One of President Carter's top economic advisers yesterday blamed the "average American," not corporate profits, for much of the nation's inflation problem.
Barry Bosworth, outgoing director of the Council on Wage and Price Stability, warned that despite soaring prices for food, fuel and housing, the average worker should not expect any real increase in wages.
"I think the problem is the average American, and it's not a pleasant fact," Bosworth told a meeting of Women in Housing and Finance. But unless the average worker changes his ways, he predicted, the United States may be headed down the same economic road as Great Britain.
Bosworth said that in the absence of any real growth in productivity, there could be no real wage increases without adding to the inflation problem. "Unless we do more work (this year) than we did last year, then there can be no (wage) increase," he said.
Therefore, Bosworth said, "Any attempt by the individual to increase his own standard of living has to come at the expense of somebody else. Every American catches up (on inflation) by taking it out of the hide of someone else."
Bosworth pointed to the current fuel demands of farmers and independent truckers as an example of the type of self-interest that adds to inflationary pressures.
"One of the reasons that the energy crisis is so severe . . . is that one group after another has come in for special allocations," Bosworth said.
Singling out the farmers' request for 100 percent of last year's fuel allocation to harvests this year's crops. Bosworth said "if they use it all for the harvest we ought to have the most fantastic harvest in history. Everyone wanted a little more than needed and then sold the excess to someone else."
He added that the nation would also be in trouble "if everyone acts like the truckers."
Bosworth, who will be leaving COWPS this summer, said the current inflation outlook calls for "further blows" to the government effort to moderate inflation. "Energy has now replaced food as the major inflation problem," Bosworth said, "and people are going to be shocked when they see what utility prices are going to be."
Bosworth also warned that "no matter what energy solution (the nation decides on), energy costs are going to go up much more rapidly than other costs." In general, he said, "housing, food and energy prices will be going up much more rapidly than anything else even if there are zero wage increases."
Bosworth insisted that wage and price controls were not a viable option for curbing inflation. Not only was there no sentiment in the White House or Congress for controls, he said, the key elements of the current inflation would not be affected by controls.
He said food costs are controlled by market forces. For example, he said, "the current rise in breef prices will only come to an end when people quit buying beef." And, he said, neither OPEC nor productiviey are touched by a controls program.
Bosworth conceded that the current wage-price situation was "unfair," but said the alternative was a recession which would throw millions of workers out of their jobs. "It is unfair . . . but it is a fact of life," he said. "The question is whether we can accept it or repeat what happened in 1973-74" when the recession left 9 million out of work.