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the relative importance of food had risen to nearly 42 percent of the index. That is, the 1935–39 quantities and qualities of food, at January 1950 prices, would have cost 42 percent of the total value of the index market basket. But a comprehensive consumer expenditure survey in 1950 revealed that food expenditures were only about 30 percent of the total outlay for goods and services. The explanation is, of course, that family incomes had risen more than prices and, therefore, families had more to spend on nonfood items, despite the fact that food prices had risen much more than the prices for other kinds of family purchases. As a result, the relative expenditures for food were lower, not higher, in 1950 than in the 1930's.
It follows that relative importance figures may not continue to represent the current distribution of family expenditures in the interval between
basic weight changes. Family spending patterns are affected by many factors other than price change, such as income, family size, and relative availability of goods of different kinds and qualities. The relative importance figures indicate only how urban families of wage earners and clerical workers would distribute their expenditures if they continue to buy the same kinds and amounts of goods and services that they purchased when the preceding expenditure study was made (e.g., 1950 as adjusted to 1952). Therefore, the relative importance figures should not be used as estimates of current spending patterns or as indicators of changing consumer expenditures.
Relative importance data have two principal uses. They show the importance within the CPI of the various items and hence provide an indication of the significance of price changes for any specific item. Secondly, they can be used as weights to recombine relative price changes for selected items to form special index groupings.?
Table 2 presents a list of the items priced for the Consumer Price Index and their relative importance in the index as of December 1952 (the date of the last basic weight revision) and December 1958.3
. For description of the method for doing this, as well as the precautions that must be taken, see Relative Importance of Items in the CPI (in Monthly Labor Review, August 1954, pp. 891896).
• The relative importance of CPI components as of the preceding December is published annually in the Monthly Labor Review; data for December of 1953, 1954, 1955, 1956, and 1957 appear, respectively, in the issues for August 1954 (pp. 891-896), April 1955 (pp. 444-447), May 1956 (pp. 568–571), May 1957 (pp. 599–602), and July 1958 (pp. 767-770).
TABLE 2. List OF ITEMS PRICED FOR THE CONSUMER PRICE INDEX AND THEIR RELATIVE IMPORTANCE IN THE ALL
ITEMS INDEX, DECEMBER 1952 AND DECEMBER 1958
TABLE 2. List of ITEMS PRICED FOR THE CONSUMER PRICE INDEX AND THEIR RELATIVE IMPORTANCE IN TAB ALI
ITEMS INDEX, DECEMBER 1952 AND DECEMBER 1958—Continued
Food at home-Continued
Strained baby foods.
Orange juice concentrate
Beans with pork.
Miscellaneous: Flavored gelatin dessert
Gas, residential heating
LIST OF ITEMS PRICED FOR THE CONSUMER PRICE INDEX AND THEIR RELATIVE IMPORTANCE IN THE ALL
ITEMS INDEX, DECEMBER 1952 AND DECEMBER 1958–Continued
Women's and girls' apparel-Continued
Men's shoes, street.
Children's shoes, oxford.
1 Less than 0.05 percent. ? Includes housing away from home, formerly shown separately. • New item; formerly represented by water heater.
Not actually priced; imputed from priced items. • New item; formerly' represented by hospitalization Insurance. Includes housing away from home, formerly included
in other services.
Foreign Labor Briefs
State, which makes up the deficit. The act is administered by the National Pension Board, which is supervised by 12 commissioners, elected by the Parliament.
Social Security in Finland
Children's Allowances. In keeping with the provisions of the Children's Allowance Act of 1948, the State pays a quarterly allowance for each child under 16 who is a Finnish citizen and resident in Finland. In 1957, the monthly rate was Fmk. 1,200 ($3.75) per child. The number of families receiving these allowances in 1957 was 642,743, the total number of children entitled to an allowance in these families being 1,390,969, or 32.1 percent of Finland's population. The total amount disbursed in 1957 for children's allowances was about Fmk. 20 billion ($62.5 million).
THE SEVERAL BRANCHES of the Finnish compulsory social security system are not unified and are administered separately. The most important elements are the Old Age and Invalidity Pension scheme and the Children's Allowance scheme. Workmen's compensation, another part of the system, is also compulsory in Finland. There is no national health insurance program. A compulsory unemployment insurance plan is currently under consideration. The Military Injury Act makes provision for disabled veterans. Many firms operate voluntary social security schemes for their employees which provide benefits such as health insurance.
Workmen's Compensation. This aspect of Finnish social security was first established in 1895 and is currently governed by the law of 1948. It covers all employed persons except casual workers and aliens. It is paid for the most part by the employer, although the Government pays some of the premiums of low-income employers and also pays for all increases granted because of inflation. Benefits are established by wage class for temporary as well as permanent disability. Comprehensive medical care is available for the insured. Benefits are also provided for widows and orphans. The insurance is written and largely administered by approved private companies, but the program is supervised by the Government Accident Insurance Office.
