Commentary Magazine


All-Out War on the Production Front?
Labor Looks to Political Weapons

Current labor-management struggles and tensions seem to most observers to mark a critical stage in postwar industrial relations, with serious implications, not only for the strength and stability of our domestic economy, but for American efforts to intervene effectively for the reconstruction of Europe. Moreover, the contesting forces may well be setting a long-range pattern for the future. Here, A. H. RASKIN, from his first-hand observation of the conflict in steel, coal, railways, automobiles, and other major industries, tries to chart the lines of battle, and to interpret their meaning both on the economic and political level.

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Two of America’s prime weapons in the cold war against Communism are the vitality of our democracy and the efficiency of our productive machinery. With the world looking to us for both moral and material leadership, it is depressing to report that we are moving backward in terms of the management-labor cooperation that is indispensable to a fruitful economy based on the principles of industrial democracy.

At a time when our responsibilities to the world and to ourselves require the smoothest and most continuous operation of our productive facilities, we are entering upon a period of mass strikes and conflict without parallel since the early days of the Wagner Act. The most alarming phase of the present discord is that it is accompanied, on the part of large sections of the labor movement, by a return to the old slogans of class struggle and distrust for the good faith of management.

Linked with this is a belief that government is being made the servant of industry, and that this process will become complete after the November elections. Even among the more moderate and responsible union leaders, there is a fear that labor will have to battle for its life during the next four years and that many of the present organizations will not be able to survive the battle.

The decision of the General Motors Corporation to raise wages by eleven cents an hour has made it plain that there will be no real showdown this year between industry and labor, but this major break in what appeared to be a “united front” of big business has not removed labor’s fears for the future.

A good deal of this fear stems from the myopic nature of labor’s relation to the community—a myopia that blinds it to its own faults and gives it an exaggerated sense of the hostility it must overcome. But there is enough solid basis for apprehension left to justify the kind of “digging in” that labor is doing today on both the economic and political fronts.

It is instructive to examine the elements that have given American unions such a sense of insecurity at a time when they are enjoying unparalleled prosperity in terms of membership and dues collections. It is also appropriate to consider the repercussions of the new situation on management-labor relations and on the present and future conduct of American politics.

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The passage of the Taft-Hartley Law year ago was the first red light in labor’s path, but most labor leaders had the feeling that the new weapons the law placed in employers’ hands would not be invoked until after the 948 election unless a major depression occurred before that time.

Early experience under the law tended to confirm this judgment. The unions that suffered most were those that refused to comply with the non-Communist affidavit requirement, but even among such unions the casualties were few. In coal and other basic industries, employers passed up the opportunity to challenge the union’s bargaining position on legalistic grounds of non-compliance with the Taft-Hartley Act. This was notably true, of course, in the cases of unions like the United Mine Workers, which were so deeply entrenched in their industries that the possibility of dislodging them could not seriously be contemplated, no matter how defiant they might be of the processes prescribed by the new law.

For the most part, pay increases and union security formulas were agreed upon without great difficulty and strikes dropped toward all-time lows. Four principal explanations presented themselves for this harmonious condition:

  1. Lush profit opportunities that made it wiser from a business standpoint to compromise with unions than to risk strikes.
  2. Confidence that the Republicans would win control of the White House, as well as Congress, unless labor became aroused by a feeling that employers were out to smash their unions.
  3. Lack of certainty about the legality of some sections of the Taft-Hartley Law and reluctance on the part of most employers to be “fall guys” in testing the disputed sections.
  4. Development in large sections of industry of stable working relationships based on mutual trust between employers and unions.

In the last four or five months, all of these factors have operated with much less force. In the first place, consumer resistance to high prices has had an impact on profit possibilities. In the second place, the emergence of a third-party ticket under the leadership of Henry Wallace has removed any doubt on the part of employers that the Republicans will win, no matter what happens to labor. In the third place, the National Labor Relations Board has enforced the Taft-Hartley Law with a vehemence that is often embarrassing to the authors of the statute and that far exceeds the expectations held by most employers at the time the law was passed.

