B-11 RESOLUTION OF SENATE COMMITTEE ON LABOR AND PUBLIC WELFARE, APRIL 24, 1967 Whereas the representatives of management and labor have today appeared before the Senate Committee on Labor and Public Welfare together with the Special Mediation Panel and the Secretary of Labor; and Whereas the Committee having heard the witnesses has given careful consideration to the testimony and the facts relating to the national emergency which would arise in the event of a stoppage of the railroads in the event of a national strike by the shopcraft unions; and Whereas the Committee has taken due note of the authority of the President and the Congress in the premises, and Whereas, the Special Mediation Panel has performed its task deligently and with due regard to the interests of the parties and the public, and has suggested a possible basis for settlement. Now, therefore, be it Resolved: That the management of the railroads and the leadership of the six shopcraft unions now involved in a labor dispute owe it to the national interest and security promptly to settle their dispute through collective bargaining by coming to an agreement; and be it Further resolved, that the Committee calls upon the parties to seriously reconsider as the basis for settlement the recommendations of the Special Mediation Panel, and be it Further resolved that the Secretary of Labor shall inform the Committee, at the earliest appropriate time, as to the positions of the parties on the recommendations and on the progress of their negotiations, and be it Further resolved that the Special Mediation Panel shall continue to make itself available to assist in the negotiations at the request of the parties. B-7 [Letter to the President] REPORT OF THE SPECIAL PANEL APPOINTED BY THE PRESIDENT IN THE RAILROAD SHOPCRAFT-CARRIER DISPUTE The PRESIDENT, The White House, Washington, D.C. APRIL 22, 1967. DEAR MR. PRESIDENT: On April 11, 1967, the Congress passed and on April 12 you signed S. J. Res. 65 to extend for 20 days the status quo period under the Railway Labor Act in connection with the current railroad shopcraftcarrier dispute. Immediately after the enactment of this resolution you appointed this special mediation panel to assist the parties in attempting to resolve their differences. Attached hereto is a report of our mediation activities to date including our Mediators' proposal given yesterday to representatives of the carriers and the unions. Sincerely, CHARLES FAHY, Chairman. REPORT OF THE SPECIAL PANEL APPOINTED BY THE PRESIDENT IN THE RAILROAD SHOPCRAFT-CARRIER DISPUTE In the face of a threatened nationwide shutdown of the railroad industry, after all of the procedures of the Railway Labor Act had been exhausted. the President requested the Congress to extend the status quo by twenty days, or through the close of May 2, 1967. This dispute involves virtually all of the nation's railroads and six shopcraft unions. In his message to the Congress requesting the extension, the President stated he would appoint a special panel of mediators. After Congress provided this extension in S.J. Res. 65, on April 12, 1967 the President appointed this special panel "to help the parties mediate their differences, and if the parties should fail to reach agreement, to recommend whatever additional action may be necessary." Emergency Board No. 169, established under the Railway Labor Act, provided a framework of recommendations to the parties for the resolution of the dispute in its report dated March 10, 1967. In certain major respects its recommendations were not definitive in proposing solutions to the issues in dispute for it contemplated that further collective bargaining by the parties themselves would fill in the essential details for a settlement. The parties have been unable by negotiations and mediation to complete such an agreement. This special panel has sought to assist the parties in effectuating a final settlement. We have been steadily in session with the parties, seeking a voluntary resolution of the impasse through collective bargaining. The representatives of the labor organizations and the carriers have been fully cooperative. The panel has also consulted with and had the assistance of various government representatives. The panel presents this report on the present status of the dispute as well as its proposals for a voluntary agreement. WAGE INEQUITIES At the early stages of our mediation efforts the core of this dispute concerned the relationship of the wages of shopcraft journeymen and mechanics in rail roads to the wages of employees performing similar work in outside industry. The Emergency Board also saw this issue as the central problem. As a result of almost 30 years of collective bargaining agreements, which provided for equal cents-per-hour increase to all non-operating employees, a wage differential has developed between the railroad shopcraft mechanics and wages for comparable work in outside industries. Lower skilled jobs in the railroads received the same cents-per-hour increases over this period as higher skilled jobs. Today the hourly rates of shopcraft laborers average in the range of $2.50 or $2.60 an hour compared to about $3.05 an hour for electricians, machinists, sheetmetal workers and other mechanics and journeymen. High employment levels and tight markets for skilled labor in recent years in industry generally have tended to increase in outside industry the wage rates of journeymen and mechanics compared to other workers. (The Emergency Board refers to these wage inequities as wage compression.) As Emergency Board 169 reported, "Both parties agree that there is a serious wage compression and that it cannot be corrected in a single step." The labor organizations