Wage Stabilization Board
| NWSB | |
| Agency overview | |
|---|---|
| Formed | January 1, 1946 |
| Preceding agency | |
| Dissolved | February 24, 1947 |
| Superseding agencies |
|
| Jurisdiction | Federal government of the United States |
| Headquarters | Washington, D.C. |
| Parent agency | Executive Office of the President |
| WSB | |
| Agency overview | |
|---|---|
| Formed | September 9, 1950 |
| Preceding agencies |
|
| Dissolved | February 6, 1953 |
| Superseding agencies |
|
| Jurisdiction | Federal government of the United States |
| Headquarters | Washington, D.C. |
| Parent agency | Economic Stabilization Agency |
The Wage Stabilization Board (WSB) was an independent agency of the United States government whose function was to make wage control policy recommendations and to implement such wage controls as were approved. There were two agencies with the same name. The first, the National Wage Stabilization Board, was the successor to the National War Labor Board, and existed from January 1, 1946, to February 24, 1947. The second, the Wage Stabilization Board, was a part of the Office of Defense Mobilization and existed from September 9, 1950, to February 6, 1953.
The first agency, known as the National Wage Stabilization Board, was established by President Harry S. Truman within the United States Department of Labor in on January 1, 1946. The purpose of the new agency was to continue the work of the National War Labor Board.Executive Order 9809, issued on December 12, 1946, abolished the National Wage Stabilization Board effective February 24, 1947.
The Korean War broke out on June 25, 1950. After an initial (and significant) surge of inflation, President Harry S. Truman's war mobilization effort began to achieve some success in stabilizing the American economy.
On September 8, 1950, the U.S. Congress enacted the Defense Production Act. The Act gave the President statutory authority to order companies to do business with the United States in order to furnish equipment and services needed for national defense; to establish federal agencies as needed to implement the Act; and to allocate resources, personnel and funds to ensure national defense needs were met. However, the Act tied wage controls to prices. If any price ceiling was imposed, the government was required to issue regulations and orders stabilizing wages in the affected industry.
The next day, President Truman issued Executive Order (EO) 10161, which established the Economic Stabilization Agency (ESA) to coordinate and supervise wage and price controls. Utilizing the wage and price control model developed in World War II, the Truman administration created two sub-agencies within ESA. The Office of Price Stabilization (OPS) was given the power to regulate prices, while the Wage Stabilization Board (WSB) oversaw the creation of wage stabilization rules. The division of labor was specifically designed to unlink wages from prices. If prices rose automatically with wages, the inflationary spiral would continue unabated. Placing the onus solely on workers to keep wages low risked the wrath of labor, a lesson the administration had learned from the WWII experience. Delinking wages and prices leveled the playing field. Both workers and employers would now be forced to justify, independently, the wages and prices they demanded. The Wage Stabilization Board was authorized to control wages only for hourly employees. However, the WSB's authority in this regard was extremely limited.
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