NATIONAL AND EMERGENCY LABOR DISPUTES WEDNESDAY, APRIL 30, 1952 UNITED STATES SENATE, COMMITTEE ON LABOR AND PUBLIC WELFARE, The committee met, pursuant to call, at 2:30 p. m., in the old Supreme Court room, the Capitol, Senator James Murray (the chairman) presiding. Present: Senators Murray, Humphrey, Lehman, Pastore, and Morse. Present also: William H. Coburn, clerk; Ray Rodgers, assistant clerk; Jack Barbash, staff director and Merton Bernstein, counsel, Subcommittee on Labor-Management Relations. The CHAIRMAN. The hearing will come to order, please. I regret to call you back here, Mr. Feinsinger, inasmuch as you are under such great pressure these days. We would like to avoid putting you to the additional burden of coming here again in regard to the steel dispute and the seizure situation. We will be glad to hear from you. STATEMENT OF NATHAN P. FEINSINGER, CHAIRMAN, WAGE STABILIZATION BOARD-Resumed Mr. FEINSINGER. Thank you, Mr. Chairman. With respect to your kind remarks, let me assure you I did not take this job for my health. On testifying here, to throw whatever light on the very serious problems with which this committee and others are being called upon to grapple, I had expected to have this morning free to complete a prepared statement, but unfortunately I was not able to do that because the House Banking and Currency Committee asked me to return this morning to help them a little bit. So with your permission I would like to submit a prepared statement later on as soon as it is completed. The CHAIRMAN. That will be satisfactory and it will be printed in the record. (The statement referred to is as follows:) STATEMENT OF NATHAN P. FEINSINGER, CHAIRMAN, WAGE STABILIZATION BOARD, PREPARED FOR PRESENTATION TO SENATE COMMITTEE ON LABOR AND PUBLIC WELFARE, WEDNESDAY, APRIL 30, 1952, at 2 p. M. On Tuesday, April 15, I appeared at the invitation of this committee to discuss the steel dispute in relation to S. 2999 and S. 3016. I have been asked to present further testimony today, including comment on prepared statements and testimony submitted to your committee on April 22, 1952, by Mr. John A. Stephens, vice president of industrial relations, United States Steel Co., and on April 22 and April 23, 1952, by Mr. John C. Bane, Jr., an attorney for various steel companies, who performed a valuable service as an industry member of the special tripartite panel appointed by the Wage Stabilization Board in the steel dispute. Mr. Stephens dealt mainly with statistical aspects of the Board's recommendations in the steel case. Mr. Bane, besides repeated personal attacks on the public members, which I do not intend to answer, testified mainly with respect to the Board's procedures. ORGANIZATION AND PROCEDURES OF THE WAGE STABILIZATION BOARD I believe that I can be most helpful to the committee at the outset by describing the organization of the Wage Stabilization Board, its purposes and its procedures, and then follow with a review of the steel case in relation thereto. Any comments I might have concerning the statements and testimony of Mr. Stephens and Mr. Bane I shall make as part of that review. I shall conclude with a few remarks about S. 2999 and S. 3016. TRIPARTITE CHARACTER OF BOARD The Wage Stabilization Board is tripartite in character, as was the War Labor Board in World War II. The Board consists of 18 regular members and 6 alternate members, representative in equal numbers of the public, management, and labor. Each member of the Board is appointed by the President after full investigation of his background, experience, and qualifications in the field of labormanagement relations. Appendix (I) contains a biography of each member of the present Board. A tripartite Board is best suited to deal with the problems of wage stabilization and labor disputes in a defense emergency. Wage stabilization is not conducted in a vacuum. As Congress wisely foresaw, its administration has a direct effect upon the purchasing power of the dollar, upon collective bargaining, upon the maintenance of industrial peace, and upon the attainment of maximum production. The balancing of these various factors requires an understanding of the day-to-day problems of labor and management and a realistic appraisal of the impact of the Board's actions on their basic relations. Such an understanding or appraisal is not possible except through direct participation by representatives of labor and management in the formulation and administration of the Board's wage policies. Moreover, such participation, with equal voting rights, insures the maximum degree of acceptance of governmental intervention by labor, management, and the general public, in an area normally left to free collective bargaining. It is noteworthy that of the 21 regulations adopted by the Board, which together constitute the Board's complete, basic stabilization policies, action was unanimous in all but five. There is grave risk in proposals now being considered which would destroy in whole or in part the tripartite nature of the Wage Stabilization Board by the substitution of an "all public" board, or a board in which the representatives of