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Roundtable Discussions at White House Economic Conference
EDITOR'S NOTE.-The White House Conference on National Economic Issues, called by the President on recommendation of his Advisory Committee on Labor-Management Policy and held May 21-22 in Washington, heard 16 papers delivered on four broad subjects. Space limitations prevent even brief excerpts of all of these papers. However, there also were roundtable discussions devoted to the four main topics. Speaking without text before a plenary session of the more than 200 conferees from labor, management, government, and other groups, each roundtable moderator summarized his group's discussion. These summaries are reproduced below from the verbatim proceedings, with as much of the original language pre
served as ease of reading makes possible. The summaries reflect those matters with which the conference attendants were most concerned.
The subjects and moderators of the roundtables were: Free and Responsible Collective Bargaining and Industrial Peace, David L. Cole, arbitrator; Economic Growth and Sound Wage and Price Policies, Dr. George W. Taylor, University of Pennsylvania; Benefits and Problems of Automation, Dr. Clark Kerr, president, University of California (the summary was given by Dr. Robben W. Flemming, University of Illinois); Policies to Make American Products Competitive in World Markets, Dr. Arthur Burns, president, National Bureau of Economic Research.
David L. Cole
There is no homogenized view, of course, as you may have surmised, on collective bargaining and industrial peace. Our discussions centered about five points.
The first problem was union size, sometimes called union monopoly power. The second was intervention by Government or by other third parties. The third was the nature and the responsibility of the parties who are engaged in collective bargaining, social responsibility. The fourth was: Do we have too much or too little Government regulation of collective bargaining? And the fifth was sort of a late starter, in order to keep our meeting going and to meet the objection that one labor representative interposed, namely, that we're always talking about something that happened in the past. We gave him a current dispute to talk about, namely the current railroad dispute.
It is not surprising to me, and I'm sure not to you, to find that the views are so in conflict with one another. I'm not going to try to outline them all, but on the subject, for example, of whether unions are too big, whether they constitute some form of monopoly that has an evil overtone to it, I found that this view, which was
expressed by Mr. Keener [J. Ward Keener, president, B. F. Goodrich Co.], was by no means shared by other representatives of management.
For example, those in the maritime industry and the railroad industry, and at least one large manufacturing enterprise representative, stated by no means would they want to see their unions fragmentized. Quite the contrary. They think their unions are too small now. It would be much better to have industrial-type unions with which they could develop some stability.
On the union side, of course, the suspicion was openly expressed that the purpose of the objection to union monopoly, so-called, was a desire to weaken unions in collective bargaining, rather than other purposes.
The representative of one very large basic industry made a very frank statement. He indicated that the collective bargaining in that industry with an industrial union was quite satisfactory. He found no fault with it, but he was concerned about the existence of a power in any labor organization, any private organization, to be able, under certain circumstances, to shut down the operation of that very basic industry, and he really raised it, not by way of criticism, but by way of question, which he left with the group and which I in turn pass on to you.
The same thing was true on the subject of intervention. Some thought we have too much Government intervention; others thought we have too little and too late.
On the nature of the responsibilities of the parties, the principal speakers were on the labor side, and there were labor people who were quite critical of the fact that so-called social responsibility was equated merely with the threat of inflation. They thought this was aimed directly at the unions.
On the other hand, another very responsible and very important labor representative stated that he thought that while the unions are primarily responsible to their members and must watch out for their members' welfare, there is an overriding responsibility to recognize that there be no increases beyond the capacity of the industries at least the basic industries-to maintain their present price structure, and this he recognized as a definite responsibility on the part of labor.
On the question of too much or too little law, our professors were the principal spokesmen. One professor thought we could profitably repeal some of our present legislation and get along much better. Another took exception to that and thought that Government was not meeting its responsibility fully in not clearly defining what the responsibility of the parties is as the Government sees it, and this was developed at some length; the Government has a responsibility of defining its own responsibility in major labor disputes or those which may threaten the national welfare.
On the current labor dispute [involving railroad unions], it was indicated that extraordinary measures have already been used, and we posed the question as to what the participants in the discussion thought that the Government ought to do when the Emergency Board which may be appointed concludes its work in 30 days and the status quo period expires in 60 days, bearing in mind that we have already had an extraordinary Presidential Commission which made a report after a year of study.
All I can say for the discomfort of the Secretary of Labor is that probably it was summed up by one man saying, "We'll have to play it by ear from here on out."
George W. Taylor
We were unanimous on one point, and that is that there should be more time to discuss a subject such as this at a roundtable discussion and, indeed, that more time should be allotted for roundtables as contrasted with plenary sessions.
