and directives enforced if necessary by drastic Government measures, wherever the authority of the Board was questioned the Board then took the position that its decisions were merely advisory and that it had no authority to impose them upon the parties. There is little doubt that the current administration which gave the Board the power to "recommend" in cases of industrial disputes over the united opposition of industry would be equally alert in backing up the "recommendations" of the Board. Furthermore, employees who do not agree to submit their disputes to the Board for “voluntary arbitration" by the Board, will have to be prepared to face strikes called for the sole purpose of forcing them to submit their disputes to the Board for "voluntary arbitration." INDUSTRY'S RECORD OF CONTINUOUS COOPERATION IN THE MOBILIZATION PROGRAM Throughout this entire period, representatives of management continued to give their fullest cooperation in all phases of the country's mobilization program. In this connection, it should be noted that industry members of the Wage Stabilization Board remained on the Board and continued to make their contribution to the mobilization effort even when they believed the Board's recommendations were unsound. Industry's record of the fullest possible cooperation with the defense mobilization program has been continuing, consistent, and constructive. For example, industry representatives dissented from General Regulation No. 2 but continued to serve on the Board. Furthermore, management's proposals would have made it possible for the Wage Stabilization Board to resume operation and to consider the accumulating hundreds of cases which could not be handled under existing wage stabilization policy. The labor representatives insisted that the Wage Stabilization Board was inadequate because it could not deal with labor disputes. It is reliably reported that less than one-half of 1 percent of the hundreds of cases awaiting Board action are dispute cases; the remainder are all questions of interpretation, application, or amendment of wage stabilization policy. Labor members further threatened that if their demands were not granted, they had the power to stop defense production throughout the country, and they implied that they would not hesitate to use that power. Similar manifestos can be expected with reference to any other demands put forward by the leaders of organized labor. On the other hand. industry representatives have continued to do everything in their power, despite attacks by organized labor and various governmental agencies, to make their fullest contribution to the mobilization program. Representatives of industry have continued their active participation even when their recommendations have been disregarded, and when their constructive proposals for the efficient management of the defense program have been rejected. THE STATUS AND EFFECT OF THE RECONSTITUTED WAGE STABILIZATION BOARD The reconstitution of the Wage Stabilization Board, in addition to being a clear evasion of the Defense Production Act, is a violation of congressional intent, as clearly expressed in the Defense Production Act, and is bound to have the following results: 1. The granting of labor's unreasonable demands as a result of labor's walk-out will encourage further demands. Whenever labor leaders are unable to achieve their goals through normal democratic procedures or collective bargaining, they will know that they can obtain the desired result by again walking out on the Nation's mobilization program until their demands for personal power or economic or political favoritism have been granted. In this connection, it should be noted that the leaders of organized labor have made it clear that they reserve the right to stage a similar walk-out at any time. They refuse to make any commitment or to give any guaranty to cooperate in the Nations mobilization program. 2. The existence of a labor disputes-settling agency prevents the operation of normal collective bargaining. Experience demonstrates that the existence of such a board makes a farce of collective bargaining, and that the parties are encouraged merely to go through the motions in order to have their case certified to the disputes-settling agency. During World War II, the existence of the War Labor Board encouraged strikes 1-strikes designed to get a case heard by the War Labor Board; strikes to extend and expand War Labor Board decisions; strikes in protest against War Labor Board decisions. These are strikes which 1 For a record of strikes during World War II, see appendix D. would not have taken place except for the existence of a labor disputes-settling agency. The encouragement of strikes under these circumstances results in defiance of government and puts civil authority to peril. The setting up of a labor disputes agency encourages more strikes, rather than less. For example, during the period from 1942 through 1945, when the country was engaged in an all-out war for survival, despite a no-strike pledge on the part of organized labor, the record shows that there were 16,426 strikes during this period, involving a direct loss of 64,400,000 man-hours of production, in addition to the unestimated secondary losses throughout the economy. 