labor and management would be reduced to an inferior status in terms of voting rights. The public interest requires that no such radical change be made, certainly not hastily or without full consideration of the consequences. The Board's jurisdiction in voluntary cases stems from title IV, Wage Stabilization-Objectives and Procedures of the Defense Production Act of 1950, as amended. In stabilizing wages, due regard is to be had to the preservation of the purchasing power of the dollar, the maintenance of sound working relations, including collective bargaining; the prevention and settlement of labor disputes: and the achievement of maximum production for defense. Regulations or orders are to be "fair and equitable" and such as to effectuate the purposes of title IV. In administering wage controls, such adjustments are to be made as are deemed "necessary to prevent hardships or inequities." The Board acts through the adoption of general policies issued in the form of regulations and resolutions, and through rulings or orders issued in particular cases, including cases where wage adjustments, whether or not assigned to particular regulations or policies, are shown to be necessary to avoid hardships or inequities. Congress did not intend that wage stabilization be conducted by arbitrary or slide-rule methods, nor does the Board purport to operate in that way. For example, in the General Electric case, the Board on March 16, 1952, unanimously approved a joint employer-union petition for an adjustment of 2.5 percent, equivalent to about 4 cents an hour, because the employer in that case had traditionally followed certain electrical firms in making its wage adjustments from time to time. This action was not attributed to any specific regulation but was taken in order to avoid undue hardship in the particular case. HOW THE BOARD OPERATES It might be helpful to this committee if I were to give you a birdseye view of how a tripartite board operates. The Board itself sits in Washington, D. C. It has 14 regional boards having a similar tripartite structure. The Board in Washington handles some cases directly and others on appeal from the regional boards. The National Board is assisted by a Tripartite Review and Appeals Committee, consisting of people with a practical background in wage stabilization and labor-management relations. Each section of the National Board has a set of offices. Both the labor members and the industry members have their own assistants who give advice daily to workers or their representatives, or to employers. In addition, there is a Board staff consisting of a legal office, a case-analysis office, an economic analysis office, an administrative management office, and others. Voluntary petitions are processed by the staff acting under the supervision of the Board. Some cases are processed through the Review and Appeals Committee. Where action in that Committee is not unanimous, the cases are considered by the Board itself. The Board as a rule operates by divisions. Two or more divisions may operate at the same time. A "full Board" consists of 12 members, 4 from each side. In a discussion of general policies as well as in considering action in particular cases, a tripartite board has the advantage of first-hand information as to the practical needs of the employers and employees and of the possible unstabilizing effect of any action that is proposed. The action is taken as a rule only after full consideration and debate. Much of this consideration occurs outside formal meetings of the Board. On important matters, tripartite Board committees are established which work together with the staff in a preliminary analysis of the problems involved and an appraisal of the projected action. Many of the discussions are informal and take place in the office of one of the public members assigned to the particular problem. Quite often, the matter is not brought into the full Board until all points of view have been explored, and the matter is ready for final action. At times, no formal Board meeting is held until the matter is virtually ready for a vote. By that stage, each member of the Board is fully aware of the views of the other members and further debate would merely provide an opportunity for speeches for the record. Dissents are frequently for the record only even where dissents are on matters of substance and accompanied by a dissenting opinion, the opinion is more likely than not, in terms of the vigorous expressions usually appearing therein, a reflection of the emotions of the losing party. As a rule, when the case has been disposed of, the Board moves on to the next item of business without the slightest rancor. I might point out, parenthetically, that the volume of work turned out by the Board since the Steel case compares favorably with the volume of work turned out at any comparable period in the past. All of us realize that we have a job to do, and there is no difficulty in closing ranks and proceeding to the next order of business without serious loss of momentum. VOTING STATISTICS As an indication of the cooperation within the Board (and in answer to those