The Squeeze on the Unions

by A. H. BASKIN

A DISQUIETING feeling of impotence besets many who sit behind lordly desks in the glass and marble headquarters of giant unions. True, they still command huge treasuries; they have a controlling voice in the investment of billions of dollars in pension and welfare funds; their strike calls can plunge vital industries into long periods of idleness; their political machinery can influence the democratic process by persuading hundreds of thousands of workers and their families to register and vote. Yet each day brings compelling reminders that labor’s strength is on the downgrade and that, like the colonial powers of Europe, its leaders maysoon be presiding over the dismantling of their own empires unless they can find imaginative new approaches to the challenges thrust on them by automation, intensified foreign competition, and a dramatic shift in the composition of the work force.

What may be the wave of the future for all labor already has swept over John L. Lewis’ United Mine Workers, the union that set the pattern for unionizing the mass-production industries and for modern collective bargaining and strike technique.

the miners are rich in memories and in money, poor in members. They have $100 million in their treasury and $100 million more in pension and welfare reserves. But the industry in which they operate has become an industry of machines, not of men. Employment in the soft-coal field has gone down from 700,000 to fewer than 200,000 in the four decades since World War I. In hard coal the drop has been even more precipitate, from 180,000 to 13,000.

The union’s quadrennial convention in Cincinnati last October was like an assembly of the Grand Army of the Republic, its proceedings full of nostalgic hymns to faded greatness. Lewis, still majestic at eighty, was bathed in veneration even more awesome than that which enveloped him when he led the epic battles against the mine operators, the courts, and the White House.

There was much atavistic fist-shaking at the greedy “interests.” The few delegates intrepid enough to suggest that the rank and file ought to have a more assertive voice in the organization’s affairs were bluntly informed that what they called democracy was just another name for “labor union inefficiency,” a luxury the miners could not afford unless they wanted their implacable enemies in management to restore them to serfdom.

Similar echoes of a bygone militancy reverberated through the ratification of a constitutional ban on membership in the National Association of Manufacturers and the United States Chamber of Commerce. The two employer groups were cast into outer darkness, in league with the Communist Party, the Nazi Bund, the Ku Klux Klan, and the I.W.W.; joining any of these was made the basis for expulsion from the miners’ union.

All this in an industry in which there has been no strike for ten years and in which the employers cheer the union as the chief instrument of stabilization. Lewis, once the embodiment of class warfare, now sits with the operators as a director of corporations set up to keep King Coal from being pushed off his throne by competitive fuels. He and his successor, Thomas Kennedy, promote the consolidation of coal companies into everlarger aggregations of capital, foster the maximum use of labor-saving machinery to dig and load coal, and cooperate in the squeezing out of marginal mines as a further contribution to cutting production costs.

THE PRICE OF SURVIVAL

The result of the union’s shift from guerrilla warfare to hospitality toward all measures that heighten efficiency through improved technology has been to keep the mine price of coal steady through the inflationary surges of the post-war years. In the process, coal’s market has been protected against the inroads of oil and natural gas, and the unionists still needed in the mines have achieved the highest wages and broadest welfare benefits of all major industries.

But the human cost of this progress is starkly visible in West Virginia, Pennsylvania, Kentucky, and other coal states, where tens of thousands of miners have been tossed on the slag heap to rot in an idleness that has turned their communities into ghost towns and their families into public charges. These human discards stalk the coal-rich mountainsides, scratching out a meager existence at bootleg mines and snatching up their shotguns to fight off the union they once fought to build.

Against this backdrop of misery, the miners’ union could do little but implore the government to move aggressively to revive the stricken areas and ease the hardships suffered by its stranded ex-members. It tightened the eligibility rules governing its own retirement and welfare fund to prevent the mountainous load of poverty from bankrupting it. Husbanding the union’s financial resources and swelling them through strategic investments in common stock have become as much a concern for the miners as for corporate treasurers.

The union is now the chief stockholder in Washington’s second largest bank and has a big chunk of its own money in a bulging portfolio of securities in big coal companies, utilities, coalcarrying railroads, and other industrial enterprises. An accounting by John Owens, the miners’ secretary-treasurer, on how much the union had profited from its dabblings in big business was greeted by the delegates with the same warm approval they used to accord news that the union had emerged triumphant from a make-or-break conflict with the mine operators.

