Hit the Ceiling

Tucked away in the second-floor recesses of the great, grey Department of Labor in Washington sits a little-known but influential man: Ewan Clague, commissioner of the Bureau of Labor Statistics. It is he, knee-deep in charts and statistics, who figures out how high the cost of living has gone. Last week he reported that his sensitive consumer price index (based on 200-odd household commodities) had advanced sharply (.6%) since Sept. 15 to an alltime high ceiling of 174.8%. (The base figure of 100% is based on living costs in 1939.) It would be considerably higher, he added, if his figures accurately measured rent costs. And, said Statistician Clague, there is no end in sight.

To most people who are salaried or paid by the hour, and to housewives stretching the family budget by buying cheap cabbage instead of costly spinach, the steady rise in living costs meant a steady drop in real earnings. But a million wage earners in the mass-production industries--including some 600,000 United Automobile Workers--have their pay hitched to Clague's index and ride up with it. For them, Clague's figures meant a 3-c--an-hour pay raise which would cost employers $17 million. Thus the Government, by noting the actuality of inflation, automatically increased it ("built-in inflation," economists call it).

Clague's figures had a further effect: they took the fight out of the steel industry. Steel bowed to the C.I.O.'s Phil Murray and granted his near-million United Steelworkers an average 16-c--an-hour wage increase. Steel then promptly raised its prices 5 1/2%. A fifth round in steel, however, should not set off another round for everybody; all basic industries, except steel and John Lewis' coal diggers, had already got a raise since the Korean war began. Before Ewan Clague's cost-of-living index inched up again, there was a good chance that some kind of wage and price controls would be clamped on. When that happened, the brief, happy, between-wars interlude of freedom in the market place will be gone.

This file is automatically generated by a robot program, so reader's discretion is required.