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The fourth factor of stable management-labor relations has suffered as a result of the deterioration in the other three. This is best illustrated by the experience of the United Steel Workers under the leadership of CIO President Philip Murray. Mr. Murray, an earnest and able negotiator, with a firm regard for the sanctity of contractual obligations, had built up what he felt was a responsible two-way relationship with the United States Steel Corporation.

In 1947 Mr. Murray agreed to a “package” wage settlement that provided an increase of 15 cents an hour for workers in the basic steel industry. At that time the company gave assurances that it would not raise steel prices to offset this second-round wage rise. In return, Mr. Murray signed a two-year contract that provided for a wage reopening in April 948, but that established no machinery for arbitration in the event the company and the union could not agree on new pay scales at that time.

Subsequently, “Big Steel” used the granting of a wage boost to John L. Lewis’ miners as an excuse for increasing steel prices and thus negating this section of its “gentleman’s agreement” with Mr. Murray. With steel leading the upward spiral, living costs rose during the latter half of 1947, and continued to rise, except for brief dips, during 1948.

The steel workers approached their wage negotiations with some confidence that a pay increase of about ten cents an hour would be agreed upon. So far as can be learned, this was not based on any guarantees that had been given by the industry. In any case, the hope was rudely shattered.

Following the lead of the General Electric Company, U. S. Steel announced that it was opposed to a third-round pay rise on the ground that it would promote inflation. The company, which had jacked up its price list by about $28,000,000 a year in February, trimmed $25,000,000 off the list in April to demonstrate the sincerity of its position. The steel union, noting that the cut amounted to less than half a cent a pound on steel prices, denounced the company for “monstrous hypocrisy.”

The union’s leaders grew increasingly bitter as other steel companies barred wage increases and, in most instances, failed to make even token price cuts. Loyal to his contractual commitments, Mr. Murray passed the word to his locals that there were to be no strikes or slowdowns. But in his talks to union members, Mr. Murray became an evangel of hatred against “economic pirates, hijackers, and racketeers.” Abandoning his customary moderation, he set forth his conviction that the free enterprise system had been swallowed up in the greed of monopolistic corporations.

The same bitterness spread to other industries, where the no-increase pattern was repeated. Labor sought vainly to press its argument that profits were high enough to permit both price cuts and wage rises. Industry contended that the only way to combat inflation was to keep wages where they were (or even to cut them). Reductions in prices were usually confined to items in which stocks were piling up on dealers’ shelves for lack of buyers. Many companies did not even suggest the possibility that they would alter their price lists.

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It Must be acknowledged that experience in the first and second rounds of postwar pay increases lent considerable popular appeal to industry’s argument that another round would work out to labor’s long-range detriment by overloading an already top-heavy price structure. Labor missed out in not insisting on a fuller exploration of the interaction of wages, profits, and prices in a democratic society. With profits and prices racing upward, the notion that labor should carry the burden of fighting inflation almost single-handed by foregoing higher pay is hardly a tenable one. It puts the principal pressure on those least able to bear it and threatens a collapse of the total economy through curtailment of purchasing power.

Actually, the acknowledgment by industry of the relation between prices and wages serves to open up new vistas in collective bargaining if labor is clever enough to capitalize on them. If employers take the view that price considerations stand in the way of raising wages, then it is appropriate for a union to inquire into the adequacy of the price cut proposed by the company or the justification for maintaining prices at present levels.

This puts the union in the excellent strategic position of bargaining not so much for its own members as for consumers in general. Obviously a reduction in steel prices affects steel workers and all other citizens in roughly equal degree. Similarly with a reduction in the price of any other item that enters into the basic cost of living.

The unions have been slow to turn to their own advantage the new tack taken by industry. Instead of allowing themselves to be jockeyed into a position where they appeared to be fighting against the interests of consumers, imaginative union leaders would have demanded industry-wide or even economy-wide bargaining on price cuts sufficiently substantial to bring down the cost of living. It is not inconceivable that the National Labor Relations Board would have entertained charges of unfair labor practices if they had been brought by unions against employers who barred wage increases and refused to discuss lower prices.