3. Permitting an alleged wage stabilization board to act as a labor disputessettling agency converts the Board from a wage stabilization agency into an instrument for artificially raising wages and thereby feeding the fires of inflation. It is inevitable that wage stabilization policy should assume a role secondary to the Board's function of settling disputes. If, in order to settle a dispute, it is necessary to puncture wage ceilings, the Board would undoubtedly do so. Consequently, the Board itself would be the first to violate its own wage stabilization policies. 4. As the Wage Stabilization Board had itself recognized, price and wage stabilization by themselves would have little effect upon inflation, since they are directed at the results; on the other hand, it is abundantly clear that, without effective wage stabilization, any attempt at price control would be utterly futile. So long as price control is utilized, however, price control cannot be administered without effective wage stabilization. As Congress clearly indicated in enacting title IV of the Defense Production Act, wage stabilization is part and parcel of price stabilization. 5. The creation of a labor disputes board by the President a surrender by him to the ruthless pressure of a self-constituted group of 14 labor leaders— has no justification whatever so far as the present labor-management relationship is concerned. There are no major strikes which could not be handled by the ordinary processes of collective bargaining under existing law. Laborunion leaders recall that the War Labor Board was instrumental in hastening the development of unionization, in granting a wage increase beyond wagestabilization policy, and in imposing union security upon thousands of companies in which unions were unable to obtain compulsory unionism through collective bargaining. They look to the present Wage Stabilization Board to have the same result. They demand Government imposition of terms of employment which they are unable to obtain through the more difficult and voluntary processes of collective bargaining. In so doing, the President took a step which Congress itself has repeatedly refused to do. Congress has refused to upset collective bargaining; on the contrary, Congress has repeatedly reemphasized that national labor policy rests upon voluntary collective bargaining where employees choose to be represented by unions. Congress has refused to permit compulsory arbitration, because that is the antithesis of voluntary collective bargaining. Congress has refused to impose Government control upon labormanagement relations, but instead has enacted safeguarding provisions requiring that nothing be done that is inconsistent with existing laws. 6. Establishment of a labor disputes board constitutes a severe blow to the prosecution of the defense mobilization program. The encouragement of additional strikes, the demonstrated power of these 14 labor leaders to exact concessions from the Government-these will interfere with the orderly prosecution of defense and civilian production. The defense program will inevitably be endangered by reducing the production of goods and services essential to the military forces and the maintenance of a sound civilian economy. The fruit of appeasement is always bitter fruit. In this case, appeasement of labor leaders will result in greater inflation, less production and encouragement to organized labor to repeat the performance in order to wring even greater concessions from Government. INDUSTRY'S ALL-OUT SUPPORT FOR THE MOBILIZATION PROGRAM Throughout these negotiations, despite pressure from Government and threats and abuse from organized labor, industry's position has been clear. Business and industry hold that in the critical world situation in which the entire free world looks to the United States for leadership, we must break all production records while maintaining a sound economy and fighting the forces of inflation. So far as concerns the maintenance of continued production, it is essential that the relationship between labor and management be determined through collective bargaining wherever employees choose to be represented by unions. Experience demonstrates that that kind of voluntary cooperation will result in far greater production than any Government-imposed formula which may be resented by one or both parties. The statistics on time lost as a result of labor-management disputes indicates that the present situation is fairly good.' There is no overwhelming wave of strikes requiring governmental intervention. In case any strike does seriously endanger national health or safety, the provisions of existing law are adequate to deal with it. Any attempt to impose compulsory arbitration, by way of a labor-disputes board or otherwise, would result in causing synthetic and unncessary strikes in order to get cases before such a board. A wage-stabilization board, extralegally converted by Presidential order into a disputes board, is a threat to maximum production, on which so much depends. The haunting threat of inflation can best be offset by appropriate fiscal policies: reduction of avoidable nondefense Federal spending; taxation high enough to pay our way as we go rather than operate at a Federal deficit; restriction of business and consumer credit except to facilitate essential production facilities and essential production; and encouragement of individual saving. As the Wage Stabilization Board itself stated, the stabilization of prices and wage "will merely conceal and defer the effects of inflation, while