No one mistakes the union’s involvement in its moneybags for a sign that it has lost either its heart or its muscle. The unfilled needs of jobless mine families so far exceed the capacities of any private group that it would be foolhardy to seek to set up an emergency relief program under direct union auspices. As for the strikes that once kept the miners popping in and out of the pits, they have been abandoned, not from an inability on the union’s part to cut off production but from a knowledge on both sides that a reversion to the old warlike pattern would mean the loss of coal’s principal customers, the electric power companies. They are equipped to convert almost instantaneously from coal to oil or natural gas, and they have made it plain that any irregularity in coal deliveries will cause a permanent shift to these rival sources of energy. Confronted with a choice between cooperation and suicide, the industry and the union scrapped their arsenals.

THE MARCH OF TECHNOLOGY

Indications are plentiful that automation is drying up the fields of historic union strength; the organizing slogans of the thirties hold no appeal for the new workers pouring into the labor force; surplus plant capacity makes many managements welcome strikes as a handy valve for draininginventory out of clogged warehouses; most menacing of all, increased employer toughness, the mounting pressure of low-wage imports, and public hostility toward wage increases accompanied by price increases have lowered the ceiling on the contract gains most big unions can hope to deliver.

The march of technology is like a pincer movement in its impact on unions. It eliminates large numbers of blue-collar jobs in manufacturing and transportation, thus chipping away the bedrock of union enrollment. To the extent that new jobs are created, they involve hard-to-organize engineers, technicians, and white-collar workers. That is one side of the nutcracker.

The other is the degree to which automation makes businesses invulnerable to strike harassment. When push buttons and electronic control devices regulate every operation from the receipt of raw materials to the loading of finished goods, a handful of nonunion supervisors and clerks will be able to keep acres of machines producing in the face of a total walkout by unionized factory crews. The Bell telephone system and most major electric utilities already have reached this point of immunity to large-scale disruption of service resulting from strikes. In a few years many other big companies will be so far advanced along the road to mechanized production that they, too, can cease to worry about union strike calls.

Even with existing production methods, our ability to make goods is so much greater than our ability to market them that most major industries can satisfy all the consumer demand of a prosperous year by operating their plants eight or nine months. A work stoppage of three or four months saves the employer the necessity of ordering a forced layoff or a short-work schedule to prevent his products from drowning the market.

The 116-day steel strike of 1959, which took a half million unionists from their jobs, made plain how little financial punishment labor is able to inflict on employers through the exercise of its ultimate weapon. Despite the longest union shutdown in the industry’s history, the combined net profit of the leading steel producers, as computed by the First National City Bank of New York, came to $816 million for the year, a rise of 5 per cent over their 1958 earnings.

To add to the union’s frustrations, the excess of capacity over demand proved so great that the mills found it necessary to black out half their furnaces and furlough tens of thousands of workers within six months after a presidential order under the Taft-Hartley Act had compelled the union members to return to their jobs in the national interest. By the end of 1960 the slackness of market demand had caused a loss of tonnage almost equal to that engendered by the long strike. The industry, which is now able to show a profit when it is operating at as little as one third of capacity, decided to ease its embarrassment over the gulf between what it could make and what it could sell by abolishing the production index that advertised its lag to an unsympathetic world.

THE WORKER’S BEST FRIEND

A complex of new factors has further blunted the effectiveness of strikes. Employers are turning more and more to strike-insurance programs to cushion their strike losses; income-tax carry-back provisions operate as another shield against red ink; so do unemployment insurance merit-rating taxes, which make it cheaper for a business to have workers idle because of a strike than because ol a cutback ordered by the company.

Add to this a widespread feeling in management ranks that it is time to “stop letting unions push us around. This translates into a far more rigid employer stance in collective bargaining — a determination to get concessions in increased efficiency for every new union gain. Companies that once fought a rear-guard action against union demands now make all the key decisions on how much they will give and how much they will take in exchange.

Many unions have found themselves powerless to buck this “take it or leave it” approach because of the vastly increased sophistication with which employers are conducting most aspects of employee relations. All the techniques of motivational research are poured into multimillion-dollar programs to convince the workers that management is their best friend. The blood-and-guts antagonism to unions of the Tom Girdlers and Ernest T. Weirs in the Eittle Steel strikes of two decades ago has been replaced by a year-round flow of “Papa knows best” communications, the net effect of which is that unions are perfectly all right if the workers want them, but there is nothing beneficial they can do that management won’t do at least as well without their prodding.