A bargaining theory that ties together prices and wages also brings in such related factors as profit margins, operating efficiency, and even sales policies. Outside of the needle trades, industry has always attempted to stifle labor’s voice in the determination of production procedures. Now, by its unilateral action in ruling out higher wages for price reasons, management has seemingly unlocked the door to demands by labor for inclusion of every phase of business operation within the bargaining range.

One cannot escape the thought that a leader of Walter Reuther’s enterprise might have succeeded in dramatizing the implications of management’s new bargaining position had he not been hospitalized by an assassin’s bullet just as the new line was taking form. As one who sees economic problems in global terms, Mr. Reuther will undoubtedly adapt the price-wage pattern into an instrument of pressure against management in future negotiations.

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Even without Reuther, the auto workers did better than the rest of American labor. For this the credit is due more to General Motors, colossus of the industry, than it is to the union itself. Instead of following the pattern set by other large employers, GM took the view that industry should share with labor the responsibility for combating inflation and promoting efficient production.

Accordingly, the company proposed a pay increase plan under which allowance would be made for fluctuations in the cost of living and for positive improvement in the workers’ living standards. The new agreement, which will run for two years, represents an affirmation by GM of its faith in America’s stability and progress. Put forward at a time when all the trump cards appeared to be in management’s hands, it is a powerful refutation of the too facile assumption that there exists in this country a conspiracy on the part of big business to throttle trade unionism.

No one expects, however, that the GM settlement will usher in a period of complete peace or obliterate the memory of the defeats that preceded it. Too many unions have lost out even where the merit of the situation was overwhelmingly on their side. The recent strike against the New York Stock and Curb Exchanges was indicative. The union, complying with the requirements of the Taft-Hartley Law, had won union-shop elections among the employes of the two exchanges by margins of èleven and fifteen to one. Despite this overwhelming expression on the part of the workers and despite the enthusiasm the financial community had exhibited for the new labor law, both exchanges fell back on the well-worn position that they would not be party to requiring any employe to join a union against his will. All compromise formulations, including one that had been accepted by the Cotton Exchange, were turned down, and the union was finally obliged to settle on substantially the terms originally offered by the employers.

One outcome of this and similar situations in which workers have voted almost unanimously in favor of the union shop has been a loss of ardor for this section of the law by its congressional sponsors. It had been expected by some Congressmen that the election procedure would show that workers really did not welcome the union shop and that they were herded into such arrangements by union “bosses.” When the workers, under protection of a secret ballot, demonstrated their strong desire for union security, these same Congressmen decided the whole process was a waste of time and money.

This sophistry, coupled with the increasing frequency of injunctions and police assaults on picket lines, helps bolster the notion that government is on industry’s side in the current conflict. This feeling tends to persist even when due allowance is made for the extent to which government interference in labor disputes has been provoked by labor’s own perverseness.

Leaving John L. Lewis to one side, it must be conceded that unions have been something less than astute in picking their battlegrounds this year. The meat strike, which occasioned some of the worst picket-line melees, should never have been called. The CIO insisted on striking after the AFL had settled for 9 cents an hour. After ten weeks the CIO union went back to work on the employers’ original terms. It is the desperation produced by that kind of futile tie-up that reflects itself in violence on the picket line and the calling in of state troopers.

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The responsiveness of the present Congress to employer pressure and the probability that far more repressive measures are to come have convinced labor that the crucial fight in the next few years will be waged on the political, rather than the industrial, front. There will be few gains at the bargaining table until a more friendly atmosphere prevails in Washington and in state legislative halls.

This realization has thrust the unions into the political arena. In all parts of the country, elaborate organizations are being set up by the AFL, the CIO, the railroad brotherhoods, and the principal independent unions to mobilize labor’s voting strength.

Unfortunately for labor, there is little reason to expect that these organizations will exert a very potent influence on the election returns this year. The fact is that neither major party seems likely to put forward a candidate with enough magnetism to win the enthusiastic support of the rank and file.

