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Lethbridge Herald (Newspaper) - January 6, 1971, Lethbridge, Alberta The Lethbridge Herald THIRD SECTION Lethbridge, Alberta, Wednesday, January 6, 1971 PAGES 31-38 Inflationary danger may moderate this year Pay raises worry authorities I'M NOT GUILTY, I TELL YOU - Willie Soy, pet dog of 12-year-old Jeff Thomas of Coatesville, Pa., waits in the police station jail cell for his owner to come bail him out. The St. Bernard, 14 months old, ran away from home and was collared in a cemetery where a caretaker called police. By CARL MOLL1NS OTTAWA (CP) - Federal au-t h o r i t i c s remain concerned about the inflationary danger of. pay raises that outstrip advances in productivity, despite a comforting new-year projection by the Organization for Economic Co-operation and Development. Economists of the Paris-based OECD, representing 22 industrial countries, said in a report last week that pressure for big pay increases may moder ate in 1971. The OECD report said wage increases in Canada during the 1960s typically lagged by about three years behind advances in output and profits. That lag persisted after the swift productive growth of 1966, the OECD said. The recent apparent conflict between strong pay increases on one hand and slackening output and profits on the other may be explained by the wage-lag, the report added "The same kind of wage lag might be expected to prevent an early cost push in the case of an acceleration of real growth" in 1971. An official of the finance de partment said federal economists do not dispute the basic OECD analysis that wages on one side and output and profits on the other rose and fell out of step in the 1960s. They say, however, that pay increases in recent years have pushed ahead of productivity advances and stimulated inflation. Any persistence of widespread pay increases of eight or nine per cent annually would be inflationary. WHICH CAME FIRST? Finance Minister Edgar Benson warned in his budget speech Dec. 3, "If we do not achieve the restraint of prices and costs that we must have, we shall not shirk from action that may be required on that front." 22 deaths in Quebec The reference to costs means pay. Trade Minister Jean-Luc Pepin said in a New Year's Day statement that "there is continuing upward pressure from the cost side which has yet to be adequately contained." The place of pay settlements in inflation is a point of political dispute and a matter for debate among economists. In one sense, it is a chicken-and-egg argument. The OECD year-end report suggests in effect that part of the difficulty of the last few years was that wages were chasing earlier increases in output and prices. In another study of inflation by the OECD economic policy committee, the persistence of Inflationary pressures in Can-; ada, even as other economic ac- j tivity slackened, is attributed to \ the chasing process. During the boom of 1965 and 1966, that report says, "the share of wages and salaries dropped quite markedly below trend . . . and this may have some bearing on the persistence of the subsequent wage-price spiral." Finance department calculations, using different figures and time periods, show a similar trend. TREND CHANGED IN '65 The finance department measures the rate of change in wages and salaries related to output and makes the same calculation for profits and other components of price inflation. In the five years to the end of 1965, unit pay costs rose an average of two per cent a year while corporate profits rose at an annual rate of almost six per cent. Then in the four years from 1965 to 1969, unit pay costs rose at a rate of 5.8 per cent and profits moved up only marginally on average. In 1968 alone, output per worker showed an above-average increase and unit pay costs advanced by four per cent, the same rate as prices. Profits rose that year by about 17 per cent. The following year output slowed down; unit wage costs accelerated to a rate of 6.3 per cent; profits per unit of output declined and prices rose by about five per cent. Final figures are expected to show a similar pattern for 1970. The Economic Council of Canada commented on the effects of various elements of the economy moving ahead at different speeds at different times in its October report. That report observes that of course increases in incomes that outstrip advances in real output will cause higher prices. "But the factors that produce demands for larger increases in money incomes ... are no always fully recognized. "One element in this complex matter is the attempt to 'each up' win previous price increases or to offset anticipated price increases. "In other words, inflation itself may tend to become a built-in facolr