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From Labor Action, Vol. 14 No. 16, 17 April 1950, p. 2.
Transcribed & marked up by Einde O’Callaghan for ETOL.
Walter Reuther, at a recent United Auto Workers gathering; junked the idea of the escalator clause as being not so good for today. An escalator clause is a provision in a union contract which provides for a rising scale of wages as prices and cost of living rise or – as in the case of the GM contract, for a limited drop similarly.
General Motors’ workers had just received their second 2-cent cut in a two-year contract under which wages could be cut as well as raised. The Stalinists have been subjecting the GM escalator clause to a murderous barrage and, together with the wide coverage the capitalist press gave to the cuts received by GM workers, it has become (to say the least) an unpopular slogan.
Yet the escalator clause – that is, a proper escalator clause – should he one of the major demands of the trade unions today. Despite the leveling-off of prices the long-term perspective is still one of increasing prices.
Billions will be spent for armaments on an increasing scale, what with the rearming of Europe which has just commenced and projects like the hydrogen bomb. More and more of the wealth of the country must go for past and future war? and this means less production of consumer goods and resulting higher prices.
The right kind of escalator clause is the kind that is tied directly to the cost of living and which automatically gives workers all of the increases in the cost of living and not part as did the GM contract. The right kind of escalator clause would not permit any downward revision of wages under any conditions. The trouble with the GM contract is that it permitted limited cuts in wages if the Bureau of Labor statistics revealed any downward trends. It was not the idea of the escalator clause which should have been junked but the unsatisfactory GM kind.
It is indeed unfortunate that a faulty beginning should ruin the chances of an excellent idea which would be of immeasurable benefit to labor. The problem of continually going out on strike every year just to make up an increase in the cost of living is a very serious one. Workers have to exhaust themselves in order just to hold their own. A good escalator clause would, to a large extent solve this problem and free labor for struggles on a level which would mean more gains for thens.
When Reuther dropped the idea of including an escalator clause in the new GM contract he did so mistakenly. Chief responsibility for twisting the idea of the escalator clause must go to the Stalinists who subjected it to some of their choicest distortions. Because the GM clause permitted two 2-cent cuts, they succeeded in popularizing the idea that all escalator clauses meant cuts!
Despite all the difficulties the escalator clause has been subjected to, it will yet prove its worth as an instrument of defense for labor. Militants wherever possible should not allow it to be junked without at least explaining why the present GM clause failed and why one must still be for the escalator clause.
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