President Truman has made it clear that he will endeavor to build his campaign around an appeal to labor, but most labor leaders are still hoping they can put across an Eisenhower or Douglas boom at the Democratic convention. If this fizzles—and the chances of success seem slight—Mr. Truman will probably have the half-hearted backing of labor’s high command. But there is little hope, in the light of the President’s ineffectuality as a national leader, that the mass of American workers will rally to the Truman banner. It is even more unlikely that any Republican candidate will have widespread labor support.

That leaves Henry Wallace as the potential recipient of a large part of the labor vote, despite the conviction of virtually all labor leaders outside the Russia First camp that his third-party candidacy was promoted by the Communists for the specific purpose of creating confusion in the country and blocking effective administration of the European Recovery Program.

Some of those who are least sympathetic to the new party concede that the Wallace vote may range between 6,000,000 and 8,000,000 if Mr. Truman is his Democratic opponent. A vote of these dimensions would be interpreted by Mr. Wallace’s backers as proof that the American people, and particularly the workers, are fed up with “red-baiting” in both its domestic and international phases.

Such a conclusion would not, in my judgment, square at all with what is happening in American unions today. The more discontented workers become with the existing political and economic situation, the less disposed they appear to be to embrace the Communists as trustworthy allies in seeking to improve things. It is not merely the top leadership of labor that is rejecting the “united front” philosophy; it is the rank and file as well.

The two biggest unions in the CIO—Philip Murray’s Steel Workers and Walter Reuther’s Automobile Workers—are both intensely anti-Communist, and the defection of Michael J. Quill and Joseph Curran from the left-wing ranks is expected to swing their unions, the Transport Workers Union and the National Maritime Union, into the anti-Communist ranks.

Another bulwark of the leftist group, the American Communications Association, has been whittled down to less than one-fifth of its former strength as a result of strike defeats and the transfer of large sections of its membership to anti-Communist unions in the CIO. Virtually all the other unions with a pro-Soviet orientation, including the United Electrical, Radio, and Machine Workers, largest in the group, are beset with internal difficulties and secession movements.

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Indeed, the sentiment against Communist penetration of the labor movement is so violent in some instances as to cause alarm among staunch supporters of the right-wing viewpoint. What amounted to a lynch spirit animated delegates to the Boston convention of the United Steel Workers last month. And reports of physical assaults or arbitrary removal of Communist sympathizers drift in from local unions in various sections. These manifestations are less disturbing to the Communists, who feast upon them as evidence that the “storm troop” variety of fascism has taken root in America, than they are to honest believers in the doctrine that the superiority of democracy to totalitarianism can best be demonstrated by the free exercise of democratic rights.

The depth of anti-Communist feeling in labor’s ranks makes it plain that any support Mr. Wallace receives will come in spite of, and not because of, his ardor for the Soviet cause. He will find himself the beneficiary of a gathering revulsion against both major parties and a feeling that labor needs an independent avenue of political expression. So profound is this feeling that it makes almost inevitable the development in the next four to eight years of a new political alignment rooted in the trade union movement but appealing also to farmers and the non-Communist Left.

No matter how many votes Mr. Wallace draws this fall, his party will not provide the nucleus for this realignment. The degree to which it is spotted with pro-Communists rules it out as a vehicle for the future. More probably the initiative for the new political instrumentality will be taken by men like Walter Reuther and David Dubinsky, who have been active in the affairs of Americans for Democratic Action, an organization dedicated to the carrying forward of a positive program for combating Communism and fascism through the strengthening of democracy.

The state of political impotence in which labor finds itself today has produced a surprisingly wide acceptance on the part of conservative leaders in both the AFL and CIO that it is time to reconsider the nonpartisan policy of “reward your friends and punish your enemies” that has been the touchstone of labor’s political credo since the AFL was formed more than sixty years ago.

How rapidly this challenging of old concepts will mature into independent political machinery is difficult to say. Both the CIO Political Action Committee and the AFL League for Political Education are beginning to recognize that it is not sufficient to throw together a political organization on the eve of an election. Both are thinking in terms of a permanent program of basic political education of a type that has been almost non-existent in this country up to this time.

