The Labor Month n Review

N THE APRIL ISSUE, the Monthly Labor Review vill present in considerable detail the recommenations of the 13-chapter report of the tripartite 'residential Railroad Commission. These in efect were the recommendations of the public embers. The carrier members accepted them with reservations. The union members rejected he major recommendations.

The Commission had been appointed in Novem›er 1960 to investigate work and pay rules disputes etween 195 carriers and the 5 unions representing bout 200,000 operating employees. Both parties ad committed themselves to resume bargaining mmediately following the Commission's report. The reaction of the parties to the report might a part reflect their need to assume a stance before egotiations. More likely, however, it stemmed From the uncompromising vigor of the report and he philosophy underlying it. As Commission Chairman Simon H. Rifkind put it, when you ttempt to effect a change, "it follows that the Edventitious beneficiaries will complain."

Summed up in a single sentence, the report conluded that it was time for a change in the "comnon law" of the union-carrier relationship, but here also must be time enough to make the hange. All parties can concede that the report ;ave an explosive wrench to the issues which have reated periodic crises in railroad bargaining, and t is worth quoting some of the language which reeals the purpose and the philosophy which motiated the public members.

Railroad rules and practices relating to manning and pay computation, the report states, "devel›ped over a period of more than 100 years" from mixture of "practices and habits, from collecively bargained agreements, from decisions of courts and arbitration tribunals, from Federal and State legislation, and from actions taken [under Government control] during and immediately after World War I." While some changes have taken lace to accommodate improvement in operations o "revolutionary changes in technology and to the

changes in the national context in which the railroad industry operates," the report says they have not been far reaching enough.

A lack was noted in the flexibility required "to permit many changes in manning and assignments which are appropriate in the light of the technological and economic revolutions that have taken place." Collective bargaining practice on the railroads "has permitted a lag to develop between the rate of change in the 'common law' of the industry and the rate of change in railroading and the Nation." The necessity "to close the gap" has been widely recognized, the Commission felt, by both labor and management.

SEVERAL BASIC CONCEPTS were set forth by the Commission as a "framework within which we believe it will be possible for the parties to find solutions for their problems."

1. Collective bargaining must be the medium within which all issues must be settled, but procedural reforms in bargaining will strengthen the bargaining process.

2. A psychological adjustment is urged on the parties in order to regard "the decade of the 1960's as a period of transition and adaptation to the new arrangements" proposed in the report. A transition period "is necessary because it is not prudent to make a sharp and precipitate break with the past. . . . Revolutionary changes even for the better carry a high price in disruption [which] might exceed the value of the improvement." Consequently, "the best must yield to the better" and be "endowed with a time dimension."

3. Recommendations are made with varying degrees of specificity. The Commission hopes "that the degree of particularization . . . is sufficient to provide the catalysis necessary for the parties themselves to close the gap . . . between the technology and the economics of the industry and the rules governing the pay, assignments, and working conditions . . . .'

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5. A "coordinated manpower review should be undertaken to plan for more effective, secure, and equitable manpower administration." The Commission suggested that the industry, which has improved its utilization of freight cars through "pooling and coordination on a national basis” should do as much for its employees.

6. Fundamental to the Commission's thinking has been the premise "that the Nation is entitled to a safe and efficient rail-transport system" in which management can with reasonable freedom introduce technological improvements, employees can be assured of a "sound and equitable pay structure" and of safe and efficient working conditions, and the adverse effects of productivity improvements are cushioned. The Commission emphasized that it was not influenced in its recommendations for change by "the

THE COMMISSION REPORT is forceful in its insistence that the time for change is emergently at hand. "The country, the carriers, the operating employees, and their labor organizations cannot afford to miss this opportunity for self-correction of rules and practices Neither the national welfare nor the welfare of the railroad operating employees nor the welfare of the carriers will be served by a stubborn refusal to yield the status quo or to accept a new idea in the belief that some cherished privilege or practice will be endangered.' The national interest commands the resolution of the conflict between work rules and technological change. "The backwashes of civilization are strewn with the debris of peoples who stood stolidly against change.'

Having sounded this tocsin, the Commission then proclaimed its added responsibility to see that the public blessings of technological advance are not made "a private curse."

NO PARTY to the proceeding could accuse the Commission of using weasel words to becloud its recommendations. For example, in the controversy over the need for firemen on diesel locomotives in yard or freight service, the major rationalizations for the presence of the fireman have involved the safety and mechanical duties performed. The Commission concluded that "the fireman's lookout function . . . is not essential to the safe and efficient operation of road freight and yard diesels" and that "he possesses no unique or traditional 'craft right' to discharge this function." On mechanical functions, the Commission stated "that they involve a small proportion of the total time on duty, are relatively minor, and are not essential to safe operation." The Commission chairman stated the matter thus in a press interview: "the fireman aboard that engine does not serve a useful enough purpose" to warrant his presence. But the recommendations also in

cluded an elaborate plan for monetary and othe assistance to displaced firemen.

