however, as can be seen from table 3. Thus, San Francisco and Portland (Oreg.) rates gained 15.5 percent and 16.2 percent, respectively, between April 1945 and April 1946 but only 1.2 and 1.5 percent subsequently, reaching total postwar gains of 16.9 and 17.8 percent; early postwar increases in Minneapolis and Providence were only 7.4 and 10 percent, but later advances were 8.2 and 7.0 percent, and the total respective gains amounted to 16.2 percent and 17.7 percent.

Regional wage relationships are constantly shifting. Evidence of substantial changes in inter-area differentials within a relatively short period appear in table 3. For example, New York City rates have shown a gain 16 percent greater than San Francisco and Portland in 31⁄2 years, but only 5 percent higher than Los Angeles, and 7 percent higher than New Orleans. Industry-wide bargaining with respect to inter-area differentials-as in the recent meat-packing negotiations-if extended to other industries, would have immediate and far-reaching effect on the Nation's wage structure.

The change from April 1945 to VJ-day has not been separated out at the area level. However, wagerate changes during this period (as shown in table 1) were negligible in volume for manufacturing as a whole.

TABLE 3.-Percent of change in urban wage rates in manufacturing, by selected area, April 1943-October 1946

Prices in the Fourth Quarter and Year 1946

Prices in General

PRICE ADVANCES DURING 1946 were greater than in any other year since World War I and in size were many times the moderate rises of 1943, 1944, and 1945. Increases were larger in primary markets (wholesale) than at retail-31.6 against 18.0 percent; and, in contrast to recent years, there were substantial advances for nonagricultural as well as agricultural commodities.

The rapid price rise in the third quarter of 1946 was repeated in the fourth quarter, with average primary market prices up 13.6 percent and retail prices of family essentials 5.1 percent higher. Average prices of farm products and foods advanced and prices of nonagricultural commodities rose even more than in the third quarter, as increases for metals and metal products, building materials, and chemicals far exceeded those of the previous quarter.

Annual percent changes in consumers' and wholesale prices from 1941 through 1946 are summarized in table 1.

TABLE 1.-Annual percent change in consumers' and wholesale prices, 1941–46

Advances over the year 1946 were led by increases for agricultural commodities. Retail food prices rose 31.5 percent-nearly twice as much as in the first year of the war before price controls were instituted. Primary market prices of farm products and foods were up 27.8 percent and 47.4 percent, respectively. Substantial increases occurred, however, in other groups of commodities, most of which had been relatively stable under price control in recent years. Thus, prices of metals and metal products, only 13 percent higher at the end of 1945 than at the beginning of the war, rose 27.6 percent during 1946. Prices of building materials increased 32.1 percent in 1946, compared with 11 percent in the 4 years ending December 1945.

Demand for both consumers' and producers' goods continued to be heavy as national income remained at a high level. Although output had reached peacetime peaks, supply was still inadequate to fill pent-up demand in many fields. Production costs were increasing as prices of raw materials continued to advance and workers were granted higher wages to cover reduction of wartime earnings. With the end of hostilities, moreover, many Government controls were relaxed or removed, and pressure for abandonment of all price controls was strong as Congress considered renewal of the Price Control Act. Developments in price control during 1946 were a major factor in the rapid advance of prices, particularly during the last half of the year. They may be summarized in four periods: (1) When controls were continued, but with many upward adjustments of ceilings (January to June); (2) when controls were suspended on all commodities (June 30 to July 25) and on important agricultural commodities (June 30 to September 1); (3) when controls were partially restored but with additional restrictions (July 26 to November 9); (4) when there were no controls, except for rice, sugar, syrup, and rents (November 10 to December 31).

Table 2 shows percent changes in consumers' prices and in primary market prices for significant price periods.

Price increases during the first half of 1946 largely reflected ceiling adjustments allowed by the Office of Price Administration on many products to cover higher production costs or to encourage increased production. Significantly, from the point of view of later developments, some of these were granted in basic industries, such as steel and coal, to cover higher wages under the Government's wage-price policy.

Following the temporary lapse of price controls on June 30, there were precipitate price increases, particularly for agricultural commodities. Retail prices of consumer goods and services rose 5.8 percent from mid-June to mid-July. Food prices jumped 13.8 percent-the largest monthly increase on record-but prices of other living essentials rose only slightly. General primary market prices increased 10.1 percent in July, more than in any month since the Bureau of Labor Statistics began compilation of its index in 1890. Largest advances occurred for foods, hides and leather, and farm products. Manufacturers of most industrial goods generally maintained former ceiling prices pending final decision on OPA controls.

The abrupt price rise was halted with restoration of controls on July 25, but many important agricultural commodities were exempted from control, and special provisions of the new act required additional exemptions and ceiling increases for many articles, especially for

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