But as respects this whole question of economic growth and wage-price policy, we were commended for combining the two. At the outset there was a question as to whether or not a wage-price policy can be compatible with what we're seeking to do in terms of economic growth, whether or not it might even interfere with the attainment of full employment, full utilization of resources, and economic growth.
I would phrase it this way. How consequential to economic growth is a wage-price policy? Some people indicated even that they think a policy might be adverse to the growth.
I think it's quite clear there is a fear, perhaps, of price increases, of an inflationary trend that would develop should there be a full utilization of resources, and this raises the whole question of timing.
I think that there is an underlying fear of inflation and a great emphaisis given to the balance of payments and gold flow problem, which makes it desirable nevertheless to move in the interests of economic growth into the wage and price area at this time.
When one reads the report of the Council of Economic Advisers, in which a wage policy is indicated, I think it should be underlined and made clear that the basic purpose was to initiate a discussion of problems such as I've just indicated; to initiate discussion; not to enunciate a policy, and certainly not even to enunciate guidelines that should be rigidly applied currently.
As I read the report, the least important aspect of it, as respects guides for day-to-day wage determinations, is the averages. Indeed, the important part for people in their private wage determinations is the guides which are given for deviation from the average, and [these] need more careful discussion.
We're also impressed by the fact that in application, perhaps because of lack of understanding, an undue emphasis has been placed upon what is
to result from this policy in terms of the average, rather than the guides for policy in day-by-day determination.
Those who did understand the policy held the view that the whole expression of this policy and the first step toward it indicate a very constructive sort of thing-that we do need a temperature chart of how the economy is doing in order that we might ultimately make our private actions compatible with the needs of the economy as a whole.
Some people indicated that in their own bargaining, the availability of these guidelines was helpful. For example, one person said that they were very helpful. Well, what wage increase was given under it? He said 4.5 to 5 percent, and he was using the measures which were to provide for increases above the average at the end of the year. But it's quite clear that the policy is not widely understood and that its application in private decisionmaking is somewhat difficult. Nevertheless, there were those who urged that we continue on this road. however, would have us drop it, not just because it was deemed incompatible with the attainment of economic growth, but that it might be a step on the road to wage and price controls under governmental auspices.
There was one other area of discussion that I think needs to be indicated. The President, in opening this conference, indicated that we should take a look at European countries and what they have been doing in this area. It was indicated that those European countries which have had wage policies such as the kind we're talking about had to do with short-run measures oriented to particular problems.
I think the second thing about the foreign experience that stands out is that it is also related to bargaining institutions conceived quite differently from those in our country; that is, where wage stabilization policies have been instituted in other countries, not only have they been short-run, but they have been in terms of tripartite collective bargaining on a national basis. We think that we should study and learn more of this experience.
There was a final point of view expressed that we now have an enunciated policy which changes the environment to which people are having to conform in their own negotiations. The fear was ex
pressed that this could contribute to wage increases which would be greater than would have been obtained in the absence of such a policy, and references were made to experiences in the past. It was thought that perhaps this should particularly be evaluated, since there are those who concede these policies to be applicable mainly to key industries which might have a more direct effect than others upon balance of trade and gold balances. Their impact on other industries less amenable to "control," might have an effect which is not anticipated.
Robben W. Flemming
There was a clear consensus that in talking about automation and technological change, we really didn't mean what we said by the use of those words. Almost all of us, when we talk in these terms, really mean changes in displacement in the labor market, by no means all of which flow out of either automation or technological change.
It was pointed out, for instance, that some of the most significant changes don't come out of automation at all, but come out of the fact that you get replacements of whole industries-for instance, when the missile industry replaces the air freight industry.
Secondly, there was implicit in all of the conversations an understanding, though it was not further discussed, that the longrun solution to these problems is that kind of economic growth which produces more jobs.
There was then discussion of three specific situations: The West Coast longshore industry and the collective bargaining contract which has been in operation out there for the past couple of years, and I suppose the significant thing that emerges from that is the fact that [it] takes care of the people who remain in the industry. Little or nothing [is done] for the people who are totally displaced from the industry.
The discussion with respect to the Armour Automation Committee revolved about the light which it casts upon the question of retraining and some of the dubiety as to whether or not this can constitute any longrun solution.
There was a discussion of some of the problems on the railroads, particularly with respect to earlier displacement of boilermakers (which was ac
complished with relatively little difficulty as compared with some of the present situations).
Then there was a very brief discussion of the manpower legislation which, as you know, will provide retraining for only about 100,000 people [in its first fiscal year-1963]. Perhaps two things could be said. First, that there is a very low dropout rate of the people who have been retrained so far; those people who are given this opportunity do carry through. Second, that of those people who are retrained, there is up to this point a very high rate of placement. Now, that may or may not be very significant, because under the provisions of the law, as you will recall, one of the conditions of training is that the person have reasonable prospects of a job.