By all odds, the most skillful practitioner in this field is General Electric, the nation’s biggest electrical manufacturer. The extent of its dominance in collective bargaining was forcefully indicated by the rout of the International Union of Electrical Workers in the three-week strike it conducted last October in a vain effort to improve a G.E. contract offer.

The union’s biggest local, representing workers at the G.E. headquarters plant in Schenectady, quit the walkout in mid-course. Other plants were able to restore varying measures of production. Indeed, it was plain that the union’s official order to go back without any modification of the pre-strike package was issued just soon enough to prevent a general collapse that would have left the union leaders without any rank and file. The only flaw for the company was the issuance by Mayor Richardson Dilworth of Philadelphia of a public charge that General Electric had been guilty of “political and industrial blackmail” in hinting that it would move to a more congenial environment if the police of the City of Brotherly Love did not act more vigorously to get nonstrikers through the union picket lines. The company insisted that its sole concern was with the maintenance of law and order.

It was not until four months after the union had limped back on the company’s terms that the first real crack developed in the image of corporate rectitude in which General Electric had wrapped itself. The company was fined $437,000 and three of its high officials went to jail for participation in an industry-wide price-rigging scheme that cheated government agencies and private utilities in the sale of billions of dollars in heavy electrical equipment.

The paradoxical upshot of all this weakening of labor’s mastodons in the mass-production industries is that little unions are calling much more damaging strikes these clays than their big brothers. Despite the unabated clamor of the Goldwaters and the Mundts for laws to prevent industry-wide strikes, a strategically placed small union often exercises far more economic leverage than one a hundred times its size. This was illustrated with particular force last January when a walkout of 664 crewmen on railroad ferries and tugs in New York Harbor generated a picket blockade that cut off service for 100,000 commuters, forced an embargo on export freight, and halted virtually all main-line service on the sprawling New York Central and New Haven rail systems.

At the very time that a covey of top federal, state, and city officials were pooling their energies in a panicky rush to relieve the disruption touched off by this tiny walkout, the Labor Department was releasing a study designed to show that there was no cause for public anxiety over the frequent national work stoppages by 500,000 steelworkers. The irritation that stems from this imbalance between union size and the capacity to hurt an army of innocent bystanders is one that damages labor’s popularity.

THE END OF THE WAGE-PRICE SPIRAL

The unions have several other big headaches. One of the worst is the heightened cost-consciousness engendered in industry by the recession, by public and political anxiety over higher prices, and by the prospect of increasingly stiff competition from foreign and domestic rivals. So pressing have all these considerations become that there is solid basis for believing that we are nearing - if we have not already reached — the end of the wage-price spiral in such pivotal industries as steel, automobiles, and electrical manufacturing. The decisive battle on this front was fought, in the opinion of many observers, even before the steelworkers went out on their long strike in 1959.

No industry has been more criticized for the development of a leapfrog relationship between higher wages and higher prices than steel. Until 1959 the regular practice of the major steel producers was to give a bigger-than-average pay hike each year and follow it with an even bigger price hike. The result was that steel prices went up four times as fast as the general price level in the post-war period. The union complained that the companies took three dollars in price increases for every dollar in higher labor costs, but it never allowed its objections on this score to moderate its own pressure for bigger and better contracts.

By the time the steel companies and the union arrived at the bargaining table in 1959, it was clear to both sides that they had reached the end of the road on a wage agreement that would provide the excuse for an automatic jump in prices. President Eisenhower emphasized his determination to crack down on any inflationary settlement. The Senate Anti-Monopoly Committee, under the chairmanship of Estes Kefauver, made it equally plain that it felt steel prices were already too high.

Interestingly enough, the union’s own membership manifested almost as much coldness to the idea of a wage increase based on a price increase as did consumers, who would have to pay one without the offsetting effect of the other. “It makes no sense to have the boss put a nickel in wages in your pocket with one hand and take out a dime in prices with the other” was a common sentiment in the steel towns as the contract deadline approached.

It was only when the industry demanded a freer hand in junking established work rules that the union unleashed its old militancy. It resisted so fiercely that the companies were obliged to surrender on the rules issue in the peace pact negotiated with the help of Vice President Nixon, but the cash provisions of the accord gave the union only half a loaf by the bread-and-butter measure of earlier years. The first two rounds of economic improvements already have been made under the thirty-month pact, and neither has brought the price increases that were an inescapable appendage of past settlements.