who charge the Board with a prolabor bias), I might point out that the 21 general wage regulations adopted by the Board so far, 16 have been unanimous, 3 have had a labor dissent, 1 has had an industry dissent, and 1 has had a partial dissent by labor and a partial dissent by industry. The figures on Board resolutions are similar. I think this is a truly remarkable record. Over 99 percent of the cases coming before the Board to date involve voluntary petitions by employers, or employers and unions jointly, seeking approval of wage adjustments. Likewise, with respect to Board action in particular cases, as I have testified previously, the National Board has been unanimous in almost 93 percent of its rulings or orders, with labor dissenting in nearly 5 percent and industry in less than 3 percent of the cases. Incidentally, more than 50 percent of the cases involving voluntary petitions for approval come from nonunion employers. This remarkable record is accomplished despite the tremendous pressures exercised on the labor and management representatives of the Board by employees or unions and employers who feel that their petitions have merit and should be granted in full. It should be remembered that when the Board modi fies a petition for approval in whole or in part, it is telling the employees that the boss cannot give them a wage increase even though he is ready and willing to do so, and that it is telling employers and unions that they cannot carry through an agreement reached through voluntary collective bargaining. Notwithstanding these pressures, the Board has modified wage increases voluntarily proposed or worked out through collective bargaining, in 14.4 percent of all the cases disposed of by the Board to date. JURISDICTION OVER DISPUTES CASES The Board's jurisdiction in dispute cases stems from Executive Order 10233 issued April 21, 1951, amending Executive Order 10161. This order follows the safeguards proposed by section 501 of title V of the Defense Production Act, although the Board was not established under the authority of that title. THE INADEQUACY OF TAFT-HARTLEY ACT PROCEDURES The Board was given disputes jurisdiction because normal, peacetime methods of settling disputes have inherent limitations. The Taft-Hartley injunction, for example, is available only in cases which affect the "national health and safety" and which involve "an entire industry or a substantial part thereof." Many of the cases which have come to the Board, e. g., Douglas Aircraft, Boeing Aircraft, American Smelting & Refining, would not have satisfied this jurisdietional requirement. Moreover, a Taft-Hartley injunction procedure starts with a board of inquiry, which, unlike the Wage Stabilization Board, is not authorized to make recommendations for settlements. TITLE V AND DISPUTES PROCEDURES Congress itself recognized that an effective wage stabilization program is inseparable from an effective program for the prevention or settlement of labor disputes. Thus title V, section 501 of the act states: "It is the intent of Congress, in order to provide for effective price and wage stabilization pursuant to title IV of this act and to maintain uninterrupted production, that there be effective procedures for the settlement of labor disputes affecting national defense.” Title V authorized the President, following a public-labor-management conference which envisaged a broad no-strike, no-lock-out pledge, to designate an agency to carry out the purposes stated in section 501. The President has not thus far exercised the authority so conferred, presumably because of his reluctance to invoke a no-strike, no-lock-out pledge and to confer broad powers on some agency similar to the powers conferred upon the War Labor Board in World War II, The President has, however, acting on the advice and recommendations of the National Advisory Board on Mobilization Policy, conferred a limited disputes jurisdiction upon the Wage Stabilization Board. THE USE OF AD HOC BOARDS The President conferred disputes jurisdiction on the Wage Stabilization Board rather than establish another agency for that purpose. This was a sensible decision, in my judgment, because the recommendations of some other agency would have had to be submitted to the Board for approval whenever stabilization questions were involved. If the wage recommendations of a separate disputes agency, e. g., an ad hoc Board, were submitted to the Wage Stabilization Board after they had been formulated, the result would be, at minimum, duplication, delay and unrest. If the Wage Stabilization Board should modify the recommendations of the ad hoc board, the result would almost certainly be to create an economic disturbance, perhaps a strike. If, on the other hand, the ad hoc board sought an advisory opinion from the Wage Stabilization Board while it was formulating its recommendations, this would deny to the parties most concerned, i. e., the employer and the union, the opportunity to present to the Wage Stabilization Board their views as to the approvability of a wage recommendation under stabilization policies. This would amount to a denial of due process. I