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It has been traditional on Labor Day to hail the high
standard of living produced by American working men and
women.
Indeed, the genius of the American economy has been
that those who produce the wealth are able to share in it.
Thus, workers here can purchase the products they produce
and enjoy a high standard of living.
That’s what we have always said. But on Labor Day 1974
we were not, in truth, so optimistic.
This year there is broad and justified concern concern
because a serious and continuing erosion in the living
standards of most Americans is now in its second year.
America has a new President and, while we have hope, we
have no assurance that the end to the economic mess is in
sight.
Usually this erosion in living standards is measured by
government statistics gross national product,
unemployment, consumer prices, real buying power and the
like. But the bare statistics of the economists do not tell the
real story the human story. In fact, some officials and
some economists became so engrossed in statistics that they
never realize that human beings are involved.
Unemployment figures tell us numbers and percentages
4.8 million people jobless; 5.3 percent of the work force
unemployed but the statistics cannot measure the human
suffering that accompanies unemployment.
The Consumer Price Index tells us a month later what the
supermarket checkout tape told American housewives daily
in dollars and cents as they struggled with their household
budget.
And the statistics of food prices do not, of course,
measure whether a family is eating better or worse.
All across America, families have been forced to abandon
efforts to improve the “quality of life” in favor of just
survival.
Families are “trading down” pot roast to hamburger;
hamburger to soybeans. Vacations and family outings are
shortened or postponed. New purchases are delayed. Families
are “making do” rather than improving their living standard
and retail sales patterns reflect this to the detriment of the
economy.
The cause of this erosion of living standards is clear in the
government’s statistics: cost of living up 11.1 percent in a
year; buying power of workers’ wages down 4.5 percent in a
year.
But the effects of a reduced living standard for American
families will linger long after inflation is pronounced “cured”
by government spokesmen and the buying power of workers’
wages increases. Some of the statistically unmeasurable
effects of inflation prove that.
How do you count the young people who have been
forced by high costs to pass up dreams of a college education
and to seek any kind of work to help their families make
ends meet?
How do you measure the effects on young childien forced
to grow up in unhealthy neighborhoods because better
housing is beyond their parents’ means?
Or what of children deprived of the stability and sense of
community that a home provides because the only shelter
their family can afford is the rootless, temporary world of
trailer parks?
What of the children robbed of family life because both
parents must work sometimes at more than one job in a
desperate effort to provide for the physical needs of their
families?
Do not forget the parents who deprive themselves for
This statement was issued on Labor Day 1974 by
George Meany, president of the AFL - CIO,
and is brought to your attention by the
Middle Georgia Association Os Union Labor.
\
PAID ADVERTISEMENT
Trading Down The
Standard Os Living
their families. The fathers and mothers who choose food for
the children over necessary health care for themselves.
Some might say that these hardships visited on the American
people are their share in a national sacrifice to defeat
inflation. If everyone were sacrificing equally, then the
American people would, of course, accept these hardships.
But the banks are not sacrificing. Bank profits, swelled by
record interest rates, are exorbitantly high. Corporate profits,
despite inflation, are up 28 percent in the second quarter of
1974. And this is on top of profit increases of 26 percent in
1973; 25 percent in 1972 and 17 percent in 1971.
This is not sacrifice; this is greed.
If workers were getting the same percentage wage
increases are corporations are reporting profit increases, all
the power and persuasion of the government would be
brought to bear on the workers to stop in the name of the
national interest. But only silence greets the new profit
figures.
Inflation, unemployment these are people problems,
and they call out for humanitarian solutions. Until now, the
government has treated the problems as mathematical
equations. It is our hope the new President will see more
than just cold, cruel numbers that he’ll see people, not
percentages, and that he will move with compassion.
Until now, government economic policies largely
devised by Federal Reserve Baord Chairman Dr. Arthur
Burns and supported by Richard Nixon have been devoid
of compassion.
Tight money, high interest rates and budget cuts will
reduce inflation, the policy makers say. But they never say
when. These policies have been in effect for the better part
of s ¥t years, and inflation has only gotten worse.
They never say at what costs these policies will work. It
doesn’t matter to them that these policies will increase
unemployment, because that is only a statistic. And
unemployment rarely hurts employed government officials
or corporate executives or bank presidents.
Dr. Burns’ economic policy theory is called the
“trickle-down” theory that is. if the rich gel richer,
eventually the poor will get something.
There is only one thing wrong with Dr. Burns’ theory; It
doesn’t work.
And every day that theory is practiced, a lot of little
people gel hurt.
Hundreds of thousands of workers have to lose their jobs
to make the “trickle-down” theory work. Their paychecks
stop. Idleness replaces productive work.
Subsistence unemployment compensation keeps food on
the table and a roof over the family’s head for a while. But
plans must be postponed; dreams delayed; savings used to
stay alive today instead of moving ahead tomorrow.
Os course a person who is unemployed is only counted as
a statistic so long as he or she is actively seeking work. Those
who have given up hope of finding work are not even
considered statistics. They are just not considered at all.
Last year at this time the average length of joblessness was
nine weeks —a terrible loss on productivity and consumer
purchasing power for a country dependent upon consumer
buying.
