practices for facilitating agreement-making which reduces the hazards of work stoppages.

In prenegotiation conferences, the announcement of extreme positions taken without regard to the problems faced by the other party, the fanfare of publicity departments, and charges and countercharges concerning the good faith of the other party only serve to widen the gap to be bridged, create artificial problems and multiply irritations and confusion. When extreme demands are sold to the membership and a strike vote is taken before negotiations start, or when company negotiations have similar restrictions placed on them by higher authority, the possibility of coming to agreement without a work stoppage is hindered. Such practices make it more difficult for union negotiators to make the concessions or to do the trading which may bring about a meeting of minds. They also may lead to stoppages to save face or to clear the atmosphere.

Dr. Taylor thinks that prenegotiation conferences are particularly valuable to obtain agreement on facts such as wages and profits actually being earned. This avoids break-downs because of opposing contentions on ascertainable facts and enables negotiations to start out with facts previously agreed to. Joint discussion of the problems faced by both parties and a review of the economic facts that affect both parties is a preparation for the formulation of demands in some industries with records for successful collective bargaining.

While varied approaches and procedures have been successful in the collective bargaining in different industries, better results are generally obtained from small negotiating committees, although as seen in the National Planning Association studies, "goldfish bowl" negotiations have also been successful. In some industries the easier items are taken up first in order to develop a climate of compromise and agreement, while in others the most critical issues are first tackled because, unless these are out of the way, there is no give and take on lesser issues. In some cases each element in benefit and cost is taken up separately, while in others an over-all increase in labor cost is first bargained out and then allocated to wages, pensions, and other benefits.

However, while no fixed procedure can be said to produce the best results, procedural questions of negotiation are of sufficient importance to warrant careful consideration so that the methods followed are in accordance with the need of a particular situation. Dr. Taylor's experience is that too little attention has been given to the advantages of a deliberate selection of the most appropriate methods of negotiation in the different situations. He has found that negotiators for each side may pursue methods so different as to make it impossible to arrive at agreement regarding substance. He concludes that positive results in collective bargaining will be more certain if the parties intelligently choose those procedures that narrow differences and avoid those that widen the gap between them.

If differences have not been resolved after prenegotiation conferences, agreement on the facts, and the selection of the best method of conducting the negotiations, assistance might be obtained in resolving their differences without a work stoppage by utilizing the services of a mediator or agreeing to submit the remaining matters of disagreement to voluntary arbitration. This has the advantages of an outside valuation of their position, of tapping the experience of other indus

tries, of obtaining a fresh viewpoint, and sometimes of modifying po sitions indirectly where no further direct concessions would have been possible. Various types of outside assistance can be called in and the particular form selected should be one calculated to be of most help in resolving remaining differences. Mediation and voluntary arbitration can facilitate agreement-making if the parties come to agreemen about the specific limits of the discretion extended to third parties and the criteria to be employed in arriving at decisions where volu tary arbitration is undertaken.

In Dr. Taylor's view of the matter, improvement in the results ob tained in collective bargaining will follow if the parties are convinced that their differences can and should be reconciled by understanding. compromise, and agreement, if they take the necessary steps to bridg their conceptual differences, and if they plan their procedures to facilitate coming to agreement. They must have a common under standing of the purpose of collective bargaining and of the nature e the issues and the needs of the parties which have to be reconciled In addition, they must develop the exact procedures and methods which narrow their differences and are calculated to facilitate the coming to agreement. The parties will normally want to avoid the risks and costs of work stoppages, but permitting them freely to exercise that right is the cost of leaving these vital matters to the parties directly affected and avoiding the even less acceptable results of the Government fixing of wages and prices.

CYRUS S. CHING: ERRORS MADE BY MANAGEMENT IN BARGAINING

Another observer who has been in the midst of numerous negotis tions and has valiantly endeavored to assist the parties to arrive at s basis of agreement is the present Director of the Federal Mediation Service, Mr. Cyrus S. Ching. Since so many references to breakdows in collective bargaining and strikes seem to imply that labor represents tives are principally at fault because of unreasonable demands, refusals to compromise or to attempt to understand the employers' problems. it is noteworthy that Mr. Ching, in an interview in Nation's Business in December 1949, was able to list eight "errors" made by employers and management in bargaining. According to Mr. Ching, these errors result in deadlocks and in failures in collective bargaining.

The first of these is the unwillingness or reluctance to barga collectively. Of course, agreement is hard to arrive at over the numerous issues which come up in collective bargaining, if one side o the other does not believe in the process, makes little effort to under stand the logic or force of the arguments of the other side, or take the steps necessary to bridge the distance between them. Close related to this is lack of confidence in the union and lack of understanding of its problems. He avers that many managements complain that unions do not understand their business sometime make no effort to understand how the unions must think of the specific issues which are the subject of the bargaining.

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The other six errors made by management representatives show in the approaches to collective bargaining and in the methods a practices employed. Among these is the lack of experience. Many companies do not place a knowledge of collective bargaining and is techniques high up among the requirements for executive posts and the

negotiators they select are not as trained and experienced as other executives handling sales, finance, or production. Related to this is the use of minor officials by management, while the union sends its best because negotiation over the terms of employment is its main business. Even where minor management officials may have reasonable skill and competence in negotiations with labor representatives, they have limited authority and insufficient discretion to compromise and bargain and must go back for approval on practically everything of consequence. Because of this, also, there is frequently a lack of leadership on the employer's side or rivalry may develop to impress the top officers. Mr. Ching also deplores the haphazard selection of lawyers as negotiators. He feels that they are likely to know less about the business or about actual conditions, that they may be sticklers for forms and expressions which arouse suspicion, or that they may gain technical victories which mean eventual defeat.

