Report of Presidential Committee on Free Collective Bargaining


EDITOR'S NOTE.-The Advisory Committee on Labor-Management Policy reported to the President on May 1, 1962, on free and responsible collective bargaining and industrial peace. Excerpts from that report are presented in the following article. The Committee's report relating to automation was published in the February 1962 issue (pp. 139-144) of the Review. COLLECTIVE BARGAINING is an essential element of economic democracy. The freedom-of-choice elements in collective bargaining derive from the basic principles of the free society and must be carefully preserved to help achieve our national goals. It is equally important, at a time when world tensions underscore the need for democracy's institutions to work most effectively, that collective bargaining be responsive to the public, or common interest.

The service of these coordinate purposes warrants attention to two interrelated courses of action: First, development by the parties to collective bargaining of improved methods for reconciling their separate and mutual interests with those of the larger community and for reducing still further the extent of avoidable interruptions of operations; second, improvement in the procedures for enlisting the services of Government for the aid of collective bargaining when needed, particularly by strengthening the mediation process and by improving the procedures for handling disputes which threaten the national health and safety.

Progress of Collective Bargaining

By free collective bargaining, we mean the opportunity for labor and management to work out their own problems and to arrive at voluntary agreement concerning them. All members of this Committee are convinced that free collective bargaining should constitute the primary procedure by which the essential terms and conditions of employment shall be determined. Indeed, this is today, as it has been for at least a quarter-century, our declared national labor policy.

When obstinate industrial disputes have occurred, involving strikes in important industries, there has been an inclination to question the efficacy of collective bargaining. Its record emerges, nevertheless, as one of outstanding progress within a single generation. Since 1947, the amount of working time lost because of strikes has averaged less than one-third of 1 percent. The record for the past 8-year period has been better than this. The total number of work stoppages continues to decline, and the average length of strikes on the whole is decreasing. Strikes over grievances have been substantially eradicated, by providing through collective bargaining for the use of voluntary, binding arbitration.

Preservation of Freedom-of-Choice Elements

The continuing recognition of the right of employers and unions to reject a proffered agreement, even at the expense of interrupting operations, has constituted an essential feature of free collective bargaining. Recognizing this, we count it important to minimize interruptions of operations without destroying or impairing the essential economic motive force of free collective bargaining. We note the importance of recognizing that the representatives of the parties have a duty to be responsive to the desires of their respective constituencies.

We are opposed to any governmental imposition in peacetime of substantive terms and conditions on the parties. We reject the idea that there should be any legal requirement that disputes be resolved through compulsory arbitration.

In the institution of free collective bargaining, the objective is voluntary agreement arrived at through the process of reasoning and persuasion. In proposing improved procedures, we seek to have collective bargaining become more effective and responsible, so that it may remain free.

Responsiveness to Public Interest

Preserving the free and voluntary nature of decisionmaking which collective bargaining represents requires a full realization by representatives

1 The members of the Committee and their affiliations are listed on p. 139 of the February 1962 issue of the Review.

of labor and management that the privilege they enjoy to agree or disagree on terms and conditions of employment can be preserved only if it is exercised responsibly.

We believe that the parties have for the most part learned to respect each other's responsibilities, with management recognizing the union's representative functions to advance the welfare of its constituency and labor acknowledging the responsibilities which a system of private ownership and free competitive enterprise places on management to operate efficiently and profitably.

The growing complexities of our own industrial society and the instabilities of the international setting now require that the parties recognize not only their own individual responsibilities but their joint responsibility to the society of which they constitute an important and integral part. This calls for improved private and public procedures and techniques and above all for an increased measure of maturity.

Conferences on Broad National Interests. Collective bargaining implies necessarily the right of the parties to disagree. We also believe that in a mature labor-management relationship, economic force should be resorted to only as an ultimate weapon and reserved for disputes which do not respond to other and more reasonable means of resolution. Its frequent and repeated use is a sign not only of unimaginativeness but also of a considerable degree of irresponsible inflexibility in one or both parties.