Old Age and Invalidity Pensions. The first National Pension Act in Finland went into effect in 1939, but the act currently in effect dates from January 1, 1957. All working persons over 16 are insured and are eligible for an old-age pension at the age of 65. All pensions are adjusted to the cost-of-living index. At the end of 1957, the recipients numbered 430,900 and pensions averaged about Fmk. 59,800 ($187).
Benefits provided by the new law fall into two categories—the basic pension of Fmk. 24,000 per annum ($75), payable to an insured person at the age of 65, and an assistance pension which is added to this and is based on a means test, the pensioner's marital status, and the cost of living area in which he resides. Invalidity pensions, payable on the same basis as old age pensions, are granted when an insured person is unable to perform suitable work, regardless of his age.
The pension program is financed by contributions from the insured (142 percent of his wage), the employer (142 percent of payroll), and the
Unemployment Programs. Currently, unemployment is being dealt with through work relief projects financed jointly by the national and local authorities as prescribed in the Unemployment Law of December 29, 1956. For this purpose, all municipalities have been divided into 10 categories in accordance with their ability to pay. Often the larger cities carry most of the unemployment burden. Tampere, for example, is responsible for the first 540 unemployed, and above that figure, the State pays one part and the city three parts of unemployment costs; the same is true in Turku.
• Prepared in the Bureau's Division of Foreign Labor Conditions. Based on United States Foreign Service reports and information from other American and foreign sources except as otherwise indicated.
1 Fmk. 320=U.S. $1, par value.
Affairs. The report suggested a compulsory unemployment insurance scheme under which all those who now contribute to the National Pension Fund would also pay a premium to the proposed insurance fund. The program would be administered by the existing National Pension Board. This report was widely criticized and is still held up by the Cabinet.
In rural districts, on the other hand, the State assumes most of the cost. In 1957, for instance, the State paid 67.7 percent of the total wages in unemployment relief projects and local authorities paid the remaining 32.3 percent.
Private unemployment funds operated by the trade unions and subsidized by the national Government play an insignificant part in the unemployment relief system. In 1957, the government (State and local authorities) paid a total of Fmk. 10.3 billion for wages for work relief projects, while the private unemployment funds paid out only Fmk. 91 million, two-thirds of which was reimbursed by the national Government.
On September 30, 1958, a special unemployment committee presented its plan for an unemployment insurance program to the Minister of Social
In 1956, expenditures for social welfare in Finland amounted to 10.8 percent of the net national income, or some Fmk. 22,000 ($69) per person. Of the total, 49 percent was paid by the State, 22 percent by local authorities, 24 percent by employers, and 5 percent by employees.
New Austrian System of Wage and Price Control
DURING 1958, the life of the Austrian Wage-Price Commission, established in 1957 on a temporary basis, was extended indefinitely. At the same time, its powers were broadened, thus giving Austria a system of wage and price controls which has operated with considerable effectiveness. The Wage-Price Commission grew out of the informal arrangement for discussing wage and price increases which existed during the difficult years of economic rehabilitation following the end of World War II. Thus, ad hoc meetings including the Chancellor, the president of the Austrian Federation of Trade Unions (AFTU), and representatives of the Chambers of Labor, Commerce, and Agriculture (quasipublic bodies representing the respective interests), and at times the National Bank, took place whenever necessary to discuss and/or formulate wage-price policies.? Such meetings became less frequent after 1952, however, and in 1955 the AFTU, which had consistently campaigned for an official body with extensive social and economic influence, again began to press for a formal labor-management-govern
ment economic consultative body. The trade union confederation envisaged something similar to the Dutch Social Economic Council, which must be consulted by the government on all matters of economic policy and which makes recommendations to the parliament.
Unable to get the People's Party, which has been partner in a coalition with the Socialists since the war, to agree to such an organization (the party sees in it a form of dual government, interfering with and usurping the functions of the parliament), the unions settled in 1957 for an organization with more limited powers—the Paritätische Kommission( Parity Commission), commonly referred to as the Wage-Price Commission. At that time, the unions were able to strengthen their demand for such a body by pointing out that inflation was recommencing (between December 1954 and December 1956, the cost-of-living index climbed 6.7 percent 3).
1 For a history of postwar wage-price policies, see Murray Edelman, The Wage-Price Agreements in Postwar Austria (in Monthly Labor Review, June 1954, pp. 629-634), and Leonora L. Stettner, Wage Pressures and Inflation Controls in Western Europe (in Monthly Labor Review, June 1956, pp. 664-670).
. See Ellen M. Bussey, Experience with Wage Controls in the Netherlands (in Monthly Labor Review, September 1958, pp. 982–987).
• UN Statistical Bulletin, various issues.