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The New York Times
Section 4 - Review of the Week
THE NEWS OF THE WEEK IN REVIEW
Large photo in center "Key figures in two critical labor-management disputes"
PHILLIP MURRAY, president of the steelworkers: "The producers are seeking a strike."
BENJAMIN FAIRLESS, president of U.S. Steel: "The responsibility is yours, not ours."
-A Basic Controversy
A showdown is at hand in a fundamental conflict between labor and management. The issue is one of deep and long-range significance in industrial relations. It involves a relatively new principle urged by labor in collective bargaining--the principle whole cost of protecting its workers against the hazards of illness and old age.
The deadline is 12:01 A.M. next Sunday. That is the hour of a strike called by one of America's largest unions, Philip Murray's 1,000,000 member United Steelworkers, against one of the nation's most vital industries, steel. The hope of forestalling the strike lies in a Government effort to mediate the dispute this week. Failure of this effort might be a signal for a strike not only in steel but also in other industries where the same issue has arisen--in autos, electrical manufacturing, rubber, shipping. Yesterday the outlook was complicated by strong indications of a work stoppage tomorrow--involving a pension system already established--by John L. Lews' coal miners.
The labor-management showdown comes at a critical period in the course of the American economy. Through the earlier months of 1949 the economy was a cause of concern. Production declined. Unemployment increased. In recent weeks there have been signs--higher production, lower unemployment--that the "recession" may have ended. Now there are new fears about the economic consequences of all-out strife between labor and management.
-Threat in Steel
Pension systems have long existed in scattered segments of the economy. They have been paid to railroad men, teachers and other civil servants, military men, some workers in industry, With some exceptions the existing systems require the worker to pay at least part of the cost through payroll deductions.
Worker security got its greatest national impetus in the Social Security Act of 1935. the act insures 42, 500, 000 workers against unemployment and old age. The system is financed by payroll taxes on both employes and employers. Its benefits now are widely regarded as inadequate. On retirement the average worker gets only $26 a month; if he has a wife they get $40. As part of the Fair Deal, President Truman has asked Congress to increase the benefits--and the payroll taxes--but Congress has not acted.
Meantime the worker-security question has loomed ever larger in labor-management relations. Since the beginning of world War II, collective bargaining has resulted in a wide range of welfare plans. the plans cover 3,500,000 workers-nearly on fourth of all union members. Under most of these new plans--notably those for coal miners, garment workers and musicians--the employer pays the whole cost.
-Security the Goal
Last spring, when the big mass-production unions of the CIO set in motion their drive for a fourth round, they made security a primary goal.
The steel workers wrapped up their security demands in a "package" with age demands. The "package" totaled 30 cents an hour per worker. It comprised of 12.5 cents for a wage increase; 11.23 cents for pensions of $125 a month, and 6.27 cents for social welfare including life insurances, disability benefits, hospitalization and surgical care.
In negotiations on the "package", Mr. Murray and the steel industry found no area of agreement. In July, just before a strike deadline, Mr. Truman asked both sides to accept a sixty-day truce (until last Tuesday midnight) so that a special three-man board might investigate the dispute and recommend a settlement. Mr. Murray promptly accepted. The steel companies accepted reluctantly. They stipulated that they would not be bound by the Presidential board's recommendations.
The board held in New York eighteen days of hearings on the steel dispute. Unions in autos, electrical manufacturing and other industries marked time. Eight days ago, the steel board gave the President its report. It recommended:
(1) No wage increase. The board said a steel increase would probably set a "pattern" for industry, "with adverse effects upon the general economy"
(2) A pension and welfare plan to be paid for by the management. The board set the cost at 6 cents an hour for pensions (to provide $100 a month, including Social Security benefits) and 4 cents for welfare.
-Favorable First Reaction
The immediate reaction to the board's proposals seemed favorable. Mr. Truman asked the two sides to extend their truce. On Monday Mr. Murray extended the truce eleven more days and accepted the recommendations "as a basis on which to conclude a settlement." In industry the predominant feeling seemed to be one of relief that no wage increase had been recommended. Some major steel companies agreed to resume collective bargaining. Benjamin F. Fairless, president of the United States Steel Corporation, largest concern in the industry, agreed to a new "attempt to arrive at some mutually satisfactory solution." Hopes arose that strikes in steel and elsewhere would be averted.
The hopes were quickly dissapated. On Wednesday and Thursday Mr. Murray and Mr. Failess exchanged sharply worded telegrams. These were the exchanges:
MURRAY: "I now request that you promptly and plainly advise me whether your companies are * * * willing to accept the recommendations of the steel industry board as a basis on which to conclude a prompt settlement * * *."
FAIRLESS: "We understood * * * that there would be no moral or legal obligation upon us to accept any recommendation which the board might make"
MURRAY: "The United States Steel Corporation [is] deliberately seeking to force a strike upon the union and upon the American people."
FAIRLESS: "The responsibility is yours, not ours."
Thus Mr. Murray seemed to be insisting that the industry make some form of advance commitment "on the basis of" the board's recommendations, and the industry was refusing to give it. In White House circles there was a feeling that the exchange was leading to fruitless recriminations. On Thursday at his news conference Mr. Truman took a conciliatory tone. He was asked whether he thought there was any difference between acceptance of the board's recommendations as a "basis of negotiation" and acceptance "outright." He said there was a decided difference. He seemed to be saying to the industry that it would not be committing itself if it agreed to negotiate.
-'Debate by Telegraph'
On Friday Cyrus S. Ching, chief Federal mediator, said the "debate by telegraphy" was "deplorable," that it was an argument about "the meaning of words". He invited both sides to meet with him tomorrow in Washington. Both sides quickly accepted. The Administration's feeling was that the quibbling might end once the two sides met in the same room.
On the specific issues at stake, these are the principal questions that are raised and the positions of the two sides:
*Are pensions the responsibility of industry, the Government, or both?*
Management says the primary responsibility is the Government's, but that it is willing to make some contribution.
Labor agrees that Government has a responsibility but says that management has neglected to press Congress to take action. Meantime, labor argues that it cannot afford to wait.
*Who should pay for pensions?*
Management says pensions should be "contributory"-paid for at least in part by the employers-in line with principles embodied in Social Security and many existing private systems. Otherwise, management says, the workers will lose their self-reliance and dignity. Mr. Fairless said the board's proposal was a "revolutionary doctrine of far-reaching and serious consequences."
Labor says management should pay the whole cost of pensioning aged workers, just as it pays the cost of replacing worn-out machinery. The fact-finding board, supporting labor's view, said: "There is no evidence * * * that workers in industries where the employer pays all are any less dignified or self-reliant than other workers * * *."
*What would be the economic effects?*
Management says company-financed pensions would have the same effect on production costs as a straight wage increase and would raise the cost of steel $3 a ton. Moreover, the cost would be imposed "for all time" and in depression the added burden might cause industry to collapse.
Labor says management can easily pay the cost out of its big profits, without increasing prices. Moreover, pensions and other forms of security would help sustain purchasing power and thus prevent deep depressions.