542 GENERAL FARM PROGRAM 



production as a means of lielpino; to stabilize the amount of industrial 

 products available for exchange for the stabilized farm output? This 

 would help to stabilize both the income of farmers and wage workers. 



Although it is not the primary responsibility of this committee to 

 trv to stabilize industrial output,' you as Members of Congress do each 

 haVe a responsibility to find a solution to this vital problem and in- 

 fluence on farm incomes. We have two suggestions to leave with you 

 on this problem. The first one is an official Grange viewpoint, the 

 second is the writer's personal vieAvpoint. 



As a practical approach to unemployment, Avhy, as farm advocates, 

 do we not insist that labor and management, through their wage con- 

 tracts, introduce the policy of parity of wages similar to the basic 

 and equitable principles of farm parity which we accepted two decades 

 ago? Willford I. King has revealed in his studies that wages consti- 

 tute 60 to 65 percent of value of all goods turned out by industry 

 regardless of full employment and high output or high unemplyoment 

 and low output. Eigidity in wages which amount to two-thirds of 

 costs of all goods is a vital reason why managers close their plants and 

 cut their flow of goods that mean so much to farmers whose goods dur- 

 ing such time flow forth in an undiminished volume. Why should we 

 not insist that the currently considered minimum wage be tied defi- 

 nitely to a sound index of the cost of living in order to make it vary 

 both geographically and with time as the cost of living rises or falls? 

 There is no sound reason against, and numerous souncl reasons for, a 

 parity wage provision in all wage contracts. Such a provision would 

 not only be good for the laborer, but it would greatly help agriculture 

 and make for needed adjustability in our too rigid present economic 

 structure. It would certainly lielp to raise low farm income that is 

 caused by instability of industrial output, and it would be a most 

 important factor in stabilizing emplo3''nient. 



I personally believe the Xation or private industry can find prac- 

 tical means of setting up and carrying employment and output insur- 

 ance as contrasted to our present emphasis on carrying unemploy- 

 ment insuranc - as a safeguard against dej^ressions. As strange and 

 difficult as this task of developing and using employment insurance 

 sounds, I do not believe that it is impractical or unsurmountable. Wliy 

 have we, as farm leaders, not placed more emphasis on pushing for a 

 solution of unemployment and of stabilized industrial output, when 

 it is universally recognized among us that no fully satisfactory solu- 

 tion of the farm income problem can be found without first bringing 

 reasonable stability to nonagricultural employment and output? 

 I must confess that I have no sensible answer to this question. 



Although I personally freely recognize that the development of a 

 system of "employment and output insurance" for industry as con- 

 trasted to our present system of "unemployment insurance" entails 

 manj- com])lex considerations, I am certain in my own mind that a 

 ]iractical system can be set up and that it can be made a strong force 

 for making it more profitable for factories to be kept in operation arid 

 for laborers to adjust wages downward with general price levels in 

 order to stay on the job and to stabib/e industrial output with fa I'm 

 output. 