tending to sustain, even to augment, further inflation." New report issued in England Cigarette smoking a killer! LONDON (Reuter) - The influential Royal College of Physicians estimated today that 27,500 people between the ages of 35 and 64 die every year in Britain because they smoke cigarettes. The college also found that 90 per cent of lung cancer deaths are a result of smoking. In a report Smoking and Health Now, published1 today, the college said cigarette smokers are twice as likely to die in middle age as non-smokers and that two out' of every five heavy smokers die before 65. The chief causes, the report says, are lung cancer, chronic bronchitis and coronary heart disease. The college forecast 45,000-55,000 people will die from lung cancer each year in the 1960s if British smoking habits continue. Cigarette smoking now is as big a killer as typhoid, cholera and tuberculosis were for earlier generations, the report said. The college, founded in 1518, called on the government to ban all cigarette advertising and gift coupon schemes and to print warning notices on cigarette packs as in the United States. The report proposed the government make taxes lower on less harmful forms of smoking -cigars, pipes and low-nicotine content cigarettes. Lord Rosenheim, president of the college, in presenting the report said an official inquiry should be made into the economic consequences of present smoking habits in Britain. Rosenheim said the college will sponsor a new organization called A.S.H.-Action on Smoking and Health-to co-ordinate the activities of all groups engaged in health education. The report said the equivalent of $12 million was spent on cigarette advertising in Britain in 1968 compared to $250,000 by the health education council on an anti-smoking campaign. The children of pregnant women smokers, the report said, are born five or eight ounces lighter and the mothers are more likely to have miscarriages or premature births than ere non-smokers. The report urged all doctors and teachers to give up smoking and help teach children in particular about the dangers of smoking. All cigarette machines should be banned in public places. The college asked employers and unions to bring in wider smoking restrictions at work and asked the government to cut down smoking facilities in places of entertainment and on public transport. HEAVIER CALVES BRANDON, Man. (CP) -Beef breeding experiments at the Canada agriculture research station here have shown that Simmental-sired male calves from shorthorn, Angus and Hereford cows were eight pounds heavier at birth than male calves sired by Limousin bulls. Both Limousin and Sim-mental are European breeds. The gestation period in both cases was the same. Snowmobile safety urged MONTREAL (CP)-The snowmobile industry must shoulder a good deal of the blame for the 22 deaths caused by snowmobiles in Quebec this winter, George Springate, Liberal member in the national asembly for Montreal Ste. Anne, says. Unless the industry "starts policing itself," Mr. Springate warned, "somebody might start up a campaign" to force safety changes upon it. "I basically don't want to become Canada's Ralph Nader," he told the Dominion Automobile Association, "but if somebody doesn't get going, I'm ready." He made an appeal to the association to begin stressing snowmobile safety-instead of focussing solely on road acci- dents-but received a silent response. Better brakes, adequate lighting, windshield wipers and improved balancing to avoid spills are some of the needed changes, he suggested. The machines should also be equipped with safety devices that would protect the passengers if the snowmobile crashes through thin ice on a lake or river. -AT- OSBORNE'S LADIES' WEAR THURSDAY, JAN. 7th - 10 A.M. TO 9 P.M. ?COATS * SUITS * PANT SUITS * DRESSES * PANT DRESSES * GOWNS * PANT GOWNS * PANT COATS IAYAWAY PRIVILEGES 328 7th St. S. 327-7220 CANADIAN FURRIERS During Our Fabulous January Sale! All fun carry Canadian Furriers' famous two-year written guarantee We guarantee that l quality-for-quality no one brings you better value! This is but a partial listing of the Finest Fur Values in townt MINK PAW JACKETS Regular la $695. SALE .................................... CANADIAN MINK COAT Regular to $1495. SALE .................................... CANADIAN MINK JACKETS Regular to $795. SALE .................................... MOUTON LAMB COATS (Dyed Protested Lamb). Regular �c $325. SALE...................... NATURAL MUSKRAT FUN COATS Regular to $425. 5ALE..................................... $378 $548 $1088 $488 $248 $328 Usa Our Varsatil* Budget OPEN THURS. AND FRI. TILL 9 P.M. CANADIAN FURRIERS "IN A TRADITION OF QUALITY" PARAMOUNT THEATRE BUILDING, LETHBRIDGE 96 ;