The Emergency Stabilization Act was passed in October 1942, which placed wages and agricultural prices under control. There were immediate wage restrictions, and in order to attract labor, the employers offered a range of such fringe benefits as pensions, medical insurance, paid holidays, and vacations. Because the foregoing were not paid out in cash, they did not violate the wage ceiling. Controlling output proved easier than controlling wages.
The Office of War Mobilization then emerged in 1943 to reallocate the production of military matériel. In order to convert to military production, resources for the production of consumer goods had to be diverted. The great surge in munitions production reached its peak in 1943, after such motives as patriotism and financial incentives drew the necessary resources to war production centers.
In June 1943, the OPA established more than 200 Industry Advisory Committees whose sole purpose was to aid the price control effort. The manufacture of such consumer items as refrigerators, automobiles and even housing materials was forbidden at that time. During World War II, many inflationary pressures were created by shortages of both goods and labor. The Consumer Price Index (CPI) increased by more than 35 percent. Strict limits were set on the manufacture of numerous consumer goods.
The public supported price controls, and businesses supported them even before they were implemented. Most labor leaders cooperated with President Roosevelt by pledging not to strike. With their cooperation came an increase in union membership, which resulted in a general decrease in labor militancy.
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