But. right now, the average unemployment period is 10
weeks and a day - better than a 10 percent increase in the
length of unemployment in a year.
The government counts 4,800,000 workers as
unemployed; 460,000 of them are construction workers
10.6 percent of all construction workers.
1 single out that particular figure for it is a direct result of
the policy of tight money and high interest rales. These
policies have caused a serious depression in the housing
industry. Not only are a large number of workers without
jobs that housing construction would normally provide
those directly involved in building and all those who make
products that go into a new home but many, many
families are without new housing that they desperately need
and want.
Housing starts during the first half of this year were down 31
percent over the same time last year and 1973 was worse
than 1972. Obviously, the housing crisis is deepening.
And the housing that is being built is beyond the means of
most Americans.
Less than 5 percent of new homes sold are priced at under
$20,000. Less than 30 percent are under $30,000. Mortgage
experts say that it requires an SIB,OOO annual income to
meet the total home ownership costs on a home with a
$30,000 mortgage. That rules out about 75 percent of
American tamilies.
The question that government officials must solve, then, is
why are 75 percent of American families unable to purchase
new housing?
The editorialists will probably say that the wages of
construction workers are the reason. Construction wages are
high, and there are good reasons why. Those wages reflect
hard-learned skills and who wants to live in a house built
by semi-skilled or half-skilled workers?
But workers’ wages are not the reason for high housing
costs.
According to the National Association of Home Builders,
which is a management association, the on-site labor costs of
a house today as a percentage of the purchase price is less
than half of what it was 25 years ago.
In other words, In 1949 when the average price of a new
home was $9,780, labor costs were 33 percent. Right now.
the average price of a new home is $35,800 and the labor
costs are only 15 percent. That’s 18 percent less.
Who, then, are the culprits? The money changers and the
land speculators are.
The cost of land in relation to purchase price went from
11 percent in 1949 to 25 percent in 1974. And the cost of
hiring the money has more than doubled in' the same period
of time.
Bear in mind that when a carpenter or a bricklayer or an
electrician goes home after working on a job, he leaves
behind something you can see, feel and appreciate. Bricks
have been laid, doors hung, wiring installed, a house built.
But the money changer he just hires out the money.
Payments on principal and interest for a 25-year, $25,000
mortgage at a 10 percent interest rate are $227 a month. At
the end of the 25 years, that $25,000 mortgage will cost
$68,000 or nearly $20,000 more than it would cost at a 6
percent interest rate.
And so the American labor movement urges the new
President to bring down the price of money so our people
can go to work and our families can get new housing.
That would be a compassionate, rational solution to a
problem of all the people.
America also needs compassionate, common-sense
solutions to the other problems of inflation.
One of the articles of faith of the “trickle-down” theorists
HOUSTON HOME JOURNAL THURS., OCT. 3, 1974,
is reduced government spending. And so they propose to cut
school lunch programs, reduce veterans’ disability pensions,
increase the amounts that senior citizens must pay for their
medical care.
All of these are wrong.
Consider, for example, the numbers of mothers who are
forced to place increased reliance on school lunch programs
for their children.
Soaring food costs have meant that many families are
buying less expensive, less nutritional foods In order to get
by— and many hope to make up the gap in nutrition
through school lunches and vitamin pills.
Food price increases are hitting hardest at the lowest
income families. The price of hamburger, for example, has
risen three times as fast as the price of porterhouse steak.
The government’s “low-cost” food plan for a family of four
rose 20 cents in June, while the food plan for richer families
went up 10 cents.
Thus, food prices are eating up an ever-increasing share of
low- and middle-income family budgets. And while retail
food prices continue to go up, the prices paid to farmers have
not. The difference is added profit for the middleman the
food processors, meat packers and retailers.
We all know that the disastrous sale of grain to the Soviet
Union touched off much of the terrible rise in food costs.
That event cannot be reversed. But it must not be repeated in
the future.
The government must guard against future shortages of
such vital foodstuffs to make certain that the price of food
does not bankrupt American families. And it must find ways
to increase the production of food to stockpile against
droughts like those that hit the Midwest this summer.
Similarly, the new President needs to think of people first
when he considers the problem of health care. Like housing
and food, the cost of medical care is getting beyond the
reach of most families.
Credit counselors say that the vast majority of personal
bankruptcies in America are caused by high medical bills.
In June alone, hospital charges increased at an annualized
rate of 26 percent, and physicians’ charges went up 23
percent. People need health care and they can’t get it If they
can’t afford it. And there are ways of bringing health care to
the people at costs they can afford.
We in organized labor know there are commonsense,
realistic solutions to inflation, -to the housing crisis, to
unemployment, to the high cost of food and medical care.
During the last Administration, we repeatedly suggested
solutions and offered cooperation. Our proposals were
rejected; our cooperation spurned.
But we are not discouraged. We are ready to cooperate with
the new Administration. We have hope that the new
President will act immediately to confront the problems of
the American people that he will seek realistic solutions
based on the people’s needs, not the patent medicine of
economic quacks. Os quackery we’ve had too much; of
compassion we have had too little.
The people don’t want the same old policies, the same old
promises, the same old predictions and the same old
disasters.
They want help for their sake and the sake of their
families, and for the sake of America.
And now they look to their new President for that kind of
help.
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