FEDERAL MEDIATION AND CONCILIATION SERVICE

STATEMENT OF JOSEPH F. FINNEGAN, DIRECTOR, ACCOMPANIED BY ROBERT H. MOORE, DEPUTY DIRECTOR; WALTER A. MAGGILO, DIRECTOR OF MEDIATION ACTIVITY; L. E. EADY, DIRECTOR OF ADMINISTRATIVE MANAGEMENT; AND JAMES J. DINNENY, ASSOCIATE DIRECTOR, ADMINISTRATIVE MANAGEMENT

APPROPRIATION ESTIMATE

"For expenses necessary for the Service to carry out the functions vested in it by the Labor-Management Relations Act, 1947 (29 U.S.C. 171–180, 182), including expenses of the Labor-Management Panel as provided in section 205 of said Act; expenses of boards of inquiry appointed by the President pursuant to section 206 of said Act; temporary employment of arbitrators, conciliators, and mediators on labor relations at rates not in excess of $75 per diem; and Government-listed telephones in private residences and private apartments for official use in cities where mediators are officially stationed, but no Federal Mediation and Conciliation Service office is maintained; [expenses of attendance at meetings concerned with labor and industrial relations; $3,650,000] $3,949,000."

1

HOUSE REPORT

Senator HILL. The House report comments as follows:

The Federal Mediation and Conciliation Service, salaries and expenses. The bill includes $3,905,400, a reduction of $43,600 from the request, and $26,800 more than the appropriation for 1959. The reduction recommended is equal to the nonrecurring expenses for rents and equipment which occurred in the current fiscal year.

Mr. FINNEGAN. I think the cut which the subcommittee recommended of about $43,600 would be taking it right off the bone. It is not fat.

Senator HILL. You had better make a good statement here why you feel that way about it, Mr. Finnegan.

Mr. FINNEGAN. I will attempt to do so. I have not prepared any formal submission. I thought I would talk off the cuff and try to give you a picture of why I think that this year, above all years, our appropriation should be left intact.

COMPARISON OF 1958 AND 1959 WORKLOADS

From July 1958 through April 1959, we have had 1,401 strikes against about 1,000 for the comparable period of the previous year, and about a thousand for the comparable period before that.

During the period from July 1958 through April 1959 these 1,400 strikes involved 1,359,000 people as against 483,000 people for the comparable period of last year.

Senator HILL. Over twice as many.

Mr. FINNEGAN. Over twice as many.

So far in the first 9 months of this fiscal year, we have handled as many cases as we handled in our entire previous fiscal year.

Senator HILL. You mean up to now, this fiscal year, you have had as many cases as you did altogether in fiscal year 1958?

Mr. FINNEGAN. That is right.

Also, at the present time, from July 1, 1958, to March 1959, we closed out a total of over 4,900 cases, 786 more cases than the comparable 9 months in the previous fiscal year.

Those are finished mediation cases.

PENDING CASES

In our pending cases, we have pending as of March, 4,100 cases, against 2,600 for that same time as of last year.

In other words, an increase of about 52.8 percent.

I would like to talk to you a bit about the detail of this situation; why it came about.

During the late depression or recession, whatever term one wants to apply to it, a lot of employers learned that you make money not necessarily by sales. Sometimes if you can't make it by sales, you make it by effecting economies. They attempted to squeeze out of their operations a lot of water which had crept in in good times and which they could then tolerate.

As things are picking up, there has been quite an improvement in the economy, the unions are trying to get their bite. The unions are trying to get the increases which they had to forego last year, not

through any feeling of philanthropy, but because of the economics of the situation.

The employers on the other hand are trying to hold on to the gains they made in economies, automation, plant layout, and so forth, during the period when they had to make their profit out of expense saving rather than increased sales.

WORK STOPPAGES, 1959

Let's have a brief look at some of the stoppages that have occurred thus far in fiscal 1959, and we have 2 months still to go.

Take the Pittsburgh Plate Glass strike which lasted 18 weeks. We had 3 mediators on it, 55 mediation sessions.

Excello Products; the strike lasted 18 weeks, 23 mediation sessions. Petroleum industry negotiations which were led off by Sinclair where 10,000 employees were involved. We had 2 commissioners assigned to the Sinclair case and 13 mediation sessions.

Twenty-two other mediators worked with the balance of the petroleum industry covering over 600 local contracts and more than 100,000 workers at the local level.

Undoubtedly you are familiar with the recent newspaper strike of last December in New York City, resulting in a 19-day printed news blackout, affecting 20,000 employees and total daily circulation of 512 million and Sunday circulation of 8 million.

The New York Times published an estimated cost of the strike for the industry of $50 million.

Reynolds Metals Co. has a plant in Sheffield, Ala., three in Louisville, Ky. There was an unauthorized stoppage there involving the intervention of our mediators who were successful in getting the thing worked out.

Senator HILL. How long did that strike last?

Mr. FINNEGAN. About 2 or 3 days. It was on a grievance, an unauthorized work stoppage. We were able to finally get the union to avail itself of the grievance machinery.

We had a 39-day strike in the trucking industry on the west coast.
We had 3 commissioners who met with the parties 30 times.