In the conduct of negotiations Mr. Ching has found that management representatives frequently lack information vital to the employees and to the thinking of their representatives. When, without having the facts, they also assume a general position of opposition and give way grudgingly to the case made by union representatives or to their demands, union representatives are encouraged in the cynicism that management just says "No" and yields only when it must. Unions almost universally have research staffs or employ experts in labor statistics and industrial relations. Mr. Ching believes that their cases are generally better prepared. Failure of the management side to do as well with the factual information vital to the negotiations is a handicap. Agreement on the facts facilitates understanding and a meeting of minds.

The final "error" made by employers and management in collective bargaining Mr. Ching finds to be too much emotionalism. This is revealed where some of the other "errors" are involved, which result in failure to deal factually with concrete problems, or it may have grown out of a reluctance to accept union representatives as spokesmen for their employees or even in a refusal to deal with specific indivi

duals at all.

While all the foregoing contribute to collective-bargaining failures, Mr. Ching concluded that

at least half of the collective bargaining deadlocks that occur could be avoided if management selected its negotiators more wisely and better equipped them for the job to be done.

CHAPTER VI

COLLECTIVE BARGAINING ESSENTIAL IN A DEMOCRATIC SOCIETY

The attainment of industrial peace by the route of compromising and harmonizing the interests represented by unions with the needs and purposes of management in a cost-conscious, profit-and-loss competitive economy is a major undertaking in self-government. There are all sorts of reasons why this is a difficult undertaking and many skeptics insist it is impossible of achievement. Some state that it just can't be done because the interests of workers and employers are inherently irreconcilable since one can only take from the other. Occasionally one hears some American workers or labor leaders utter such sentiments, but what they generally have in mind is that the returns of management or ownership are too great under particular circumstances. When pressed, the position of the "labor extremest" turns out to be that managerial rewards and profits are necessary and that they "believe" in the profit system, but that profits should be commensurate with the risks and with the investment and should not be made at the expense of "decent labor standards."

Many businessmen and economists can find much in the reasoning of union leadership which seems to them incompatible with the successful operation of the private competitive economy and with its long-time welfare. At the same time a fair appraisal of the progress of industry during the period in which collective bargaining has been flourishing must lead to the conclusion that collective bargaining has been compatible with the needs of American industry. The probabilities are great that collective bargaining has contributed some positive benefits to our economy. On balance, there is practically universal agreement that "collective bargaining is here to stay": this means that the terms of employment and the economic and political and social consequences of collective bargaining have become permanent factors in our economy. At the same time few expect the rate of progress in American industry to decline. Even those economists who are perturbed about the influence of unionism on the operation of some elements of the competitive system admit that one of the results has been a speeding-up of general increases in efficiency to offset union demands.

The possibility of work stoppages, with its attendant losses, will always exist where collective bargaining is the means by which wages and working conditions are determined. If the benefits of collective bargaining were not more important than the maintenance of peace under all conditions, we would not be pursuing this risky route toward the independence, the self-determination and the attainment of relative satisfaction of the parties.

As indicated more fully in chapter II, the strike threat and its occasional use is essential to effective collective bargaining in com

petitive industry. Limitations on its use may be necessary in certain cases where the conditions of competitive industry do not exist or where a paramount public interest or an essential service must be continued. This is tantamount to saying that collective bargaining cannot be applied in certain definite spheres of our social or economic life.

This report is concerned with the more typical situation where unions representing the workers bargain with employers or aggregations of employers over the terms on which they will render the services and do the work without which the employer cannot conduct his business. The risks, potential losses and hardships involved in work stoppages are serious enough to both parties, particularly when there are alternative commodities or services available to consumers, that they may serve as deterrents to the unnecessary use of the strike weapon. The cost of the strike or the work stoppage caused by the employer's refusal to yield further has a constructive role in making the parties responsible and desirous of compromising and coming to agreement.

Except where one side is relatively very weak vis-à-vis the other, a strikeless settlement is practically always a victory for collective bargaining as well as for the parties, for it means that the parties have recognized and respected each other's firm intentions after all the offers, counteroffers, and compromises have been made. This report has endeavored to find out from the experience with collective bargaining whether there are lessons to be learned which will increase the number and proportion of settlements which have not involved the losses to the parties and to the public which strikes entail.

To this end we reviewed the findings of the investigators of the National Planning Association who have reported thus far on eight companies and their experience with different unions. The constructive results obtained in the collective bargaining of the parties in these cases made these investigators search for "the causes of industrial peace under collective bargaining." The results are summarized in chapter III of this report.

The National Planning Association studies paint no Utopia of industrial relations. Neither wages or other benefits nor working conditions in these plants are strikingly different than in other plants in the same or related industries. Industrial peace was obtained principally by the most conscientious efforts of the parties to come to grips with their respective problems, to consider the other party's problems in relation to their own and to come to agreement on the basis of understanding and on the adjustments which the total situation would yield. At different times the parties were near the breaking point; occasionally strike votes were taken and one or two strikes actually occurred. But the strike was not regarded as the weapon to bludgeon one side or the other. The unions were representative organizations affiliated with the American Federation of Labor or the Congress of Industrial Organizations and they were tough and informed bargainers. But their belligerency did not exceed the bounds of the logic of collective bargaining. They wanted to be sure they were "getting all that was coming to them." They saw that the companies were "bargaining in good faith," that they took up the issues important to their employees, paid the wages and adopted the standards and working rules which related industries were achieving, handled grievances with dis