Banner Graphic, Volume 21, Number 178, Greencastle, Putnam County, 2 April 1991 — Page 2

THE BANNERGRAPHIC April 2,1991

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Price hikes hit disgruntled Soviet people hard

MOSCOW (AP) Shoppers confronted with stiff increases in government-controlled prices dug deep into their pockets today and many despaired that they would no longer be able to feed their families. Price tags were marked up overnight for roughly half the goods in Soviet stores in an attempt to narrow the long-neglected gap between the prices the government charges consumers and rising production costs. IT WAS THE government’s most decisive step in the area in 30 years, and followed a grim winter of food shortages. Pro-democracy activists criticize the increases as skirting what they consider the only effective strategy for lifting the country from economic, malaise a swift move to a free market system. Across the vast country, prices doubled for milk and tripled for meat. Bread, the staple of the Soviet diet, was as much as four times as expensive. Increases ranging from 250 percent to 1,000 percent were set for television sets, refrigerators, clothes, shoes and baby carriages. IN MOSCOW, morning commuters faced an additional, little

Recession eats at Fortune 500 firms

NEW YORK (AP) The nation’s biggest industrial companies slumped in 1990: Earnings dropped, sales only inched higher and major industries suffered a swift kick from the recession, Fortune magazine’s annual top 500 list shows. “And the good news? It could have been worse and would have been if U.S. manufacturers had not spent the past decade restructuring themselves against such shocks,” the magazine said Monday in releasing the list. GENERAL MOTORS Corp., with $126 billion in revenue, remained No. 1 on the Fortune 500 despite $2 billion in losses. Ford

CORRECTION

In our Serta Mattress Sale insert in today’s BannerGraphic & Spectrum there was an error in size. It should have read:

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MIKHAIL GORBACHEV Favored by 14 percent

publicized increase: a tripling in subway, bus and trolley fares. “We don’t know what’s going on at the top,” said 82-year-old Valentin Khudozhnik, waiting outside a neighborhood bakery to buy his daily bread. “They have full pockets and we have empty ones ... We have to pull money out of our

Motor Co. slipped to No. 3 and Chrysler Corp, tumbled three spots to No. 11 as the auto industry slumped. Fortune said half the 50 largest industrial companies on its list lost money or earned less. Overall, Fortune 500 profits fell 11.7 percent, even though sales rose 6.4 percent. Fortune bases its list on total sales and rates only industrial companies. The magazine also compiles separate rankings of the companies by profits, assets, stockholder equity and other financial indicators. EXXON CORP, rose to second place in sales. Completing the top 10 were International Business Machines Corp., Mobil Corp., General

(Seita,

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Poll: Soviets favor Yeltsin

MOSCOW (AP) Eight in ten Soviet citizens are dissatisfied with living conditions in the declining superpower, and nearly as many say that if they could, they’d vote for Russian leader Boris N. Yeltsin for president Just 14 percent of respondents to the poll said they would pick President Mikhail S. Gorbachev for the country’s highest post, graphically illustrating the plummeting popularity of the Soviet leader. GORBACHEV rose to power six years years ago, championing glasnost and perestroika, only to try to rein in the reform process in recent months when it slipped out of his control. He has

empty pockets.” Food stores in Moscow were closed Monday to curb panicbuying and city officials said they feared civil unrest, but the mood in the capital today was more one of resignation than revolt. “WITH BREAD prices so high, can we live?” asked Nina

Electric Co., Philip Morris Cos., Texaco Inc., DuPont and Chevron Corp. A competing ranking by Forbes magazine of what it calls the “most powerful” American companies, also released Monday, didn’t mention GM because the automaker didn’t make any money in 1990. Forbes also ranks 500 companies by sales, profits, assets and market value. To distinguish itself from Fortune, it does a composite ranking across all categories to determine the “Super 50.” ON THE COMPOSITE list, General Electric Co. replaced GM as Forbes' “most powerful” company, followed by Exxon, IBM, Philip Morris, American Telephone & Telegraph Co., Mobil, Chevron, DuPont, Ford and Amoco Corp.

Banner Graphic (USPS 142-020) Consolidation of The Dally Banner Established 1850 The Herald The Dally Graphic Established IM3 Telephone 853-5151 Published daily except Sunday and Holidays by Banner Graphic. Inc. at 100 North Jackson St., Greencastle, IN 48135. Second-class postage paid at Greencastle, IN. POSTMASTER: Send address changes to The Banner Graphic, P.O. Box SOS, Greencastle, IN 48135 Subscription Ratos Per Week, by carrier *1.40 Per Week, by motor route. *1.45 Mail Subscription Rates R.R. In Root of Rest of Putnam County Indiana U.S.A. 3 Months *21.00 *23.00 *25.00 S Months *40.00 *45.00 *50.00 1 Year *78.00 *BB.OO *55.00 Mail subscriptions payable In advance... not accepted In town and where motor route service is available Member of the Associated Press The Associated Press Is entitled exclusively to the use for republication of ail the local nows printed In this newspaper.

