1984 - Commerce

Commerce

Britain's National Union of Mine Workers bans overtime work in January as pit closings loom. Ian Kinloch MacGregor, 71, insists on the government's right to shut down unprofitable pits; a Scots-born American who heads the National Coal Board that manages the industry, he closes a Yorkshire colliery in early March, and Mine Workers head Arthur Scargill, 45, takes 55,000 miners out on strike. Since 1977, workers who have mined more have earned more, a bonus plan favoring those in coal-rich Nottinghamshire but hard on those in north Derbyshire, Kent, Scotland, south Wales, and Yorkshire, where many miners join the strike. Violence spreads and other unions begin to support the strikers. Some 3 to 4 million are idle by year's end although many miners drift back to work.

Italy's Socialist prime minister Bettino Craxi issues a legislative decree February 14 that ends the scala mobile that has automatically linked wage increases to price rises (the inflation rate now exceeds 12 percent); another decree sets a 10 percent limit on government-controlled prices, such as those on electricity and gas. The country's largest trade union has opposed any wage reductions, the two other major unions have agreed after months of negotiation, but although the government says it will propose laws that block rent increases and set guidelines for voluntary reductions in working hours to cut unemployment, workers disrupt major cities with protest marches and wildcat strikes. The decree lapses April 16 after failing to receive parliamentary approval, but in a referendum held May 9 to 10 voters reject a Communist Party-sponsored proposal to restore wage cuts, a new decree issued April 17 wins approval in the Chamber of Deputies May 24 by a vote of 329 to 256, and the Senate approves June 8 to 172 to 12.

Japan's Nikkei average reaches 10,000 January 9 as optimists bid up stock prices to new heights. The average will nearly quadruple in the next 5 years (but see 1989).

U.S. economic growth rises at a 6.8 percent rate, highest since 1951, while the Soviet economy grows by only 2.6 percent, lowest since World War II, as grain harvests fall below target levels. The 3.7 percent U.S. inflation rate is the lowest since 1967, but U.S. budget and trade deficits rise to record levels, and the Department of Housing and Urban Development reports May 1 that 250,000 to 350,000 Americans are homeless.

Economic reforms announced by Beijing October 20 extend to urban areas the incentive system granted to farmers in 1979: wages and bonuses will be linked to job performance, prices will not be held to "irrational" levels, each enterprise will be permitted more independence to plan production and marketing. A degree of capitalism in Chinese rural areas has boosted production sharply and raised living standards.

Wall Street's Dow Jones Industrial Average closes December 31 at 1211.56, up from 1046.55 at the end of 1983.