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Susan Green

Steel Union Retreat Weakens
Fourth-Round CIO Wage Campaign

(19 September 1949)

From Labor Action, Vol. 13 No. 38, 19 September 1949, pp. 1 & 2.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The recommendation of the President’s fact-finding board against a wage increase for steel workers means that the board agrees with the steel companies’ contention that workers must not expect higher pay when their bosses are raking in profits hand over fist as the steel companies now are.

In spite of this outcome of the long hearings, the wage policy committee of the steel workers’ union accepted the recommendations of the board “with a unanimous rising vote” as the basis for settlement with the companies. Both the companies and the union have agreed to the President’s request that the truce in the industry be continued to September 25. Though the companies have not yet indicated their willingness to settle on the basis of the board’s recommendations, it is expected they will. This probably means no strike.

What makes the board’s findings acceptable to the union is the concession on social insurance and pensions to be paid by the companies, without contributions from the workers. However, the recommendation here is a far cry from the unions demands. The demands were for sickness benefits and for hospital insurance amounting to an increase of 6.27 cents an hour; and further for retirement pensions of $125 a month independent of government payments equalling another 11.23 cents’ hourly increase. On the other hand, the board’s low figures constitute little more than a token payment. It named around 4 cents for social security benefits. As to pensions, it mentioned a ceiling of $100 a month, the $100 tp include government old-age pensions. Such a pension plan would add no more than 6 cents an hour to the companies’ wage bill.

Demands Cut Two-Thirds

In cold figures, therefore, the union’s demands have been pared down to less than one third. The 12½ cents wage increase has been turned down completely. The 17% cents asked for security and pensions has been reduced to 8 to 10 cents.

Speaking to the press, Philip Murray said he “profoundly regrets that the steel industry board recommended against wage increases at this time and reiterates that: the union’s proposals for a 12 cents increase in wages is completely justified.” Contrariwise, the steel companies’ spokesmen hastened to interpret the board’s recommendations as an all-out repudiation of the Nathan report on which the wage demand was based. As a matter of fact, a reading of the board’s recommendations makes it clear that it was acting by its intrinsic pro-capitalist standards.

For instance, in rejecting a wage increase at this time the board said, among other things: “The workers in any such basic industry should not overlook the possible effects of their actions on the whole economy and thus on their own well-being.” This is an admonition to the workers that they must make sacrifices. Why? To maintain the capitalist system and to maintain it on the basis of more and more profits to the capitalists? This is reminiscent of the appeals for sacrifices under wage ceilings during the war – with no ceilings on profits.

Lenient to Companies

The steel companies, however, were handled with much more leniency. The board found that the use of “a substantial portion of recent profits for plant modernization and expansion was of benefit to the economy.” It did admit a “question in our minds” as to “whether a larger fraction of the expansion should not have been financed by long-term borrowing, thus enabling the payment of higher dividends to stockholders and the creation of reserves for the payment of retirement benefits to the industry’s workers.” You see, no “SHOULD” here as in the case of the workers, but only a mild question.

Of course, the “steel workers were found to have suffered no inequity from these uses” of the steel companies – of course not, the Nathan report to the contrary notwithstanding. But do not think that the board makes no “demands” upon the steel companies. It says: “It is to be expected that the modernization and expansion of steel-making capacity will substantially lower costs and thereby increase profits ... If and when this development occurs the consumers of the country will receive measurable benefits ... in the form of lower prices for steel products.”

But now, no lower prices now out of the billion-dollar 1949 profits. Banish the thought. With “continued and higher profits” – words of the board – then maybe lower prices for steel. Whereupon the steel companies hurry to point out that if they pay the 8 to 10 cents an hour increase for security and pensions, this “may lead to higher prices.”

Murray Bends Backward

What made Philip Murray say to the press that the board’s finding is “the most constructive contribution of its kind in our history”? Judging by the comments of other union spokesmen, the union leadership is pleased by the non-contributory basis of welfare and pension funds recommended. namely, that all payments into the funds should come from the companies alone. However, as pointed out above, in the board’s opinion $100 a month should be the pension ceiling for company and government payments combined. This will probably result in the steel companies favoring more social security from the government so that they will have to pay less on their own.

Be that as it may, the findings of the board do definitely state the principle of some responsibility of industry to its workers in sickness and old age. The words of the board defining this principle are interesting and worth quoting: “We think that all industry, in the absence of adequate government programs, owes an obligation to workers to provide for maintenance of the human body in the form of old-age retirement – in the same way as it does now for plant and machinery. This obligation is one which should be fulfilled by enlightened business, not when everything else has been taken care of, but as one of the fixed costs of doing business – one of the first charges on revenues before profits. It should be viewed as somewhat comparable to the necessity of making maintenance and depreciation allowances on nonhuman machinery.”

Men Or Machines

Presumably, for workers to be raised to the level of “non-human machinery” is progress, since heretofore industry has, by and large, regarded its workers as less than non-human machinery – that is, to be expendable without cost to industry. Certainly $100 a month, or less than $25 a week, will not allow retired workers to live like human beings. Needless to say, the working people will struggle to push themselves above the level of non-human machinery on which the board places them and to gain a more adequate living for their old age.

At any rate, the recommendations of the board, as outlined above, will be taken, by both labor and industry as the basis for discussing a settlement in the forthcoming fortnight. It is predicted that a bone of contention will be as to when the pension fund starts. Since the board advised a labor-management committee to investigate the pension situation and make a report by March 1st, 1950, the steel companies will doubtless want this date as the starting point. The union, on the other hand, will hold out for a retroactive provision. It must be noted that between now and March 1, the new Congress will take up the matter of social security and decide either to extend its provisions, to leave them as they are or even to contract them. This will, of course, affect the settlement in steel.

It is expected that the settlement in steel will be the pattern for all industries where workers have made demands for wage increases and for health and pension payments. This applies to auto, rubber, electrical, shipbuilding and other workers, whose wage demands probably will be denied but who may put a toe in the door of health and pension payments.

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