WSB Deliberations
Organized labor believed it was being frozen out of wage stabilization decision-making, and that political and economic pressure on Truman would push the president to establish a broad wage freeze. The Wage Stabilization Board assembled the steel wage panel on January 3, and opened hearings on Monday, January 7. Although economic stabilization officials were excluded from the panel's proceedings under E.O. 10233, they nevertheless attempted to influence the panel's deliberations. The day before the panel's hearings opened, Putnam announced ESA would seek a better wage formula than that contained in Wage Regulation 6. Ten days later, Feinsinger announced that a wage regulation rewrite would be undertaken as quickly as possible.
The hearings opened with the Steelworkers arguing for a wage and benefit increase estimated between 30 and 50 cents an hour, while the employers claimed no increase whatsoever was possible without price relief. ODM director Charles E. Wilson made it clear in a public statement on January 15 that the administration's inflation program would be wrecked if the workers succeeded in winning a wage increase larger than 4 cents an hour. Office of Price Stabilization economists were disturbed the union's request. A secret internal memorandum by OPS staff members indicated that the union was actually due a 22-cents-an-hour wage increase, and that the steel companies could absorb up to 40 cents an hour in additional costs without a price hike. But for the union to win a wage increase without giving the employers price relief would appear inequitable and create political problems for both OPS and WSB with Republicans in Congress.
On January 12, the union and the steelmakers agreed to meet privately, outside the steel wage panel's auspices. Both sides felt agreement could be reached on six non-economic issues: grievance procedures, arbitration mechanisms, improved suspension and discharge procedures, health and safety issues, military leave, and the contract's preamble.
The steel wage panel recessed for three weeks after its opening hearings in order to allow the employers time to make their arguments. In the interim, OPS announced it was granting the steelmakers a price increase of $2 to $3 per ton—even though they had not applied for it. OPS chief DiSalle hoped that the price increase would placate the employers and relieve pressure on the steel wage panel. But the employers began publicly talking about a price increase of $6 to $9 per ton, and the stratagem failed.
Press speculation that the union would win a 14 cent an hour wage increased after Shulman made a similar recommendation in an unrelated aircraft industry workers' collective bargaining case on February 9.
The employers countered with testimony indicating the steel industry was on the verge of bankruptcy. When hearings resumed February 2, Retired Admiral Ben Moreell, president of Jones and Laughlin Steel Company, declared the steel industry to be financially insecure. He estimated the cost of the union's wage and benefit package at $1.08 an hour, not 30 to 50 cents an hour. The estimate was more than double the industry's previous assessment. Benjamin Fairless, meanwhile, testified that the wage demands would reduce steel industry profits so much that the federal government would lose more than $11 billion in tax revenues.
The employers also countered with a massive public relations campaign. The steel manufacturers had decided to wage a public relations campaign early in the wage dispute, possibly as early as August 1951. They coordinated their anti-union effort by forming a group called "Steel Companies in the Wage Case," and relied on the resources of the American Iron and Steel Institute as well. Designed to emphasize the patriotism of the steel companies during wartime, the public relations campaign was implemented in newspapers and on radio and television stations nationwide. The campaign attacked not only the union but also the WSB and the Truman administration generally. The public relations campaign asserted that "runaway inflation" would occur if steelworkers' pay rose even minimally. A pay increase, it was said, would ruin the economy of the Deep South, "hamper the country's defense against atomic attack, undermine our foreign economic policy and introduce totalitarianism". The steel industry also charged that union proposals would create such inefficiency that workers would be driven to "radicalism and communism" in sheer frustration. In United States Senate hearings after the strike ended, the Senate Committee on Labor and Public Welfare denounced the public relations campaign in very strong terms, accusing the steel companies of undermining the work of a government agency:
- outpouring of propaganda and scare advertisements before, during and after the Wage Stabilization Board's deliberations was not calculated to create an atmosphere in which the union and management could come to a settlement on their own. ... The processes of collective bargaining are difficult enough without the accompaniment of a hysterical chorus egging one of the parties on to battle.
The steel industry completed making its case on February 14. Final arguments were made against the union shop. The issue had taken on increasing importance to the steel manufacturers over the previous three months. Many of the chief executives of the larger steel companies came to see themselves as the last bulwark against wholesale unionism. Fairless, in particular, felt that if the WSB included a union shop proposal in its recommendations, the ruling would put the government's imprimatur on unionization. The steel industry, it was felt, was the last defender of capitalism and the free market.
The steel wage panel concluded its hearings on February 16, 1951. The issues proved so numerous and complex, however, that the panel advised the Wage Stabilization Board that it needed until March 13 to complete its report. The union was asked to extend its strike deadline. Despite Murray's accusation that the government intended to provoke a strike, the union gave the WSB until March 20 to issue its wage ruling.
As the hearings ended, OPS Director DiSalle resigned on February 15, 1952, in order to run for the U.S. Senate. Truman appointed Ellis Arnall, a former governor of Georgia, as DiSalle's successor.
The wage panel turned its report over to the Wage Stabilization Board on March 13.
Read more about this topic: 1952 Steel Strike