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never faced popular election. The poll, conducted for U.S. News & World Report magazine by a Soviet firm, also found that more Soviets support the reformist coalition Democratic Russia than the Communist Party that has ruled the nation since 1917. The sampling was unusual in that it questioned 3,000 people in each of the 15 Soviet republics and all the autonomous republics. MANY SOVIET surveys cover only Moscow, where people tend to be more reformminded than the multiethnic body of 290 million people spread across the world’s largest country.

Akimova, a retired salesclerk who was crying. “I don’t care if there are shorter bread lines today than yesterday, I need bread today.” A kilogram (2.2 pounds) of beef rose from two to seven rubles; cheese from 3.2 rubles to 6.4 rubles, and the cost of 10 eggs doubled to 2.6 rubles.

AT&T was not on Fortune’s list because it is not an industrial company. The Forbes list includes service companies, retailers, financial institutions and utilities in addition to manufacturers. The lists showed how the recession touched major sectors of the economy. SALES SANK 96 percent among transportation equipment companies in the Fortune 500, 79 percent in textiles, 54 percent in building materials, 44 percent in metals, and 27 percent in motor vehicles and parts. GM lost $1,986 billion to finish 473rd in profits. Ford made SB6O million and Chrysler reported just S6B million in earnings, about as much as No. 486 Loctite Corp., which makes adhesives. Fortune said that “once growth resumes, the earnings of today’s leaner companies should bounce back.” THE MAGAZINE said recent restructuring efforts were reflected in a 38 percent increase in sales per employee, a measure of productivity, over the past five years. The Persian Gulf crisis and the resulting rise in oil prices helped the petroleum refining industry stay healthy, with profits 32.6 percent higher. Exxon’s surge past Ford to second place on the Fortune list came on a 22 percent increase in sales to $lO6 billion. Mobil rose one spot to fifth, Texaco jumped two places to eighth and Chevron rose to 10th from 11th. The Fortune list will be in the magazine’s April 22 issue, which hits newsstands April 8. The Forbes list will appear in the April 29 issue.

Evans wants new funding formula

INDIANAPOLIS (AP) State lawmakers say Superintendent of Public Instruction H. Dean Evans is jumping the gun by calling for changes in the school funding formula. “I always thought it was a little superfluous to talk about that until you know how much money you’ve got,” said Sen. Morris H. Mills, an Indianapolis Republican who chairs the Senate’s budget subcommittee. CURRENT BUDGET proposals would cut more than S2OO million in state aid to public schools. Nevertheless, Evans predicted Monday that the Legislature would come up with adequate funding before it adjourns this month. Assuming that, Evans said, legislators should approve House Bill 2011, which would redesign the formula that distributes state money to Indiana schools. Under the new formula, the state would provide extra assistance to poorer school districts. “At the same time we need proper funding for education, we need a sensible, constructive, fair, systematic and educationally sound plan for funding this multibillion dollar enterprise,” Evans said. BUT LAWMAKERS said Evans was jumping to conclusions. “I like the conclusions he’s jumping to, but I don’t think they’re realistic,” said state Sen.

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BORIS YELTSIN Favored by 80 percent

With the average monthly income at 270 rubles, those increases will strain household budgets and price increases for other goods could make them unaffordable for most people. THE COST OF a man’s woolblend suit more than doubled to 245 rubles. A color television now

Minimum-wage workers fear raise is already spent

CHARLESTON, W.Va. (AP) Minimum-wage earners say there’s little reason to celebrate a 45-cent-per-hour raise. The money is already spent. “Everything else went up, so you’re not going to see the difference,” said 23-year-old Melissa Waters, a cashier at Tudor’s Biscuit World. AT LEAST 3 million American workers got a raise Monday that pushed their wage to $4.25 an hour an increase of about $lB a week for a fulltime worker. It’s the second step of a twopart increase Congress enacted in 1989 after a long battle with the Bush administration. The first step took effect a year ago, when the federal minimum wage went from $3.35 an hour to $3.80. It was the first increase in nearly a decade. Workers say they won’t see much of the raise once taxes and bills take their bite. “YOU STILL CAN’T live on it,” said Jeff Harper, 20, as he rang up customers at an Arby’s in Charleston. He works at two fast-food chains and said he plans to get a third job at a toy store. In Mobile, Ala., a 1 percent increase in the local sales tax went into effect the same day the minimum wage rose. “Once somebody gets a little more in their pocket, they get a little more taken out,” said Kevin Larrabee, an assistant manager of Showbiz Pizza Place in Mobile. IN BETTER economic times, an increase at the bottom rung of