THE CARRIERS' separate statement recognized tha "no subject so complex as the outdated work rules. . . can be settled to the complete satisfac tion of everybody." However, it was contende that "there is no precedent in American industry for protective provisions of such cost or magia tude." Despite the "deficiencies of this report in relation to the denial of some of managemen: proposals and the imposition of "increased cos without regard to . . . ability . . . to pay . . we are convinced that . . . these recommenda tions are designed to serve the public interest. THERE WERE four separate dissents by the unio representatives. S. C. Phillips of the Brotherhood of Locomotive Firemen and Enginemen concent trated on a point-by-point rebuttal of the reports arguments against the need for firemen on diese in yard and freight service. In conclusion, bil stated that the report "is contrary to the record. He urged the Commission, "before it plung everyone into catastrophe to look again at the case." He warned that the report "neither he to the issues nor finds support in the record d proceedings.'

H. F. Sites of the Brotherhood of Railro Trainmen and S. W. Holliday of the Order o Railway Conductors and Brakemen joined in statement which concentrated on the crew co sist and compensation recommendations. In r gard to the former, they contended that th "Commission, after a year of hearings and investo tigation, has been unable to identify any substan tial area of overmanning attributable to negotiated crew consist rules." On wage structure, they fel that the proposals "would create chaos in a struc ture that at least is working, however much may need modernization." They feared that "haste" had led to a "haphazard" plan.

James W. Fallon of the Switchmen's Union ofs: North America wrote that "the recommenda tions... would lead to the eventual eliminatio of the distinction between road and yard service and would give management rights "which n labor organization can relinquish."

The brief comments by A. F. Zimmerman offe the Brotherhood of Locomotive Engineers termed the report "obnoxious" and promised submissio to the President of a separate report.

Price Trends and he Business Cycle n Postwar Years

PEARL C. RAVNER*

HOLESALE PRICES in this country have gone up y one-fourth and consumer prices by one-third the 14 years since 1947. All of the wholesale ice rise and most of the retail increase occurred iring three periods: the years immediately after World War II, the Korean emergency, and the termath of the 1955-57 investment boom. side from these periods, consumer prices inched owly upward and wholesale prices remained eady, or trended down, reacting neither strongly or promptly to the fluctuations of the four postar business cycles. The only marked cyclical esponses occurred for wholesale prices in the 1949 ownturn and for both consumer and wholesale rices in 1950, when the outbreak of hostilities in Corea occurred during a time of business recovery. Some of this stability resulted from the primary fluence of factors other than business fluctuations n important segments of both wholesale and retail rices-farm products, foods, and services. arm products and foods, because of the particur stages of the meat production cycles, exerted ownward price pulls throughout the last three usiness recoveries. Consumer prices for services, s part of a long-run uptrend, nudged retail prices pward in both recession and recovery. Another tabilizing factor has been the relative inflexibility f prices of semiprocessed and highly processed ommodities during economic downturns.

The major difference between the price response the current recovery and that of the three preious postwar recoveries has been in industrial ommodities. From the February 1961 trough à economic activity, wholesale prices of all commodities other than farm products and foods

declined slowly and reached a low 8 months later. Although the decline was fractional, it contrasted sharply with gains exhibited by industrial prices during the early months of the previous postwar upswings.

General Price Trends Since World War II

Immediately after World War II, the enormous backlog of demand for still limited supplies sparked a buying surge at a time when cash holdings were large and credit was easily available. With the removal of Government controls, prices rose rapidly in 1947 and 1948. After some decline in prices during the recession of 1949, a rush of buying by both consumers and businesses and increased defense expenditures during the Korean episode brought a price spurt in 1950 and 1951. "Emergency" price controls were again adopted, though far less restrictive than those in force. during World War II.

Except for some downward adjustment in wholesale prices from their 1951 level, several years of price stability followed. An expansion in plant and equipment investment between 1955 and 1957 caused prices to advance in 1956 and 1957, particularly in the producer durable goods industries. Since 1957, the stability of overall wholesale prices has been particularly evident; annual averages between 1958 and 1961 have differed by less than 0.5 percent. Consumer prices, also relatively steady, moved up 3.5 percent in the same period. (See table 1.)

Built-in economic stabilizers and Government antirecession measures helped sustain individual income and the level of consumption in the postwar downturns, despite the decline in the gross national product. (See chart 1.) As a result, demand did not fall sharply and there was no strong pressure to reduce prices. Although production fell and unemployment rose, total personal incomeexcept for a decrease in the recession of 1948-49remained stable. At the same time, costs of production and distribution remained heavy and fixed, organized labor offered powerful resistance to wage cuts, and price structures in significant sectors of the economy were rigid. Thus, both demand and costs exerted pressures to sustain the

*Of the Division of Prices and Cost of Living, Bureau of Labor Statistics.