permitting the pressure of hidden spending power to build up." However, if price control is nevertheless resorted to in an effort to stem the results of inflation, it is futile to attempt it at all unless accompanied by effective wage stabilization. To give the Wage Stabilization Board the additional power to settle labor disputes would be to guarantee the failure of wage stabilization and to convert an alleged wage-stabilization agency into a device to promote inflation. All sectors of the business community are united in the conviction that the establishment of a labor disputes board would interfere with production and destroy any possibility of effective wage stabilization. Despite industry's conviction that the creation of a labor-disputes board is extralegal, unwise, and even dangerous, business and industry will continue to cooperate to the best of their ability while using every opportunity to demonstrate what we believe to be the right road to follow in order to achieve the production we need, in order to maintain industrial peace, and in order to defeat inflation. CONGRESSIONAL RESPONSIBILITY FOR A SOLUTION The cynical policy of labor appeasement in violation of the clear intent of Congress and in contravention of specific provisions of law requires that Congress take specific action, in connection with the extension of the Defense Production Act or otherwise, to correct a situation which threatens the entire defense mobilization program, encourages industrial strife and endangers the economy. Congressional action should leave the Executive no room for surrender to 14 men not representing the public by evading or nullifying the intent of Congress through Executive orders or administrative directives. In every country where dictatorship has arisen to oppress the people, it has been effectuated by seizing the executive control of Government and imposing its will upon the representatives of the people. In this critical period when the free world looks to the United States for leadership, our representative institutions must be improved, rather than permit them to be usurped by Executive authority acting at the behest of 14 labor leaders who have not been elected to any position in Government. The establishment by the President of a labor disputes board in contravention of the clear intent of Congress and in gross disregard of the provisions of the Defense Production Act demonstrates the need for congressional assertion of its representative authority. The executive branch of the Government cannot be permitted to evade the basis of our republican form of government: that it is the representatives of the people in Congress assembled who determine the law under which the country operates. The threat to the defense program posed by unwarranted and extralegal Executive action calls for congressional consideration to assure the people that their representatives are aware of the perils and are prepared to take the required action. 1 See appendix D. The flouting of the intent of Congress by the executive branch poses a fundamental threat to the representative form of government. In this situation, Congress faces a grave responsibility. APPENDIX A.-LABOR STATEMENT TO PRESIDENT TRUMAN ON MOBILIZATION AND STABILIZATION Organized labor in America has established a united labor policy committee composed of representatives of the American Federation of Labor, the Congress of Industrial Organizations, the Railway Labor Executives Association and the International Association of Machinists. We pledge ourselves unreservedly to the service of our Nation and to the support of the President in the present' crisis. Objectives of united labor policy committee Our purpose is to develop a common approach to the problems arising out of the mobilization and stabilization program. We are deeply concerned for our country's security and welfare. The security, the dignity and material well-being of the wage earner in America as well as throughout the whole world, are dependent upon the preservation and extension of the democratic way of life. We are fully aware of the grave emergency confronting our Nation. We dedicate ourselves to help make our country strong and to use that strength to bring peace and abundance to mankind. It is imperative that labor be granted active participation and real leadership in every important agency in our mobilization effort. We regret that to date labor has not enjoyed opportunity for full participation in the mobilization effort. Free labor can make its fullest contribution only if it is permitted to serve at all levels of defense mobilization both with respect to policy and administration. No one group has a monopoly of ideas in the mobilization of our resources. Each group has much to offer and cooperatively we can defeat the world-wide challenge of dictatorship. Control of living costs The control of the prices of all the elements in the working man's every day necessities is the central problem in wage stabilization. We are compelled to point out that under the provisions of the Defense Production Act of 1950 it is impossible to control these prices. Under this legislation, great increases are specifically permitted in the price of food, which constitutes approximately 40 percent of the living expenses of the average American family. In addition, rents which constitute about 13 percent of living costs, are not now effectively controlled. So