The role of the United States in its relations with the other nations of the world, its programs for assuring adequate economic growth and full employment, the effects of major technological developments on the economy at large, and the functions of wages, prices, and profits in the economic system are all matters of vital interest. Yet unless their contextual relationship to collective bargaining is understood, they can only too easily be ignored.

If unions and managements are to give consideration to these broader national interests, they can do so only within a framework of reliable information concerning the state of the economy, reasonable expectations as to the future, and a frank interchange of opinion between union,

management, and government representatives as to the significance of these data for industrial relations.

We have proposed, and the President has approved, the convening of periodic conferences of labor, management, and public officials under Government auspices which will be addressed to national and international influences affecting economic problems.

Conferences of this type should help clarify the context for responsible collective bargaining and develop a more informed viewpoint for future negotiations. [They] can apprise parties of relevant governmental objectives and policies and also provide an opportunity for industry and labor spokesmen to offer constructive recommendations to the Government.

Improvement of Factfinding Procedures. Fuller cooperation by labor, management, and Government in developing and making available pertinent data can facilitate sound and equitable collective bargaining decisions based on reason with a minimum disruption of operations. Factfinding approaches, including questions as to whether and under what circumstances a joint endeavor might be most helpful, must of course be left to the parties themselves in the natural development of their bargaining relationship.

Yet, factual data, always valuable, can be of greater value than heretofore recognized at the early stages of negotiations. In preparation for negotiations, the parties might jointly determine what information is relevant to issues which have been or are likely to be raised. If the facts sought are in the public domain, or obtainable through public agencies such as the Bureau of Labor Statistics, Department of Labor, or the Bureau of the Census, Department of Commerce, a joint request should be addressed to such agencies as far in advance as possible, specifying the data desired.

At other times, it is likely that the facts sought relate to company or industry operations and must be developed by the parties themselves. We recommend greater experimentation by the parties with techniques of factfinding by jointly appointed outside experts or by personnel drawn from their own staffs.

Other Forms of Third Party Assistance. While the objective is for the parties themselves to reach agreement, on any issue concerning which this proves difficult or impossible, we believe they may make effective use of various available private techniques in order to achieve agreement.

The form of third-party assistance is secondary to the parties' willingness to enlist such assistance. Whether they obtain it from Government or from some private agency, or whether it takes the form of mediation, factfinding, recommendations, or voluntary arbitration is less important than the good faith of the parties and their willingness to let it function in their mutual interest.

We do not in any sense imply that the use of third-party procedures is a preferable objective, or that the use of third parties will lead to more desirable long-range relationships or sounder settlements. These are only supplementary procedures. The central emphasis must be on the development of bilateral relationships based on sufficient maturity, sophistication, and judgment to enable the parties to work out solutions appropriate to their particular circumstances. Responsibility flourishes best in an atmosphere of self-reliance.

Strengthening the Public Mediation Process. In all but relatively few exceptional cases, the Federal, State, and local mediation services provide the only appropriate form of governmental service. Mediation can be of great help in encouraging more forthright use of reasoning and persuasion and in disabusing an overly suspicious party of the impression that the other has come to the bargaining table with ulterior purposes. This service is not easily performed, and, as many experienced mediators agree, it would be wise to develop means of imparting greater vigor and influence to the function of mediation as a greater help in collective bargaining.

We understand that in order to function more effectively, the Federal Mediation and Conciliation Service currently has plans to raise the professional status of its mediation staff, to participate actively at an earlier stage in the more difficult and important cases, to make more use of panels of mediators, and to establish the national labormanagement panel provided for in the Taft

Hartley Act, while continuing to remain an entirely voluntary process. We also suggest that regional counterparts of this panel could be of help.

Critical and National Emergency Disputes

In the case of major disputes, involving whole or important segments of critical industries, extraordinary measures may be necessary. Extraordinary measures should be applied with great restraint and only when no other means are available to protect the national health and safety. Whenever it becomes necessary to place restraints or inhibitions on the freedom of the parties to pursue what they consider to be legitimate objectives, it is imperative that methods be provided for equitable solution of the disputed issues.