think it also important to point out that a series of ad hoc boards set up to deal with particular disputes might well result in inconsistency of treatment in similar types of cases. These facts, I suggest, should be given most careful consideration before any proposal to substitute ad hoc boards in place of the Wage Stabilization Board is adopted. I will return to this point when I discuss S. 2999 during the last part of my statement. The Board can exercise its disputes jurisdiction only in cases (1) not resolved by collective bargaining, or by the prior full use of mediation and conciliation, and (2) which threaten an interruption of work affecting the national defense. In addition, the Executive order prohibits the Board from taking ány action inconsistent with any applicable laws, including the Labor-Management Relations (Taft-Hartley) Act of 1947. The order also requires that any wage action taken by the Board "shall be consistent with stabilization policies." The Board cannot act on its own motion but only in cases certified by the President or voluntarily submitted by the parties. In cases certified by the President, the Board can only make recommendations for a fair and equitable basis of settlement. In cases submitted by the parties, the Board can make recommendations or a decision, as the parties wish. The Board has no subpena powers and its recommendations are not legally enforceable. The jurisdiction of the Board to handle disputes, particularly those involving noneconomic issues, was considered and sustained in the first session of the Eighty-second Congress. Your committee approved the Board's exercise of disputes jurisdiction. In the House, the Lucas amendment, designed to limit the Board's jurisdiction in disputes cases, was defeated by a vote of 217 to 113. The same question is again before the Congress in the form of various proposals pending in the House and in the Senate. HOW THE DISPUTES PROGRAM HAS WORKED I am sure that this committee would be interested in knowing how the disputes program has worked thus far. The tension existing in the steel situation has tended to obscure this record. The President has thus far referred 12 cases and 22 cases have been submitted voluntarily for recommendation or decision. The Board has accepted nine of these cases and has rejected 6; 7 are awaiting Board action on acceptance or rejection. In every case but one referred by the President, the parties gave assurances of continued work and production while the case was pending before the Board. In such cases as those involving the American Smelting & Refining Co. and the Wright Aeronautical Co., both of which were Presidential referral cases, the Board's recommendations were accepted by the parties. Four of the cases voluntarily submitted have been settled on the basis of Board recommendation or decision, or under Board auspices. The Board still has pending before it a number of important cases including those involving the aluminum industry, the iron-ore industry, the oil industry, and an important segment of the brass fabricating industry. In all these cases work and production has been maintained pending recommendations of the Board. The same is true in all the cases voluntarily submitted to the Board, involving plants or groups of plants whose production is important to the defense effort. In some, if not most, of the cases certified by the President or voluntarily submitted by the parties, a Taft-Hartley injunction would not have been obtainable because the disputes did not involve "an entire industry or a substantial part thereof." Even where that jurisdictional test was met, the record shows that the voluntary procedures of the Board have succeeded in maintaining work and production for periods sometimes in excess of 80 days, the maximum obtainable under a Taft-Hartley injunction. The record of the Wage Stabilization Board in the prevention and settlement of disputes affecting the national interest has been a successful one. I am especially proud of the fact that this record has been established despite the lack of a no-strike, no-lockout pledge or the patriotic appeal of an all-out war, and in the absence of subpena rowers or other coercive measures. I trust that this record will not be overlooked in the current excitement over the steel dispute. As is to be expected, disagreements among various segments of the Board are much more frequent and intense in a dispute case than in a voluntary case. In the latter type of case, the employer and workers or their representatives both want the same thing, namely, approval of the wage increase for which they have petitioned. In a dispute case, however, naturally the employer and the union are at odds. In the handling of dispute cases, the industry and labor members of the Board perform a dual function. First, they exert their best effort to present the evidence and arguments of the employer or union in the most favorable light. Second, after extreme positions have been taken, all members of the Board cooperate in an effort to reduce the differences to the minimum, and if possible to find a common ground for agreement. |