Prosperity begins: highlights from PLANT in the 1950s

Forging steel in the 1950s. PHOTO: THINKSTOCK

With World War Two five years in the past, Canadian industrialization was taking off by the beginning of the 1950s. Indeed, the Canadian Encyclopedia notes it was largely responsible for the longest period of sustained economic prosperity that occurred between 1945 and 1970. Much of the postwar growth was fuelled by American investment and consumption. This brought about changes in the workforce and labour relations, which PLANT Administration often discussed throughout the decade. Many of these issues bedevil manufacturers today.

First some context.

In 1946, there were 1,214,000 workers employed in manufacturing, according to Statistics Canada. By 1950 the number had risen to 1,316,000 and by 1959, the total was 1,494,000.

Soldiers were part of a growing workforce and were doing their part to fuel industrial growth. Baby boomers (now on the retirement track) started arriving and over a 25-year period, the Canadian boom produced about 1.5 million more births (of a 8.6 million total) than would otherwise have occurred, an increase of more than 18%.

The Canadian Science and Technology Museum reports the 1950s promised new social and technological developments. People were driving car, household goods and appliance sales as they bought into home ownership.

Workers were also forming and joining unions, which fought for and won better wages and more vacation time.

Statistics Canada’s Canadian Social Trends report shows membership in Canadian unions nearly quadrupling between 1940 and 1956, a result of legislation that recognized labour organizations and enforced collective bargaining agreements. The Rand formula provided financial security to unions by requiring all workers in a bargaining unit pay dues, whether or not they were members.

Labour issues

In a 1950 issue, PLANT Administration identified the classic labour/management conundrum. Business thinks labour needs better leaders, while labour says there’s a need for better business leaders. Office workers were beginning to compare their lot with their production brethren, and Eric Taylor, an assistant manager in the industrial relations department of Canadian Industries had this to say: “A leader maintains his privilege of being a leader by his ability to maintain the confidence and trust of those being led. When and to what extent office and clerical employees turn from you to trade unions for leadership may well depend on their evaluation of the leadership you now provide.”

Labour comes up again in 1957 when PLANT Administration examined costs related to wages. Cost cutters can offset price hikes identifies a 2.5% edge wages had over price increases with more hikes coming as automatic increases. In 1956, weekly wages jumped from $60.87 to $64.19, a 5.5% increase. Prices increased about 3%. The article observed this cost-price squeeze cut into profits.

Some industries were not in a position to pass along the higher prices to consumers. Appliance and TV manufacturers in particular were caught in the squeeze because “the competition is tough.”

The solution? Improving productivity.

In 1959, a PLANT Administration editorial wondered if Canadian and US manufacturers, faced with spiralling costs, were importing goods from lower wage countries rather than making them at home.

A Canadian visiting a US plant learned the company had created a Dutch subsidiary to manufacture some of its lines for export to the US. Dutch skilled wages were 56 cents an hour compared to $2.56 in the US.

Canadian Manufacturers Association president Ian McRae declared it was time to formulate a “whip stiff” set of policies to help overcome impediments to the orderly progress of the economy.

He identified spiralling wages and increased government spending as major factors.

PLANT Administration concluded a heavy responsibility lies with employee representatives. “Union negotiators should know where to draw the line, should be flexible in their demands, and should be realistic. Above all, they should have the courage to admit to their members the force of management’s case on occasions.”

Management and unions continue to grapple with these issues.

This article appears in the April 2016 issue of PLANT.