The Committee accordingly recommends, in place of the present emergency dispute provisions of the Taft-Hartley Act, the following procedures:

1. The Director of the Federal Mediation and Conciliation Service would have the authority to recommend to the President the appointment of an Emergency Dispute Board in any collective bargaining situation in a major or critical industry which may develop into a dispute threatening the national health or safety. This Board would be authorized to mediate between the parties and to recommend procedures or techniques to them which appeared conducive to settlement. The Board should work closely with the Federal Mediation and Conciliation Service. When deemed necessary the Board could seek authorization from the President to make, and would be empowered with his approval to make, recommendations to the parties as to terms of settlement of the issues in dispute.

The members of this Board would represent the public, it being recognized that in certain cases it would be advantageous to include members with labor or industry background. The Board could be appointed at any stage in the negotiations, and the decision whether to set up any such Board would rest with the President.

2. The President would be authorized to direct the Board to hold a hearing on the question of whether a strike or lockout or threatened strike or

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lockout in a major or critical industry threatens the national health or safety. Upon receipt of the Board's report, the President would be authorized to determine whether such threat exists and to declare, if he so finds, the existence of a national emergency. On the declaration of such emergency, the President would be authorized to direct the parties to continue or resume operations in whole or, to the extent practicable, in part, until agreement regarding the dispute was reached, but in no event longer than 80 days. The President's declaration of emergency should be subject to judicial review at the instance of any affected party.

3. Upon such declaration of emergency, the Board would be authorized to continue mediation as between the parties, to make findings of facts regarding the issues in dispute and related matters, and to make recommendations to the parties and the public at the President's discretion regarding settlement of these issues, including any recommendation which might appear appropriate regarding the effective date of any adjustment in previous terms and conditions.

The Board would

also be authorized to make recommendations at any time to the parties regarding any changes in terms or conditions of employment which in its judgment should be put into effect during the 80day period on a concurrent or retroactive basis."

4. We recommend eliminating, in view of its demonstrated ineffectiveness, the last offer ballot procedure contained in the present law.

5. If, despite the efforts of the Board, it appeared likely that there would be a strike or lockout at the expiration of the 80-day period, the President would be authorized to refer the matter to Congress, with his recommendations for appropriate action.

Even though the additional governmental powers recommended are mild compared with other suggestions which have been made for dealing with critical and national emergency disputes, we regret that a further intervention by Government into free collective bargaining is necessary. Nevertheless, inasmuch as the welfare of vast numbers of our citizens who are not directly concerned in these disputes is involved and the economy of the country is often adversely affected, we conclude that there is a clear need for more

effective governmental action under existing circumstances.3


Some among the Committee members feel strongly that there is today a concentration of power in certain unions which results in the impairment of effective collective bargaining and in the substitution of power for reason in this process, and accordingly constitutes a major threat to industrial peace. Other Committee members have pressed with equal vigor the view that whatever danger there is from concentration of economic and financial power has developed basically on the corporate side and that protests against "labor monopoly" are essentially distorted.

The view of the substantial majority of the Committee is that this matter warrants special study which will permit a thoroughgoing and deliberate examination of this issue, but that the present report-containing so much of important consensus should not be held up awaiting this study. The Committee has accordingly decided to proceed with the proposed study and to make it the subject of a subsequent report.*

Labor members George Meany, David Dubinsky, George M. Harrison, Joseph D. Keenan, David J. McDonald, and Walter P. Reuther: The proposal that the Board would be authorized to make recommendations to the parties regarding any change which in its judgment should be put into effect during the 80-day period on a concurrent or retroactive basis seems ineffective and illogical. If the President has authority to order the employees to continue or resume work for 80 days, he should have authority to order whatever terms and conditions of employment he finds to be equitable.

* Management member Henry Ford II: The present national emergency provisions have had remarkable success in fulfilling their intended purpose. I would confine changes to eliminating the requirement for a vote on the employer's "last offer." In my opinion, the remaining changes indicated here would weaken the whole concept of free collective bargaining, and would not help to alleviate national emergency strikes.

To extend the scope of sanctioned intervention to any "major or critical industry" would set up a standard that is undesirably vague, and that seems to me clearly to be broader than the concept of disputes imperiling the national health or safety now embodied in the law. Orders to continue or resume operations should be issued through judicial process, as at present, rather than at the discretion of the President.