Now, what is the picture coming up?

Senator HILL. What about the future, this next year?

POSSIBLE FUTURE STOPPAGES

Mr. FINNEGAN. That is what I am coming to now, Mr. Chairman. That was the past.

Trends in labor relations do not follow any fiscal year boundaries. In the steel industry we have between a half and three-quarters of a million employees. That contract ends on July 1, as you know.

We have the aircraft industry contract coming up in September involving a quarter of a million people; the maritime negotiations coming up in September, involving the entire east and west coast, as well as the gulf. This time they are coterminus.

Senator HILL. It involves all of our maritime industry?

Mr. FINNEGAN. That is right.

Senator HILL. How many people will be involved?

Mr. FINNEGAN. About 45,000 directly. Indirectly you will have many times that number.

Three years ago we had a Taft-Hartley injunction in that case. Bob Moore chaired a mediation panel. He went up for a day or two or a week; he came back 3 months later.

We also have coming up the General Electric negotiations in September involving 83,000 employees and the Westinghouse Electric negotiation, involving 55,000.

So you have about a million and a half people, better than that, directly involved in labor contracts that will be up before September of this year.

I have left out meatpacking, which involves 60,000, which comes up in August and the aluminum industry which comes up in July, which is tied into the steel negotiations of course. The aluminum industry involves directly 45,000, but again many times that number indirectly to suppliers and the peripheral effects of a stoppage.

EFFECTS OF CUT IN REQUESTED FUNDS

So I think any attempt at this time to cut the mediation appropriation would be penny wise and pound foolish because in one day's stoppage alone, in any of these industries, many times our budget would be lost to the Government in taxes, to say nothing of the effect on the economy as a whole.

When we prepared this budget, Senator Hill, we cut it right down to the nub. We had taken a very substantial slicing in the Bureau of the Budget. We took a cut of $281,000 from the Bureau of the Budget.

FACTS OF BUDGET

Our total requested appropriation now is $70,000 in excess of what it was last year, largely a question of salary increases over which we have no control.

Senator HILL. What amount is attributed to salary increases?
Mr. EADY. That entire amount.

Senator HILL. If you got this cut of $43,600 you would be sliced under what you had this year?

Mr. EADY. That is right.

As a result of the reduction by the Bureau of the Budget we purposely tried to protect or retain the mediator staff. We could not take a reduction in that category. So we applied the reductions to the two which you have mentioned, rental cost, and equipment cost. We accepted cuts in those categories in order to retain our mediator personnel.

Senator HILL. Those cuts were made by the Budget?

Mr. EADY. Made by the agency as a result of the Budget Bureau determination on total amount.

Senator HILL. They are reflected in the budget estimate; is that right?

Mr. EADY. Yes, sir.

PERSONNEL INCREASE

Senator HILL. Your budget this year does not provide for any additional personnel.

Mr. EADY. There is an increase of eight positions.

Senator HILL. Where would they be?

Mr. EADY. TWO would be mediator positions and the remaining six would be clerical and administrative positions.

Senator HILL. Yes.

Mr. FINNEGAN. That addition in the clerical or administrative staff, Senator Hill, probably needs a little comment. With this increase of 52.8 percent in our pending cases, it means just that much more paper to be typed, filed, handled, and processed. It is a papermill operation when you get an increase of that proportion.

When I came down here in 1955 the Service had 231 mediators. We now have a basic staff of 210.

Actually, we are at the present time down to 201 because we have been trying to pull in our horns.

ABSORPTION OF PRIOR PERSONNEL CUTS

While we accepted the cut in rental allowance and so forth, a large part of the reason why we were able to absorb the personnel cut is because we could consolidate field positions, put the mediators in offices instead of working out of their homes where they operated before.

The result is that a man can handle two meetings a day instead of one and by bringing the parties into his office instead of having to travel 100 or 200 miles to handle a case.

A large part of our personnel economies have come from spending more money on rent.

I would rather have a small agency that can really operate efficiently and tightly and keep it at a maximum efficiency as it were, than to have mediators sitting around like firemen wating to put out fires. We cannot stockpile our business. We have to give a case attention when it pops up.

I think Mr. Eady wanted to say something about the supplemental pay allowance.

Senator HILL. All right, sir.

SUPPLEMENTAL ALLOWANCES

Mr. EADY. The estimate for the 1959 supplemental allowance was $299,000 when it was originally prepared. We later agreed to absorb $45,000 of that amount.

The House cut of 10 percent amounted to another $25,000. Actually those reductions from expenditures which would normally be made this year equal the difference in appropriations for 1959 and 1960. Senator HILL. These additional eight people you contemplate putting on, what is the cost of those eight people?

Mr. EADY. $39,000 the first year.

In applying the 1960 appropriation $43,000, in addition to new positions, we would be prevented from filling mediator position vacancies which we now have. Positions would necessarily have to be kept vacant in order to absorb the cut.

Senator HILL. You feel that you very much need these people in these vacancies, these additional people?

Mr. FINNEGAN. It seems to me that in view of this trend what has been in evidence since last July, and which has continued right up to