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GM, UAW Agree on Sliding Scale;
Meat Union Forced to End Strike

General Motors Forestalls Walkout with 11-Cent Raise

(31 May 1948)

From The Militant, Vol. 12 No. 22, 31 May 1948, pp. 1 & 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Seventy-two hours before the strike deadline set by the CIO United Auto Workers for 225,000 members in 90 GM plants, the General Motors Corporation broke the Big Business front of opposition to any pay increases and agreed to a general wage raise of 11 cents an hour, effective May 28.

For the first time in any major union agreement, the proposed new GM contract incorporates the principle of the sliding scale of wages. This will provide automatic wage increases proportional to rising living costs, adjusted every three months on the basis of the cost-of-living figures of the U. S. Bureau of Labor Statistics.

UAW leaders hail the sliding scale cost-of-living contract, which must go to the GM workers for final ratification, as a “far-reaching victory” for the UAW’s one million members and “for all American workers.”

This present attitude of the UAW leaders is surprising in view of the bitter opposition of UAW President Walter Reuther to the sliding scale, principle. At the delegates conference last February and subsequently, Reuther attacked the sliding scale program advanced by five GM local union presidents in Flint. The sliding scale program has long been advocated by The Militant and demanded by UAW progressives, BUT WITH DEFINITE SAFEGUARDS THAT THE GM CONTRACT DOES NOT INCLUDE.

GM Feared Strike

The action of General Motors was undoubtedly based primarily ch the threat of a strike which, coming simultaneously with the two-week-old walkout of 75,000 Chrysler workers, could easily have developed into a general auto industry strike at the time of the highest profits in its history.

The actual immediate wage increase, however, is only about a third of the original demand of the UAW. This called for a total of 30 cents an hour more. The UAW International Executive Board, had adopted a program calling for a flat 25-cent increase in basic pay, plus five cents in fringe demands. Reuther was instrumental in reducing the basic pay demand on GM to 15 cents, offering to settle for this smaller sum if the company granted an “acceptable” pension plan.

However, the contract includes none of the vital welfare demands. Nor does it contain any of the essential improvements in grievance procedure and working conditions long sought by GM workers. The contract still contains all the onerous “penalty” clauses and other discriminatory features that have always made the GM contract the most unsatisfactory in the industry. Thus, the UAW leaders have accepted the sliding scale program not as a fortification of, but as a substitute for the needed increase in real basic wages, welfare benefits and grievance improvements.

The immediate effect of the GM agreement is to crack the solid front of the big corporations, including U.S. Steel, General Electric, Westinghouse, Ford and Chrysler, against any wage increases. It«, is expected that it will lead to a speedy settlement of the Chrysler strike and possibly the Ford wage negotiations. Chrysler had withdrawn even a miserable 6-cent offer, and Ford had insultingly “offered” a wage cut.

The capitalist press has greeted the GM settlement with great misgivings.. Prices have been rising steadily since the commodity market break last February. The ERP and the expanding military budget are expected to give a new impulsion to the inflation. The GM workers are bound to benefit by automatic wage increases during the next two years, the term of the new contract.

Here is how the new sliding scale contract will work:

Two “Gimmicks”

There are two real “gimmicks” in the contract, however. First, it establishes as the “norm” for real wages (the actual buying power of money wages) the ratio of living costs to money wages in the depressed year of 1940. Secondly, changes in living costs, for the purposes of the sliding wage scale, are based on the unreliable and doctored consumers prices index of the capitalist government.

The original UAW demands had called for a 25-cent increase in basic wages to bring the real wages up to the level of real wages at the end of the war. By arbitrarily going back eight years to August 1940, GM and the UAW negotiators established as a “norm” a figure for real wages which is only eight cents above the existing real wage. But GM hourly wages, before the present increase, were actually 20 to 25 cents below the real wages two years ago.

The three cents “improvement” boost was thrown in to cover up the fact that the “cost-of-living” increase of eight cents does not nearly compensate for the actual rise in the cost of living since the end of the war. The extra three cents does not begin to bring the real wages of the GM workers up to the highest previous peak and is only a slight “improvement” over the real wages of nearly a decade ago.

Easy to Cheat

The consumers prices index of the government, as the union leaders themselves have repeatedly pointed out, is heavily weighted to minimize the real rise in living costs. It will be easy to cheat the GM workers of increases to which they are entitled if the sliding wage scale is based upon a falsified index. The only reliable cost-of-living index would be one maintained by economists and statisticians of the unions themselves.

In the wage program of the UAW progressives, the demands were for a 25-cent raise in basic wages to bring real wages up to the highest previous level and for a sliding wage scale to protect these real wages from future price rises. The UAW leaders adopted the first demand and threw out the second. Reuther falsely claimed that the sliding Wage scale did not permit improvements in real wages. Now the UAW negotiators throw out the progressives’ first demand Slid settle for the second, which they had previously rejected.

Naturally, in negotiating a sliding scale contract, the workers must be wary of such “gimmicks” as have been incorporated into the GM contract. In taking over the wage program of the UAW progressives, the Reutherites have distorted it and left out the safeguards which the progressives have always included in their sliding scale program.

Forward Step

However, the principle of the sliding scale of wages represents a great forward step in this period of inflation. It is the indispensable and only immediately effective program to safeguard real wages against constantly mounting prices.

This sliding scale program, with all the necessary safeguards included, must become a great unifying and rallying slogan of the union struggle in the coming period of mounting inflation brought on by the new war preparations.

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