Next: The Annual Wage?

In Atlantic City's cavernous Convention Hall, at the United Auto Workers' convention last week, stretched a huge sign in gold block letters 20 inches high:

NEXT STEP FORWARD--GUARANTEED ANNUAL WAGE.

Cried President Walter Reuther: "We say to the employers: 'We are not going to sign new [contracts] until you put into them guaranteed annual wages for the workers in our basic industries.' " Reuther announced that he had persuaded ten top economists and industrial relations experts (e.g., Harvard's Economists Seymour Harris and Alvin H. Hansen, Wisconsin's Edwin Witte) to serve as unpaid advisers to help smooth out the specific details of workable annual-wage plans.

Actually, Reuther was far behind many farsighted U.S. companies, which long ago established annual-wage plans without any prodding. As long ago as 1946, the Department of Labor counted 196 companies with plans for guaranteeing minimum employment or pay to their workers. One of the most successful of such plans is that of meat-packing George A. Hormel Co. of Austin, Minn. Started experimentally in 1931, it now covers some 8,000 employees. Milwaukee's Nunn-Bush Shoe Co. began its famed "Share-the-Production" flexible annual-wage plan in 1935, has continued it, with slight modifications, ever since. Biggest and oldest of all plans is Procter & Gamble's. Begun in 1923, it guarantees each worker with a two-year service record 48 weeks of employment a year, and now covers 85% of all P. & G.'s hourly-wage employees.

P. & G.'s Chairman Richard Deupree believes that at least 85% of American industrial firms have enough year-round stability in sales to guarantee wages or employment. In hard times, Deupree points out, few companies can keep up the prosperity-level payrolls now being paid. Therefore, either the emphasis must be placed on regular employment (as at P. & G.), or else the wage guaranteed must be well below existing rates. Either method serves as a cushion during economic crises. Deupree credits P. & G.'s program as one of the main factors for keeping the company free of major strikes for more than 60 years. Says he : "Workers want security above all else. A man with a job is potentially a good citizen; a man without a job is potentially a bad citizen. Further, anyone who can operate a plant steadily . . . will have lowered costs. I think you can safely work on the basis that if you can have regular and steady employment, it will be an economical as well as socially beneficial move."

Reuther's annual-wage campaign cannot amount to much before 1955, when his five-year contracts with the auto industry expire. Actually, the industry has already taken big steps toward steady employment (e.g., by scheduling retooling during the vacation season, to avoid mass layoffs). But the automakers have opposed formal guarantees because of the fear that Reuther would want them pegged too inflexibly to current wage levels. Unless the wage is tied to prices, the automakers fear they will be unable to cut prices during a recession and still be able to meet payrolls.

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