Kathy Smith, a New Albany Democrat and member of the Senate Education Committee. H.B. 2011 would equalize the differences in property tax revenues that make it more difficult for rural and inner-city school districts to provide a quality education. The poorest school district in the state has about $6,620 in taxable property per pupil. The richest district has $152,855. As a result, the richer districts can have low tax rates but still generate more money because they have more wealth to tax. UNDER H.B. 2011, local school boards would decide how much money they want to spend per pupil, and the formula would set their tax rates. For example, all schools that want to spend $3,500 per pupil would have the same tax rate. The state would make up the difference in revenues for the poorer districts. The bill would cost the state at least S2OO million during the next two years, legislators said. “House Bill 2011 provides equity for the property taxpayer,” Evans said. “House Bill 2011 provides access to adequate funding for all students at all levels in our state of Indiana. House Bill 2011 provides for the taxpayer at the local level to make decisions on spending for education.” UNDER THE House budget

costs 1,218 rubles up from 755 rubles and the price of a sofa nearly doubled to 346 rubles. President Mikhail S. Gorbachev ordered wage increases and other compensations to cushion the blow of the price increases, but it was not clear how effective those remedies might be. Shoppers were deeply skeptical that the increases would do much to improve their lives. “PRICE RISES are very bad. As they say, they took the last shirt off our back,” said Alla Nazartseva, 49, a daycare worker. “People who don’t have the chance to make money will remain half-hungry.” As conservative elements gained strength in the central government, Gorbachev abandoned his initial support for free market reforms, which would entail dismantling the control economy that reformers blame for low worker productivity and industrial inefficiency. Lydia Sokolova, a 61-year-old machine operator, groaned that a pair of socks now costs the equivalent of one day’s salary. “THEY GAVE ME a compensation of only 60 rubles, they should have given me more,” she said. “Of course it’s bad.... Just to buy a sweater I’d have to spend a month’s salary.”

the wage ladder could be expected to bump up the salaries of workers already above the minimum wage. But employers say that won’t happen this time. In fact, business owners say they will have to counteract the increase in labor costs with layoffs, shortened hours or higher prices. Lester Kurtz, vice president of the New Jersey Business and Industry Association, said the minimum wage increase “is going to force some employers to reconsider adding people and mechanize as much as possible.” Union leaders expressed no sympathy for business owners. “THE ONLY THING we can offer the crocodile tears of the employer arc tissues,” said Charlie Marciante, president of the New Jersey AFL-CIO. Labor contends the latest increase still falls well short of what workers need to stay out of poverty. The annual income for a full-time minimum-wage worker is below the federal poverty line for a family of three. The AFL-CIO has already called for increasing the base wage to $5.75 an hour by April 1994, which would raise it to its historical level of about half the average hourly wage. U.S. hourly workers cam an average of $10.20 an hour. MANY STATES have their own minimum wage. California’s has been $4.25 since 1988. In West Virginia, it’s still $3.80. “We’ve been behind more than this before,” said Bob Goff, a spokesman for the West Virginia Division of Labor.

proposal being reviewed by the Senate, school administrators say they would be forced to lay off some 5,000 teachers and 1,000 other employees during the next two years. Senate Democrats called last week for an SBOO million tax increase to prevent layoffs and cuts in public schools, and Republican) have suggested using the Rainy Day Fund and other reserves to keep schools going. However, Senate Education Chairman John Sinks, R-Fort Wayne, said unless Gov. Evan Bayh agrees to dip into the reserve funds or a tax increase, Evans’ proposal couldn’t be funded. “AS OF TODAY, April 1 and this is no fool things look as bad today for schools as they did two weeks ago,” Sinks said. H.B. 2011 died in the House. Evans said he hopes to resurrect the bill in the Indiana Senate, although he has not yet recruited a senator to handle the task. Addressing a group of 50 Vanderburgh and Lake county teachers and parents who attended Evans’ Statehouse news conference, he called on all Indiana voters to lobby legislators to support the new formula proposal. “The very best people to take their drumsticks and beat the drums are voters in various districts across the state,” Evans said.