The Kennedy Administration is not going to be any more hospitable to inflationary wage agreements than its predecessor was. The new President set forth during the campaign his resolve to oppose labor-management settlements made at the expense of the consumer. His economic messages to Congress put even heavier stress on the need for wage-price stability. The realities of foreign competition are as compelling a goad to holding down prices as the political unpopularity of inflation. The greater the disparity between costs here and abroad, the more exposed our markets will be to invasion by a fast-industrializing world and the more temptation there will be for American manufacturers to set up overseas affiliates instead of expanding or modernizing their facilities in this country.

This presents the government, industry, and labor with a joint stake in arresting a situation that threatens more import of goods and more export of jobs to the detriment of the American economy and our influence in the free world. VVith more than thirteen million additional job seekers expected to enter our already overcrowded labor market in the next ten years and with automation snuffing out work opportunities in many sections of industry, the horizons for dramatic improvements in wages or working conditions are murky.

The administered price system, in which unionenforced wage increases became a handy justification for pushing up prices in bad times as well as good, is breaking down under these new competitive factors. In steel, the industry’s abstention from raising prices in the last two years has been based not solely on the fear of White House or congressional reprisals but also on a recognition that aluminum, plastics, prestressed concrete, fiberglass, and other domestic materials have joined foreign steel products in a bid for the markets traditionally ruled by an oligopoly of giant steel companies. With the incentive for price hikes gone, the industry is sure to use its vast reserves of unused capacity as a wall against further union advances of pre-1959 magnitude.

This does not forebode a freezing of wages at present levels. But it does create a strong probability that unions will have to be content with increases geared more or less mathematically to productivity. This means producing more to earn more under contracts that will be fairly predictable before the negotiators get to the bargaining chamber. Such a slide-rule system, with total increases of eight to ten cents an hour each year, will make it more and more difficult to explain to the average worker what economic service he obtains in return for his union dues.

THE DROP IN UNION MEMBERSHIP

Unions already are finding that the slogans which attracted millions of workers in the early years of Franklin D. Roosevelt’s New Deal are ill adapted to mass organizing drives on the “new frontier.” When the American Federation of Labor and the Congress of Industrial Organizations ended their twenty-year war in 1955, the architects of merger spoke optimistically about doubling union membership in the first ten years. With the decade half gone, the federation is fighting a losing battle to hold the share of the work force with which it started. Only about one worker out of every three in the nonfarm field holds a union card, and the ratio is going down.

Part of the holdback stems from the limitations put on traditional recruiting methods by the TaftHartley Act and the newer Landrum-Griffin Act. Part reflects the readiness of workers who reached adulthood after the Great Depression, the sit-down strikes, and the outlawing of private industrial armies to take for granted the higher economic standards and civilized grievance machinery for which earlier unionists gave their blood. The long-standing coldness of white-collar, civil service, and professional employees toward unionization has been heightened by the reaction to labor that came out of the McClellan Committee’s three years of concentration on the scabrous side of union-management affairs. The firmness with which the AFL-CIO moved to kick out the Jimmy Hoffas and the Johnny Dios has been obscured by the inability of the sanctions applied by labor or the government to force any real cleanup in the freewheeling Teamsters Union, biggest and strongest of all labor organizations.

Difficulties of such dimensions clearly require a thoroughgoing evaluation by labor of the adequacy of its policies, its leadership, and its functions in the total society. Many large corporations have set up special divisions of forward planning to look into the future and decide what the company ought to do to keep growing. Such planning agencies are almost unknown in organized labor. Walter P. Reuther, the dynamic president of the United Automobile Workers, has done more in this direction than his more earth bound associates in labor’s top echelon.

TRAINING ORGANIZERS

However, there is beginning to be a stirring even in the most standpat unions. George Meany, the APL-CIO president, whose crusading for high ethical standards was principally responsible for the Teamsters exile, is exploring ways to revive the dormant organizing drive and put new brightness in labor’s public image. The federation is contemplating a school for organizers as a means of ensuring a cadre of highly qualified replacements for labor’s aging general staff.

Twelve of the twenty-eight members of the federation’s ruling executive council are past the social security retirement age of sixty-five, and four others are less than five years from that milestone. It is on these men that the primary responsibility falls for evolving a new sense of mission for the labor movement. Unhappily, a good deal of the enterprise they should be devoting to the task is drained off in endless jurisdictional wars. Unions with a hundred thousand workers unorganized in their industries battle over who should control a dozen already in union ranks. Personal animosities are so virulent that the merged federation has been repeatedly dragged to the edge of collapse by the inability of its aging rulers to live at peace.

