LABOR POLICY AND THE OVER-ALL ECONOMY

against inflation in the so-called cost-of-living escalator clauses. In
fact, in the past year and a half, while consumer prices have been
rising, these escalator clauses and other similar provisions have some-
times provided almost as much—if not as much—wage increase in
industries with long-term contracts as the original base increase. Thus,
in the first half of 1957, wage increases were received by 5.5 million
workers under major collective bargaining agreements affecting one
thousand or more workers.

Of these, 2 million received deferred increases negotiated earlier;
another 2.3 million received cost-of-living increases; and the other 1.3
received increases under newly negotiated contracts. The median raise
under these new contracts was 11 cents an hour, as in 1956, but the
rates varied much more, with almost one-fourth of the new contracts
providing for increases of more than 15 cents an hour and almost
one-fourth less than 7 cents—down to no increase at all in some apparel
and textile contracts.

More than 4 million workers are now protected by escalator
clauses. Some 15 million workers are scheduled to receive previously
negotiated increases during the last four months of 1957, and at least
3 million are assured wage increases in 1958, come what may. This
then, is the pattern—“built-in” increases which assure higher wages
next year and the next, with big contracts in automobiles, farm imple-
ments, etc., coming up next year for renegotiation.

What I am saying, in substance, is that the factors of supply and
demand are as fundamental to an appraisal of the labor situation as
they are to an appraisal of the agricultural situation. At this time in
our economic history, the demand for labor is strong.

TIGHT LABOR MARKET WILL CONTINUE

Looking ahead, there is reason to believe that the labor market
as a whole may be “tight” for some years to come, especially for men
in certain age groups, and for certain skills in short supply. To be
sure, during occasional periods industrial and commercial activity may
slacken and the vigor of the demand for help may lessen.

Let me sketch the reasons why I believe long-term demand is
likely to exceed supply of the kinds of labor we are talking about,
until the mid-1960’s. Then I want to fit agriculture into this general
picture.

In this discussion I will make use of a recent publication of the
Department of Labor, “Our Manpower Future—1955-65.” This is a
recent analysis of the effects upon the nation’s future work force of

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