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Fighting Steel Workers Triumph

New Wage-Freeze, Price Rise Formula Issued by Truman

(18 February 1946)

From The Militant, Vol. X No. 8, 23 February 1946, pp. 1 & 2.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

FEBRUARY 18 – The titanic strike of 800,000 CIO Steelworkers, the largest walkout in American labor history, has ended in victory.

Unable after 26 days to crack the solidarity of the steel workers, the steel corporations, through U.S. Steel, capitulated on Friday to the final 18 cents an hour wage increase demand of the union.

Never before has the ruthless U.S. Steel Corporation yielded to a strike. Never have the steel barons been forced to grant large a wage concession.

The victory of steel labor has broken the back of the Big Business resistance to the other outstanding wage demands in auto and electrical equipment.

GM Workers Firm

General Motors Corporation is still trying to chisel an extra cent off the 19½ cents demanded by the heroic GM workers, whose 90-day strike has spearheaded the whole fight of the CIO. But the GM workers, heartened by the steel victory, are standing firm as Gibraltar.

From the first days of the steel strike it was clear that the steel corporations faced the most united and formidable union resistance in their .history. The first hour of the strike that began January 21 saw the entire industry paralyzed. The question then was, not would the steel barons be forced to make wage concessions, but how much?

For weeks, the corporations prolonged the strike with the sole objective of preserving their Immense profits and augmenting them, despite wage increases, by wangling extortionate price boosts.

The Truman administration only too readily bowed to the Inflationary demands of the profits-swollen corporations. It granted a price increase of $5 a ton on steel – 10½ per cent.

Gravy for Bosses

Every penny of this price increase is pure gravy to the corporations. Wartime excess-profits tax rebates, the elimination of the profits tax, the reduction of overtime premium pay, and the increased labor productivity more than compensate for the increase in labor costs due to the new wage gains.

The pattern established by the administration’s generous approval of these staggering price increases is one of mounting inflation, whereby Big Business, unable to deny substantial wage increases, plans to nullify these increases as quickly as possible through a skyrocketing cost of living.

Big Steal Formula

Simultaneously with the announcement of the steel settlement, the Truman administration announced its intentions to enforce a new “wage-price stabilization” formula. This “formula” is a refurbished Little Steel wage-freezing policy, which is already being called the “Big Steal” formula.

This formula would limit wage increases to between the 16 and 18 cents which the strikes have forced the government to concede, while guaranteeing “immediate” price increases for any wage increases approved by the government wage-price agencies. One new twist ensures that no wage increases will be granted without the prior approval of the government wage-freezing agencies. This is the denial of price increases to any firm which grants unapproved wage rises.

It has become glaringly apparent that the wage gains won by the steel and other unions face imminent shrinkage. An inflationary offensive has been unleashed by the corporations and their government hirelings intended to rob the workers of the full benefits of the higher wages they have won in their magnificent strike struggles.

In this sense the victory, of the steel and other workers must be viewed as only partial and temporary. Before long, the whole struggle will have to be renewed on an even broader and more decisive scale.

More and more the workers are realizing that wage increases of and by themselves are no assurance of a sustained higher standard of living and a greater share in the nation’s wealth. Inflation expressed in higher prices for necessities is the device to which the capitalists invariably resort to reduce the purchasing power of the masses when money wages are increased.

Next Step

The only means for effectively fighting the robbery of capitalist-created inflation is through a rising scale of wages which is automatically adjusted to every rise in living costs. That must be the key economic slogan in the renewed wage struggle which is bound to come on the heels of the mounting inflation.

Of the lessons learned in the great strike wave, one of the most important for the workers will be their clearer comprehension of their friends and enemies.

Stalinist Double-Dealing

A particularly perfidious role has been played in these strikes by the Stalinists. Despite their newly-proclaimed “militancy,” the unions under their domination were the last to go on strike, and are making the poorest settlements. The Stalinists climaxed their double-dealing with the secret 18½ cent wage agreement affecting the GM electrical workers organized in . the CIO electrical union which undercut the 19 cent wage demands of the OM auto workers.

Within the ranks of labor the strikes have revealed weaknesses that must be quickly eradicated in preparation for the next inevitable stages of struggle.

The chief weakness is political. The workers, lacking any political party of their own. have no real means for combatting the blows of the capitalist government, its administration and Congress. The capitalist government has proved the most formidable obstacle to the realization of labor’s full demands

The union leaders have continued their utterly bankrupt policy of attempting to place dependence upon the capitalist government and maintaining in one form or another their ties with the capitalist political parties, Democratic and Republican.

But the next and more crucial phase of the struggle may well prove costly to labor if it does not take immediate steps to create its own political instrument, a labor party, and begin to run its own labor candidates.

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