Yet in many ways labor’s elder statesmen have shown more receptivity to fresh ideas and to concepts of social responsibility than their rank and file. Despite the threat automation has posed to the size of their unions and the security of their treasuries, they have recognized from the start that they could not halt scientific improvement. The arguments have been less over whether to automate than over how to share the fruits of automation most equitably and provide maximum safeguards against too high a toll in layoffs.

In many industries union chiefs have been so diligent in suppressing wildcat strikes and fostering increased efficiency that their members have accused them of becoming too companyminded. On the political front, they have been careful to avoid any scramble for patronage as the price of their election support, and the bulk of their legislative program is aimed at achieving faster economic growth for the welfare of all.

THE UNIONS’ LIFE EXPECTANCY

The big question is whether the rather amorphous social goals for which labor is now striving are sufficiently appealing to hold together a movement that has always prided itself on its nonideological character and its identification with “bringing home the bacon" in the most literal market-basket sense. If democratic values are to survive in this country, a healthy union movement will have to play its important role in giving them meaning. To let it sink into a supine subservience to management, with no real grip on the loyalty or idealism of American workers, would throttle at the source much of our productive energy and reduce our chances of overcoming the challenge of Soviet industrial progress.

A labor movement excessively dependent on government would be equally empty of democratic vitality. No group in our complex society has a monopoly on wisdom. If labor defaults in its role as a balance wheel against too much concentration of power in industry or the state, we shall all be the poorer.

Obviously, the life expectancy of unions will be short if all they can promise their members is a modest dose of more of the same in each new wage contract, plus eternal worry about how long their members’ jobs will last. Thus far, most of the answers to automation that have come out of collective bargaining consist of little more than termination pay allowances and arrangements for retraining the displaced workers if there are any jobs to train them for. Developing more satisfactory answers is too big a task for labor alone. It requires a pooling of the best thinking in all parts of our economy — employers, unions, and government on an across-the-board, as well as an industry-by-industry, basis.

President Eisenhower’s Secretary of Labor, James P. Mitchell, made some significant headway toward meeting this need. Now an even more ambitious effort is being undertaken by his successor in the Kennedy Cabinet, Arthur J. Goldberg. The extent to which these two men — one a Republican with a background of executive service in management, and the other a Democrat with two decades as a labor lawyer and policy maker — have been pursuing parallel aims is perhaps the best portent of hope that a fruitful partnership can be established on the production front, the battlefield on which Premier Khrushchev has vowed he will eventually bury us.

PROGRESS WITHOUT STRIKES

Labor’s trail blazers in the sixties will not be the leaders who plan the most audacious strikes but those who are most successful in devising formulas for social justice and industrial progress without strikes. The two most powerful men in the AFL-CIO, Meany and Reuther, have long recognized that labor must go forward with the community, not by picking the community’s pocket for its own benefit.

Reuther began immediately after V-J Day to enunciate the principle that labor should fight against company moves to make every wage increase an excuse for an even bigger price increase. Meany, when the McClellan Committee beeran demonstrating how flagrantly some union leaders were violating labor’s ethical practices code, was at pains to remind his flock that Gompers was not thinking only of dollars and cents when he made his classic statement that what labor wanted was “more.” This was Gompers’ testament, as Meany chose to recall it: “I do not value the labor movement only for its ability to give better wages, better clothes, and better homes. Its ultimate goal is to be found in the progressively evolving life possibilities in the life of each man and woman. My inspiration comes in opening opportunities that all alike may be free to live life to the fullest.”

It is easy to point to departure from this idyllic credo. Too many unions continue to be arrogant or hypocritical in their attitudes toward industry, the consumer, and their own members. But each year brings indications of an awareness that steady jobs and stable prices are more important than the kind of wage increases that erase both jobs and buying power by pricing goods out of the market. Union-built housing projects are replacing slums in many cities; union hospitals and health centers are supplementing community health facilities; hundreds of youngsters are going to college on union scholarships; labor has become a mainstay in Community Chest fundraising drives; unions are contributing men and money to the building of free labor organizations in Asia and Africa as a defense against Communist penetration. All these are signs of hope as labor gropes for new footholds in a fast-changing society.