Factfinding boards with power to recommend terms of settlement would be both unjustified and unwise. I do not agree with the statement that this provision is necessary because the act, as it now stands, limits the freedom of the parties to reach settlement in their own way. The act only postpones strikes and lockouts; it does not prohibit them. The past performance of the factfinding-with-recommendations approach is not impressive. The record indicates that its use severely weakens collective bargaining and is likely to lead ultimately to compulsory arbitration.

4 EDITOR'S NOTE.-Separate statements on the subject of the concentration of power were filed by the following Committee members: Management member Joseph L. Bloch; public member Arthur F. Burns; management member Henry Ford II; and, jointly, labor members George Meany, David Dubinksy, George M. Harrison, Joseph D. Keenar, David J. McDonald, and Walter P. Reuther.

Employment in Relation to
U.S. Imports, 1960

EDITOR'S NOTE.-This article is the second of a series based on a continuing study of the impact of foreign trade on domestic employment by the Bureau of Labor Statistics. It summarizes a report of the same title which was issued in April 1962. The previous article, on domestic employment attributable to U.S. exports in 1960, appeared in the March 1962 issue of the Review.


ACTIVITIES Connected with U.S. imports of $15 billion in 1960 produced an estimated 941,000 jobs in this country, the Bureau of Labor Statistics found in a recent study. These jobs, together with the 3.1 million that were estimated in an earlier study to result from U.S. exports, yield a total of approximately 4 million jobs in activities attributable to U.S. foreign trade in 1960. Thus, the Nation's foreign commerce accounted for more than 7% percent of its private employment in that year.

The estimate of 941,000 import-related jobs is an approximation of the number of people employed in transporting, distributing, and processing imports. A second estimate given later in this article attempts to answer the hypothetical question, "How many U.S. jobs would be required to produce in the United States those imports which are considered competitive with American goods?"

Developing both estimates presented difficult problems of concept and measurement because of the dual nature of the impact of imports on the U.S. economy. Imports range from those products either not produced at all in the United States or produced in quantity insufficient to satisfy the country's economic needs to those which might be considered directly competitive with U.S. products of the same categories.

In this study, the classification of imports is that developed by the U.S. Department of Commerce, Bureau of International Programs, which separates imports into two categories, "supporting" and "competitive." Supporting imports are defined as those raw materials and semi

manufactured products which furnish more than 75 percent, or less than 5 percent, of the total U.S. supply, and those which do not meet these percentage criteria but which have been judged essential to U.S. industry. Supporting imports account for about three-fifths of the foreign port value of imports. Competitive imports are all finished manufactures and all other products which do not satisfy the criteria established for supporting imports and thus are considered competitive with domestically produced goods.

The competitive classification of all finished manufactures includes some products that may not be competitive; for example, some of the finer linens, the unique types of sports cars, and goods made abroad under exclusive foreign patents fall within this group. On the other hand, some raw materials and semimanufactured commodities that compete with American products are included in the supporting imports category because they minimize American producers' material costs and thus promote domestic economic efficiency and growth. Examples are petroleum, iron ore, and softwood lumber. The lack of uniformly accepted, clear-cut criteria for characterizing imports should, therefore, be kept in mind in interpreting these estimates.

Employment Attributable to Imports


In 1960, an estimated 941,000 workers were supported by activities connected with all U.S. imports, which were valued at $15 billion. table 1.) By far the largest group some 619,000 worked in establishments that were engaged in processing imported raw materials and semimanufactures. This figure is limited to direct employment in the first-stage processing of such imports. The remainder were employed in transporting, handling, and distributing imports from foreign ports through U.S. ports to domestic factories that process imported raw materials and to wholesalers that import and distribute finished manufactures; furnishing fuel and supplies to the trade and transportation sectors; and replacing plant and equipment used up in all stages of handling imports.

1 Domestic Employment Attributable to U.S. Exports, 1960 (January 1962) for summary, see Monthly Labor Review, March 1962, pp. 277–278.

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