Two other matters require reporting. One of the deficiencies we have is in our analysis of the labor market and the utilization of people, the kinds of skills that are needed, the kinds of education that are going to be needed in the future labor market.
There was an additional suggestion that we had insufficient information, even in the big industries, as to what the future job requirements were going to be; that there ought somehow to be a clearing house in which we could better judge what both our immediate and what longrun job needs will be, based in part upon technical developments which are yet to come. In addition, there should be recognition of the difficulties involved in trying to project totally new kinds of industries and totally new kinds of job requirements. The suggestion was that this was a matter which the President's Advisory Committee on Labor-Management Policy might wish to discuss in its future sessions.
Finally, there was a discussion of the matter of reduced working time. I don't need to report to you that there was not a complete agreement on that subject. There was agreement that we too often talk of a shorter workweek when in fact what we're talking about is less working time [however] achieved. There was a specific discussion of the experience of Local 3, International Brotherhood of Electrical Workers in New York City and, aside from the question of the cost aspect of a shorter workweek, there was then considerable discussion of the question of whether in fact a shorter workweek produces more jobs for
people. The conclusion is simply that this is a question [concerning] which there are all kinds of gradations [and] that there must be experimentation in various industries.
The members of the group expressed a feeling of very real concern about the state of our balance of payments. I believe also that they felt rather strongly that our Nation strives for an increase in exports to better meet its international political commitments.
As for methods of increasing exports, numerous suggestions were made. Some emphasized the need for greater imagination and greater enterprise on the part of business firms in holding and enlarging and in penetrating markets abroad. Others emphasized the need for moderating the pace of wage increases so that our domestic costs and our domestic price level may be kept under reasonable control in the interest of enabling our export industries to remain competitive, if not to become more competitive. Still other members of the group emphasized the importance of large and reciprocal tariff reductions.
There were other views expressed. For example, one member urged that attention be given to our antitrust legislation; perhaps some revision would enable American industry to enlarge its exports. Another suggestion was that all of us, particularly Government officials, give greater attention and more thought to the problem of meeting trade competition from the Communist sector, which threatens to become a more important problem. And still another member made the very interesting suggestion-and I believe potentially a very fruitful suggestion-that labor and management committees be set up in individual industries with a view to exploring ways of meeting the foreign competition.
That probably is the range of suggestions made by different members of our group. While there was general agreement that expansion of exports is important, there also was some sentiment that our balance of payments problem cannot be solved by the export rout alone. That is to say, some members of the group felt that it is too much to expect that this stubborn problem can be solved by increasing exports, that it is desirable to
do it as far as possible, but that an expansion of the magnitude that would be required may not be attained, or may be unattainable. Therefore, we found ourselves discussing other ways of meeting the balance of payments deficit, and particularly we found ourselves discussing the question whether, and by what means, private investment abroad by Americans might be reduced.
I cannot report unanimity on that question, nor can I in general report unanimity on the question of the speed with which members of the group felt our Nation ought to move to restore equilibrium in our international accounts. And yet, I think I am correct in saying that a feeling of concern was shared by practically all of us. I for
one had the feeling that different members of the group were emphasizing one or another way of tackling the problem, and that the differences of conception were not as large as the differences in expression.
Finally, let me say-and here I think I speak for the group as a whole-there was a feeling that we had learned something from the interchange. There was a feeling on the part of the group that the meeting could have continued usefully for a longer period, and I believe members of the roundtable supported me in the suggestion that the Secretaries of Commerce and Labor give thought to organizing fairly frequent meetings of small groups to discuss specific problems.
a political role poses new problems for labor. To the extent that labor has to square its particular needs against the national interest, it finds itself increasingly torn between a series of public and private commitments. The United States labor movement, for example, is internationalist-minded and favors the expansion of world trade. However, efforts to increase the shipping capacity of the Norwegians and British, whose shipping plays an important role in their economies, is met with protest from the United States maritime unions who want more shipping done in American bottoms. All labor is for cheaper electric power, but the miners and railroad unions have skillfully lobbied against the development of the St. Lawrence waterways, because of the deleterious effect that project might have on their employment. Nearly all labor is for reciprocal trade, but particular unions want exemptions or quotas for the products which concern them; and efforts to reduce the tariff finds many unions voicing strong and anguished protests. These contradictions can easily be multiplied. As labor is forced to develop a more consistent and coherent political ideology in its electoral appeals, the strain between the public and private roles may be increasingly difficult to reconcile.
-Daniel Bell, "The Worker and His Civic Functions," Monthly Labor Review, July 1950, pp. 67-68.