estimated to the Emergency Board the differential in wages between railroad mechanics and those with comparable skills in other industries to be in the order of 40 to 50 cents an hour and to us they used the estimate of more than 60 cents an hour. They seek a "down payment" in these negotiations toward the elimination of the differential. The carriers suggest that in the wage rate schedule of shopcraft employees as a whole some wage rates are relatively too high as well as others too low as a result of equal cents-per-hour increases in the past. They accept the procedures proposed by the Emergency Board to determine wage rates for comparable work both inside and outside the railroad industry and to make wage rate adjustments, both up and down. The parties thus proposed somewhat different ways of implementing the report of the Emergency Board. The carriers in mediation, provided agreement were reached, have been willing to negotiate the elimination of inequities through the approach proposed by the unions. The central issue at the early stages of our mediation appeared to be the size and timing of the first steps, in cents-per-hour, to be taken during the term of the agreement currently under negotiations to remedy a problem created by the pattern of agreements during the past 30 years of negotiations. DURATION AND GENERAL INCREASE As our mediation proceeded, it appeared that the dispute over the duration of the agreement 1 and the amount of the general wage increase was the major roadblock to concentration upon the wage inequity issue as outlined above. Most of our mediation effort was concentrated on the issue of duration and the general increase. Indeed, it is our considered judgment that if the duration and the size of the general wage rate increase, expressed in percentage terms, could be resolved. the amount of the adjustment to correct the wage inequity could readily be resolved. Our mediation has, of course, concerned the issues in dispute as a whole, but the most intractable problem now concerns the duration of the agreement and the amount of the general wage increase. The carriers propose, as recommended by the Emergency Board, a 5 percent wage increase for 1967. The labor organizations propose, provided agreement is reached, a wage increase of 61⁄2 percent for 1967 and 5 percent for 1968, with health and welfare benefits, other fringe benefits and conditions of employment subject to notice and additionally, wage differentials for certain crafts subject to further negotiations under notices already served. The Emergency Board recommended a 5 percent general increase in 1967 and left unspecified and subject to a possible further emergency board the amount of a general wage increase for 1968. At the same time the report appeared to freeze all other money issues during the two-year period. Our mediation efforts have explored all these areas, including the possibility of a wage rate increase for a period of 18 months or through June 30, 1968. 1 In the railroad industry duration is expressed in terms of the date before which notices may not be served in accordance with the procedures of the Railway Labor Act and often a date before which no change in wages or other conditions or employment may be made effective. On the union side there are significant differences in the composition of the six unions. All of the six unions include both skilled workers and some unskilled, and an inequity wage adjustment, above the general wage increase, would create some difficulities with those lesser skilled workers not receiving the added inequity adjustment. For the six unions as a group, approximately 100,000 out of 137,000 workers would receive the inequity adjustments proposed by the unions. But one of the unions is comprised largely of other than journeymen and mechanics and would participate scarcely at all in any wage inequity increase as proposed by the unions. Under a unanimity rule, the labor organizations as a group have sought both a substantial "down payment" on the wage inequity and a higher general wage increase so that even the unskilled in their ranks can better their relative position. This factor has complicated the negotiations over the duration of the agreement and the size of the general increase. The carriers are opposed to a higher general wage increase than 5 percent for 1967 on which basis they have settled all other major collective bargaining agreements in the industry except for two still to be completed. They point out that additional funds are likely to be required for health and welfare premiums in 1968 and they are unwilling now to complete an agreement on wages for the year 1968 which would leave labor costs so uncertain. In this serious impasse in collective bargaining this panel has explored all the proposals of the parties and has made many informal suggestions for the consideration of the parties. As a result of this exploration, this special panel has concluded that the most appropriate mediation proposal to the parties for a final resolution of the dispute is that which is attached. The panel believes that this proposed settlement is not inconsistent with the Emergency Board report and might well have been achieved by the parties had their own collective bargaining consummated an agreement. The panel is of the view that this mediation proposal best accommodates the conflicting needs of all the parties and is consonant with the public interest. It recognizes the inequity of wage rates for journeymen and mechanics while at the same time it preserves the integrity of the settlements already achieved in the industry. It seeks in its distribution of the inequity adjustment through the 18month period to provide the maximum amount of