1952 Steel Strike - Organized Labor's Conflict With The WSB

Organized Labor's Conflict With The WSB

Unions felt that during World War II the National War Labor Board had unfairly held wages below the level of inflation while doing little to rein in corporate profits. The American Federation of Labor (AFL) and Congress of Industrial Organizations (CIO) as well as independent labor unions were determined to avoid a similar outcome under the new Wage Stabilization Board. On December 20, 1950, a United Labor Policy Committee (ULPC) composed of representatives of the AFL, CIO, the Railway Labor Executives' Association (a group of railway labor unions) and the International Association of Machinists formed to influence the WSB's deliberations on wage stabilization policy. The group demanded a yearly cost-of-living adjustment for all contracts, productivity pay increases linked to company profit margins, and price controls. But the WSB's public and corporate representatives were in agreement that the board should only focus on wages, and strictly control wages to keep inflation in check.

On January 26, 1951, ESA imposed nationwide wage and price controls. Labor representatives, who opposed wholesale wage controls, were outvoted nine to three.

Labor representatives on the WSB charged that they were being frozen out of policy deliberations, and they threatened to resign unless they were given more influence over the process. Ching resigned on February 9 to head off a mass resignation, ESA Administrator Johnston appointed the president of the Brotherhood of Railway and Steamship Clerks as his special assistant a day later, but the United Labor Policy Committee members were not placated.

Labor representatives believed that wage controls were particularly unfair to some workers. Some workers had received very high wage increases in 1950 prior to the imposition of wage controls, while others had yet to negotiate contracts or receive wage increases. Labor representatives demanded a 12 percent wage increase for workers who had not yet negotiated contracts under the wage stabilization policy, but the public and corporate members of the board held to a 10 percent increase.

On February 16, the Wage Stabilization Board issued Wage Regulation 6 which permitted a 10 percent increase in wages for those workers who had not negotiated a wage increase in the last six months. The regulation was based on the "Little Steel formula" of World War II. Labor representatives of the board resigned in protest. The mass resignations set off a crisis within the Truman administration. Unwilling to alienate labor by imposing wage controls involuntarily, Truman appointed a National Advisory Board on Mobilization Policy to come up with recommendations to win labor's support for wage and price controls. On April 17, the National Advisory Board suggested re-establishing the WSB with a greatly enlarged membership. The National Advisory Board also recommended giving the WSB the power to intervene in labor disputes. The WSB should have the power, the report said, to make economic and non-economic recommendations in labor disputes as well as submit disputes directly to the president.

President Truman re-established the WSB on April 21, 1951. In Executive Order 10233, Truman gave the new board the recommended expanded powers. Dr. George W. Taylor, professor of industrial relations at the University of Pennsylvania, was tapped to be the WSB chairman. Taylor agreed to serve only until September 1, 1951, however, and was succeeded by Nathan Feinsinger, a professor of law at the University of Wisconsin.

The expanded powers of the WSB created some controversy, however. It was not clear what statutory authority gave Truman the power to provide the board with its expanded powers. Congressional hearings over the reconstituted WSB's powers occurred as Congress also debated renewing the Defense Production Act. In July 1951, under pressure from numerous industries for price control relief, Congress enacted the Capehart Amendment to the DPA, which authorized companies to win price increases for costs incurred between June 1950 and July 26, 1951. Although opposed to the way in which the Capehart Amendment significantly weakened the administration's wage and price control program, President Truman signed the legislation on July 31, 1951.