Masonry Magazine September 1969 Page. 30
Washington Wire
PRODUCTIVITY IN MANUFACTURING IS DECLINING and is exerting a squeeze on industry's profits. More than that, though, the dip may be another sign of slow-down; the trend in output per manhour often precedes the economy's. Employers are usually reluctant to lay off skilled men as output is trimmed. This means that costs stay up, but there's less production to charge to it.
Productivity fell 0.3% in the second quarter. The decline contributed to a 1.6% rise in unit labor costs. Such cost increases operate to pressure business into raising prices.
ECONOMISTS ARE TAKING THEIR FIRST TENTATIVE LOOKS AT 1970 these days, to help government and industry on forward planning. The conclusions drawn will be revised a number of times, of course, before the start of the year. But they are worth keeping in the back of your mind as you think about 1970. The forecasts assume that the war tempo will ease and the surtax will drop.
Over-all, the economy will grow a trifle more slowly than in 1969. Gross National Product will rise 6½% to 7%, down from the estimated 7¾% of this year. After washing out the effect of price increases, real growth will be little more than 2% -down from the 3% being projected for 1969. The trend within the year may prove even more significant than the totals. The experts think that you will see all the sluggishness in the first half; real growth may be only 1% a year in this period. But the pace will quicken in the second half. Few experts see a recession in this outlook.
What the forecasters look for in some specific sectors:
-Industrial production will rise little-no more than 1%.
-Unemployment will hit 4% of the labor force from 3.6% now.
-Spending for new plant will level out, at current levels.
-Home-building will pick up but from levels below today's.
-Profits will flatten out, after more declines this fall.
CONGRESS FACES A LOT OF UNFINISHED BUSINESS this fall. Its record of accomplishment has been meager, to date. And there'll be no whirlwind now. Impressing the voters can wait until 1970-an election year. Anyway, there isn't enough money to finance new programs. And today's conservative climate opposes heavy spending. So, net, even certain of Nixon's pet ideas will go over until 1970, blocked by the growing hostility of the Democrats.
Here's the probable fate of pending tax and money bills:
-Extension of the surtax on January 1 at the lower 5% rate will be allowed to die, if the economy starts weakening.
-Tax reform faces softening changes in the Senate. Many of the poor will still get relief. But the White House will push hard to shrink the benefits for middle-income groups. Income now exempt from tax won't be hit so hard.
-Revenue-sharing with the states has a lot of opposition and no big Federal surplus to share. No chance this year.
-Appropriations may stay large as Congress authorizes more spending on domestic programs than Nixon deems advisable. More for, say, schools tends to mean less for defense.
The outlook for other expensive legislation:
-Social security: No action in '69 on Nixon's request for a 7% hike in benefits. Next year, the boost may be 10%. And payroll taxes on workers and company may be raised as well.
-Welfare: Congress likes the work-requirement part of the new Nixon plan-but cost and complexity will delay action.
-Foreign aid: Congress will cut Nixon's $2.6 billion total.
How Congress will dispose of other key proposals:
-Jobless pay: Nixon's bill to put 4.8 million more under unemployment insurance will face trouble, even next year.
-Post Office: No action is due on that new corporation to run the mails or on increasing the first-class rate to 74.
-Job Safety: The bills to set Federal safety standards are given little chance this year-but a good one next year.
A BASICALLY DIFFERENT SUPREME COURT IS NOW OPERATING in Washington, poised to take a basically new more conservative-tack on such key issues as the rights of criminals... racial questions. wire tapping... the draft conglomerate mergers. strikers' rights... and protests. Nixon's two appointees give the "strict constructionists" a 5-4 majority.
"LOCATING OR RELOCATING YOUR BUSINESS" is the title of a new booklet put out by the Small Business Administration. It covers such vital factors as your market, transportation, and available plant, labor, and materials. Write SBA (Washington, D.C. 20416) for Management Aid No. 201. It is free.
THE DEMOCRATIC PARTY HAS MAJOR HURDLES TO OVERCOME, if it is to hold its Congressional majorities in 1970 and shoot for the White House in 1972. Most political analysts feel that the Party's organization has deteriorated. They note that it is deep in debt, with money hard to raise from supporters. And there are no national leaders with the glitter of a Kennedy or a Nixon. By contrast, President Nixon is leading a relatively dynamic, united GOP. He is vulnerable to a failure to end the war-very much so-but little else.