The chances of success for such a drive in the visible future are dimmed by the continuing divisions in labor’s own ranks and by its failure to develop any real ties with agriculture, small business, or the professions. There have been some vague peace overtures made by the AFL to the CIO, but the tone still smacks too much of the invitation to the erring son to return to the house of his fathers.

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The coolness exhibited by the AFL high command to Paul Hoffman’s offer to appoint two deputies, one from the federation and the other from the CIO, to assist him in administration of the Marshall Plan, indicated the vast gulf that remains to be bridged before labor unity can be achieved. The rejection of Hoffman’s proposal was especially disheartening because the AFL a year ago had agreed to let Clinton S. Golden of the CIO Steel Workers represent all labor in the Griswold mission to Greece.

Impressed by labor arguments that Soviet efforts to paint the European Recovery Program as a Wall Street plot could most effectively be counteracted by giving labor top-echelon representation in running the program, Mr. Hoffman had proposed to name Mr. Golden and Irving J. Brown, the AFL’s dynamic European representative, to assist him in Washington and Paris. The AFL executive council rebuffed this suggestion with the brusque comment that it could not agree to CIO representation so long as the CIO maintained its affiliation with the World Federation of Trade Unions. Now there is considerable warrant for the AFL belief that the state-controlled Soviet trade unions exert a dominant influence in the WFTU secretariat, but the CIO, with the help of the British Trades Union Congress, has succeeded in recent months in putting substantial curbs on this influence.

Tossing in the sponge and leaving the field clear to the Russians and their satellites would seem to make little more sense than withdrawal of our representatives from the United Nations because of our inability to agree with the Soviet Union. There are too few avenues for interchange of views between our people and the rest of the world for us to be over-hasty in abandoning any of those that do exist.

The refusal of the AFL to cooperate with the CIO in the current political campaign, despite their common hatred for the Taft-Hartley Law and its sponsors, provides further evidence of the handicaps that must be conquered before a real labor party can be established. In some localities, however, joint political drives are already under way. This trend will almost certainly be accelerated as Communist influence is extinguished in the CIO and as legislative pressure against labor grows more intense.

One of the worst aspects of the conflict that lies ahead is that labor will be so preoccupied with fighting a rear-guard action in support of its rights that it will give diminishing attention to the need for working out a long-term program for community welfare and fulfillment of its national and international responsibilities.

Bread-and-butter problems will tend to take precedence over efforts to find more scientific methods of conducting management-labor relations and of safeguarding the public welfare. The Lewis brand of militancy is likely to gain in popularity in labor’s ranks, with an inevitable decrease in labor’s popularity with the public. All in all, it is not a pleasant prospect.

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But one thing is sure. The labor movement will not be wiped out. With fifteen million members and well-filled treasuries, American unions are not in the desperate position some of their more alarmist spokesmen like to depict. If nothing else assured them stability, the size of the insurance and welfare funds they administer jointly with the employers in their industries would be a powerful safeguard. The International Ladies Garment Workers Union has about $60,000,000 in employer-financed welfare funds. The Amalgamated Clothing Workers has $46,000,000. The United Mine Workers has $35,000,000.

Every one hopes, but no one is sanguine, that there will not have to be a revival of the strife that marked the rise of industrial unionism in this country. In the present state of labor’s strength, the results might cripple the world economy. That makes it highly desirable that the new President call, as early as possible in 949, a labor-management conference designed to work out a program for industrial peace based on cooperation rather than restrictive legislation.

At the same time labor will be giving increasing thought to ways in which it can stand on its own feet politically. Its future well-being is likely to be determined more by its effectiveness at the voting machine than by its militancy on the picket line.

In all of its policies and struggles, labor’s long-term hope resides in its ability to fuse its interests with those of the whole population. To the extent that unions are working for the common good, they will move forward in public esteem and support. To the extent that they measure the common good solely in terms of the self-interest of their own members, unions will lose out both economically and politically.

Wise employers will try to encourage a return to the principles of cooperation, but there is little sign that most of industry will accept this approach. We are in for a period in which extremists on both sides will have full sway, with most of the weapons in the hands of industry.

The most we can do is hope that the explosions ahead will not be of atomic proportions.

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