correction to the wage rate inequity while at the same time moderating the cost impact in the period. We ask the parties to agree now to our suggested basis for settlement of this dispute. The matter is one of dollars and cents alone, and the real differences between the parties in our judgment are not great. We cannot say our proposals contain precisely the correct figures; but we can say our terms are reasonable and not unjust. There is no way in which perfect precision about a matter of this kind can be reached. To carry the dispute further, in light of the consequences of doing so, would not be justifiable, especially after so much consideration has been given to the matter. Acceptance of the terms we propose would be a far better thing for all than a tragic industrial war over what differences now remain. Moreover, those differences are not so serious that they should be the occasion for further legislation by the Congress. Unfortunately, as of this time, neither party has accepted our proposal. May this dispute now be ended, peaceably and in good will. CHARLES FAHY, Chairman. JOHN T. DUNLOP, Member. GEORGE W. TAYLOR, Member. MEDIATION PROPOSAL SHOPCRAFT-CARRIER DISPUTE 1 1. A general wage rate increase of 6 percent effective January 1, 1967 for 18 months. Notices on basic wage rates may be served any time after April 1, 1968, and any change may be effective only on or after July 1, 1968. Any notice may be served, however, on other money items or rules. 2. Additional wage rate increases for journeymen and mechanics classifications as follows: April 1, 1967, 5 cents; October 1, 1967; 5 cents, April 1, 1968, 5 cents. 1 This proposal is predicated on the view that the parties are in agreement on vacation improvements as recommended by the Emergency Board and that all other notices served by either party in this dispute should be withdrawn. B-8 STATEMENT BY THE PRESIDENT ON THE RAILROAD DISPUTE On January 28, 1967, I appointed an emergency board under the Railway Labor Act to investigate the dispute between virtually all of the nation's railroad carriers and six shopcraft unions representing 137,000 employees. That board transmitted its report and recommendations to me on March 10. The carriers accepted the board's report. The unions, however, rejected it and the no-strike period under the Railway Labor Act was scheduled to expire at 12:01 a.m. on Thursday, April 13. On April 10, I sent a message to the Congress recommending that it enact a Joint Resolution extending the no-strike period for an additional twenty days. On April 11, Congress passed that resolution by an overwhelming vote. I signed the resolution April 12, and the period of statutory restraint was thus extended to 12:01 a.m. on May 3. I immediately appointed a special panel of distinguished Americans: Judge Charles Fahy, recently retired Judge of the United States Court of Appeals for the District of Columbia; Dr. George W. Taylor, Professor of Industry at the University of Pennsylvania; and John T. Dunlop, Professor of Economics at Harvard University. I asked this panel to help the parties mediate their differences and if the parties should fail to reach agreement to recommend whatever additional action may be necessary. Since their appointment on April 12, this special panel has been working around the clock with the unions and the railroads and conferring among themselves to help the parties reach a voluntary settlement. Today, the panel reported to me that the parties have not yet been able to reach agreement. They have also not accepted a proposal offered by the panel around which a settlement could be shaped. The panel reports that the parties are not far apart: that no basic principles stand in the way of settlement and that the differences over wage increases are not of great magnitude. On the key issue of a general wage increase, for example, the unions seeks a 6.5% increase for 1967 and a 5% increase for 1968. The railroads have offered a 5% increase for a one-year period. The panel has recommended a 6% increase over an eighteen-month period. On the matter of correction of wage inequities for skilled workers, the panel proposed a gradual adjustment of three 5¢ per hour payments during the eighteen-month period. I know of no better way to describe the situation than in the words of the panel's report, which I am releasing today: "The matter is one of dollars and cents alone, and the real differences between the parties in our judgment are not great. . . To carry the dispute further, in light of the consequences in doing so, would not be justifiable, especially after so much consideration has been given to the matter. "Acceptance of the terms we propose would be a far better thing for all than a tragic industrial war over what differences now remain. Moreover, those differences are not so serious that they should be the occasion for further legislation by the Congress. Unfortunately, as of this time, neither party has accepted our proposal. "May this dispute now be ended, peaceably and in good will." I have already informed the Congress and the American people, in my message of April 10, of the tragic consequences of a nationwide railroad strike. The cost is incalcuable-food shortages would occur, health hazards would develop, factories would close and workers across the Nation would be idled. Our prosperity would be seriously imperiled. Beyond this, the impact of a railroad stoppage on our efforts to support the 500,000 valiant servicemen in Southeast Asia make it abundantly clear that a strike at this time cannot be tolerated. I am making the panel's report public because it is important that the American people and the parties weigh the impact of a rail strike against the narrow |