HomeMy WebLinkAboutZurich Citizens News, 1976-09-22, Page 18Citizens News, September 22, 1976 -Page 19
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The anti-inflation program is nearly one
year old.
The program was announced last October
14 and the Anti -Inflation Act was passed by
Parliament in December. The goal was to create
a fair and stable economic climate for all of us.
Guidelines were established for the control of
prices, profits, incomes, dividends and
professional fees. The federal government
established a policy of spending restraint. The
provinces are supporting the program and are
applying guidelines in areas of provincial
concern such as rents.
The target of the first year of the
anti-inflation program was to bring inflation
down from a rate of 10.8% to 8% or les. This goal
is going to be reached. Still, many Canadians
are concerned about rising prices and may feel
in fact that prices are rising faster than their
family incomes. For most of us, this is not the
case. The facts prove that since the start of the
program most of us are better off than we were
before because salaries, on average, are
keeping ahead of prices.
Prices
Last year, sudden and frightening price
increases were happening all too often. By
October, 1975, Canadians had experienced 20
months of inflation of 10% or more. No one could
be sure how far the dollar earned one day
would stretch the next. The anti-inflation
program was brought in to control the rise in
prices, giving Canadians a better chance to
plan and live within their family budgets. Price
increases have slowed down. By August, the
annual rate of increase in the Consumer Price
Index had dropped to 6.2%. Although some
price increases have to be expected this month
and next, the 8% target will surely be met.
Wages
The anti-inflation program has also helped
to restrain increases in wages, salaries and other
incomes. The Guidelines on compensation allow
for a basic increase of 8%, plus 2% as a share •
of national productivity growth. Another 2% can
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be added or subtracted depending on whether a
group had kept up with or fallen behind cost of
living increases before the program began.
More than half of the agreements and settlements
reported to the Anti -Inflation Board have been
within these arithmetic guidelines. A gradual
downward trend in wage increases has started
and it should continue as more Canadians
realize that because of declining inflation, settling
for less won't hurt them.
The real gains
Since the start of the anti-inflation program,
the average Canadian has actually improved
his or her buying power. This is because lower
wage increases along with lower price increases
have resulted in a gain in real incomes. The real
gain is worked out by taking the actual increase
in earnings and subtracting from it the effects of
higher consumer prices. Real incomes are proba-
bly the best measure of how we're doing, of how
we can manage to pay our bills at home. By this
spring, real incomes were up 3.6% over last year.
Before After
First 9 months of 1975
compared to the same period in
the previous year.
GROWTH IN AVERAGE
WEEKLY EARNINGS
(INDUSTRIAL COMPOSITE)
143%
GROWTH
IN REAL
EARNINGS
3.0%'°
Most recent 3 month period tot
which earnings data available
Mar. May 76) compared to same
period in the previous year
GROWTH IN AVERAGE
WEEKLY EARNINGS
(INDUSTRIAL COMPOSITE)
12.9%
GROWTH
IN REAL
EARNINGS
3.6%
Controls on both prices and incomes are
part of the reason why the inflation rate is
dropping. The co-operation and hard work of
most Canadians is the rest of the story. We will
soon be moving into the second year of the
program, with a goal of lowering the inflation
rate to 6% or less. Working together we can
reach this target too.
THE ANTI-
INFLATION
PROGRAM
A REVEW
YEAR ONE