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Show lUagss, Poises, CoraMs In recent weeks the more widely publicized wage hikes achieved with or without benefit of strikes have been won by government workers. IN VIEW of the fact that roughly comparable gains have also been obtained by selected workers in the private sector, there is no question but that upward pressure on wages will intensify-perhaps dramatically-next dramatically-next year when far more workers will be involved in union negotiations. The resultant impact on prices and costs could well lead to renewed talk of government wage and price controls. President Ford favors voluntary wage and price restraint, but so far he has refrained from taking a consistently con-sistently tough stance to gain this end. LABOR HAS been cautioned cau-tioned to trim its demands so that the ongoing economic recovery will not be impeded. In the main, union chiefs have bided their time and scaled down their demands. Many companies have forgone for-gone price boosts, but those that did not have received only mild, indirect rebukes from Washington. FOR A TIME earlier this year, the Administration seemed successful in keeping both wages and prices from violent upspurts. But since spring, prices have been edging edg-ing upward more regularly. This provides union negotiators nego-tiators with a powerful assist as they seek "catch-up" raises for their members. There is considerable fear that it could lead to numerous inflationary wage settlements in 1976. ENERGY, transportation fees, and food quotes are mighty factors in the continued con-tinued uptrend in living costs. Price increases for services are also a cause for rising concern. The Bureau of Labor's Consumer Price Index In-dex is firmly locked in the up direction, and while the rate of increment is still below that of fateful 1974 the bulk of the factors suggest a quickening pace before midyear 1976. LAST YEAR the average level of the Consumer Price Index was 147.7. This year the -i it- i im cm i r average will be around 161. In 1976 it will be at least 170. And bear in mind that this measures only part of what are regarded as living costs even though the CPI is often mistakenly referred to as "the cost of living index." THE COST of medical and personal services will increase appreciably in the months immediately ahead, with sharpest boosts probable next winter and spring. Food prices will be up, on balance, with anticipated narrow supply-demand ratio in meats a buttressing factor. But we do not see any resort to controls in the offing. The President is on record as opposing op-posing controls; he knows that they are not only unpopular un-popular but also counterproductive. counter-productive. STILL, KEEP in mind that circumstances might force the Chief Executive to change his position. The Research Department of Babson's Reports feels that a' devastating devastat-ing run-up in prices can-probably can-probably willbe avoided next year. But, if worse came to worst, the Democratic-dominated Congress might be stampeded stamped-ed into voting controls. Whether Ford would go along, or they override his veto, could depend as much on overblown political rhetoric as on overblown prices. TO EASE recessionary pressures in 1974 and early 1975, the President and Congress cut federal income taxes. On the theory that continued con-tinued tax relief is needed to encourage the still slow recovery, extension of the 1975 tax cuts through next year is being considered. But in 1976 it may well be vitally necessary to ease up-pressures up-pressures on the economy. Congress has no stomach for the kind of spending slashes that could remedy such a situation. si-tuation. SO, ELECTION year to the contrary notwithstanding, it may have to boost taxes by June, or at least cancel the concessions granted earlier this year. |