long as food prices and rents are thus subject to sharp and drastic increases, compensatory wage adjustments must be permitted. The present prohibitions upon control of food prices and rents are an effective barrier to any system of prices or wage controls, and the elimination of these prohibitions are preliminary to any workable stabilization action. Effective control of retail food prices can be achieved and at the same time farmers can be assured fair prices for their products. The Defense Production Act should be promptly amended by the Congress to accomplish these ends. General and selective controls American industries are so integrated that no one of them can be singled out for the purpose of wage and price control. Price control, to be effective, must be general. Adequate machinery and vigorous enforcement procedures must be created. Otherwise, such controls will break down. The Government should strive for justice and workability in its stabilization measures. To subordinate these factors to pressure for hasty improvisations is not in fact speed, but is rather postponement of the time when real stabilization will be achieved. While the imperative preliminary steps are being taken, other phases of the stabilization program must be taken into consideration to avoid later error and delay. With reference to wage stabilization, three basic principles should be considered so that they may be embodied in the regulations to be applied. Basic principles of wage stabilization The first of these has to do with procedures. At the present time, wage stabilization is subject to needlessly cumbersome machinery. As now provided, wage policy must first be recommended by a Board representative of labor, industry, and the public. The recommendations of this Board are then subject to the arbitrary decisions of a single individual. This makes expeditious and just action impossible. Review by a single top Administrator, chosen for his general administrative experience rather than specific competenence in the wage field, adds nothing to the process of wage stabilization excepting uncertainty, procrastination, and arbitrariness. Wage-stabilization procedures should be revised so that the Wage Stabilization Board is given the status and authority to make decisions on matters within its jurisdiction. The wage-stabilization policy must permit the adjustment of wage rates to compensation for increases in the cost of living. Wage stabilization must not become wage freezing. This policy must also provide for the correction of substandard wages and the adjustment of inequities in existing wage rates within or between industries. The now well-recognized principle that wage earners should share in the benefits of industrial progress and increases in productivity which the Nation must and will have from its industrial workers, should be specifically embodied in the wage-stabilization policy. Any wage-stabilization policy must recognize existing collective-bargaining agreements which themselves assure stability. This would apply, for example, to the automobile and other industries where existing contracts provide for the orderly adjustment of wage rates. The abrogation of contracts arrived at through collective bargaining would inevitably lead to industrial unrest and this will defeat the very goal of stabilization. Overtime payments for premium work now protected by collective-bargaining agreements or existing law must continue to be held involate. These provisions do not in any way preclude the working of a workweek longer than that now considered to be normal. They merely provide the incentive for productive overtime and holiday work. Purchasing power An equitable tax, savings, price and rationing control program is the answer to this problem of excess purchasing power. Rising taxes upon the workers as well as the rise in living cost have already cut their purchasing power. Furthermore, the Government has embarked upon a program of stimulating the voluntary investment of as much as possible of current wage payments in defense savings bonds of the United States Government. The labor organizations stand ready to cooperate in every way in the attainment of this goal. Effective price and rationing controls will stimulate the flow of unspent income into voluntary savings. Savings will provide a pool of consumer purchasing power to drive the Nation ahead when the emergency is over and production of civilian durable goods may be safely expanded. Manpower Our labor force is the Nation's greatest single asset. Steps should be taken to strengthen and enlarge our manpower resources. These steps must recognize the fact that free labor can outproduce slave labor. Free labor will play its role in attaining our objective of maximum production. World War II experience demonstrates that maximum efficiency, cooperation, and morale can be secured through voluntary manpower policies. Use of compulsory civilian labor will defeat our efforts to attain our goal of maximum production. Conclusion American workers and their unions offer these suggestions in order to get the emergency production program under way as quickly and effectively as possible. We conceive it our responsibility not just to offer verbal assurances, but also to point out those difficulties and problems which must be solved if we are to achieve maximum national security. UNITED LABOR POLICY COMMITTEE. DECEMBER 20, 1950. |