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increase in steel is needed to catch up with these industries, three of which it already exceeds, they have considerably overshot their mark.
Let us see what the addition of the WSB recommendations in steel would do to this comparison.
Mr. STEPHENS. As shown on chart 4B, the addition of the full Wage Stabilization Board recommendation would put steel wage increases, at the beginning of next year, greatly ahead of the increases in any other industry. Again during this period the increase in steel wages is much greater than the highest of the other industries and would require a new round of wage increases to enable these industries to catch up with steel. As I stated earlier, the Board itself selected January 1950 as the appropriate base date for wage comparisons under stabilization.
Senator FULBRIGHT. What would be the relationship there if that same chart was based upon straight-time and hourly wages?
Mr. STEPHENS. I have that later, sir.
Mr. STEPHENS. Here in chart 5 are reflected figures presented by Chairman Feinsinger as to relative increases in selected companies starting with increases in January 1950, in these industries.
Now again, what do the figures compiled by the Bureau of Labor Statistics on average hourly earnings show for these industries!
Mr. STEPHENS. In chart 6A is the comparison of wage increases beginning with the wage-stabilization base period—a very appropriate period for comparison. Again it can be seen that the wage increases in steel are very substantial in relation to the other industries.
Mr. STEPHENS. We show, in chart 6B, next the ultimate increase in steel wages as recommended for the beginning of 1953 as it would be reflected in the Bureau of Labor Statistics average hourly earnings. So, on the basis of the full period of wage stabilization, the Wage Stabilization Board recommends an increase in steel wages of more than 17 cents an hour greater than the largest increase for any industry they selected as a basis of comparison.
Gentlemen, no matter how these Government statistics are viewed, the only realistic conclusion must be that the Wage Stabilization Board steel recommendations would result in heavy pressure for another round of catch-up increases in the various industries which they have talked about as having had more pay increases than steel.
Senator FULBRIGHT. Does Mr. Feinsinger call chart 5 straight time?
Mr. STEPHENS. Mr. Feinsinger, when he talked about the meat-packing industry, he took one company only, Swift & Co.
In farm equipment, he took International Harvester. In electrical, he took General Electric; and in auto, General Motors. Senator FULBRIGHT. Those are not industries? Mr. STEPHENS. No; those are single companies. Senator Moody. May I ask one question Senator FULBRIGHT. Yes. Senator Moody. Mr. Stephens, let me say it is a point of dispute whether or not it is a catch-up or not. Do you think this could be accepted on the basis of the General Motors formula? If a formula accepted by another industry were then placed into effect by the steel industry, I should think that would be regarded as a catch-up and could not be used thereafter by others to break through further?
Mr. STEPHENS. If I understand you, Senator Moody, I assume you are asking me whether I think the present dispute in the steel industry could be settled by the use of the escalation and annual improvement factors which I take it you mean to be the General Motors formula.
Senator MOODY. That and other features of the General Motors contract. Whether it would be wise to settle on that basis.
Mr. STEPHENS. I am not sure I understand your question, but by responding to it maybe you can be the judge as to whether Í do. I personally am opposed to "built-in” inflation, which is my term for escalation in these labor contracts.
Secondly, I believe, and I think I can demonstrate it later, that the annual improvement factor works many injustices. There has been said to me-and here I am departing from my description of which I have direct knowledge, but it has been proposed to me that automatic increase under the General Motors annual improvement factor is just another 4 cents now which is demanded by other unions; it is automatic and there is no measurable way to determine whether you are getting increased productivity as a result of that.
I think there may be some merit if there is a small company which seeks, as do even the big companies, better employee relations; if they could through some automatic increased factor generate such enthusiasm and good will and so forth and so on, there might be something to it, but aside from that I think that we are in an unfortunate situation where we have what is known as pattern bargaining. I do not think it should be. I think each company should settle with the unions on the basis of the realities in its own particular company, but we got it anyway.
There may be people who are operating in the area where General Motors operates who cannot afford to do what General Motors did and you are, by that condition, either forcing them to do what circumstances would not seem to dictate would be wise, or you are putting them in a position where their workers are operating at lower wage rates than other people in the community, which militates against them from the employment angle, and so forth.
Senator Moody. Do you feel that formula would be a more favorable pattern than the formula that has been proposed by the Wage Board? If you must have pattern bargaining, as you put it?
Mr. STEPHENS. No; I am opposed to the formula. I do my best to understand things and I have respect for people who think about them.
Slichter, for instance, has published statements in which he declares that rising costs are but a reflection of money in circulation in relation to available goods.
Senator Moody. The reason I asked the question was because that was a formula reached by free collective bargaining between a very large industry and a union and it is one which seems to me to lend itself to definition as something that is already in effect and therefore would not be a break-through.
Mr. STEPHENS. Well, the union did not want it. It so declared. . The union did not want the General Motors formula.
Senator MOODY. You mean the steel industry?
Mr. STEPHENS. And the industry did not want it. It was brought into play 2 or 3 years ago and it has caught on to the extent only where it has covered about 20 percent of the industrial workers and part of that has been because I do not know whether railroad workers are included among industrial workers but part of that 20 percent is because that was the settlement suggested by Steelman in the railroad situation.
Senator FULBRIGHT. I am not clear what the basis of Mr. Feinsinger's chart is. The "automobiles" is 27.4 over here and it seems to be higher than General Motors on chart 5. This is straight time on chart 5 and parts 6-A and B are average time. What would be the factors that went into that chart?
Mr. STEPHENS. Since January 1950, I believe I am correct in saying, chart 5 reflects the increase in wage rates only in General Motors.
Using the Bureau of Labor Statistics figures, there is a difference between wage rates as such-basic wages—and straight-time earnings. The difference is accounted for by the addition-as does the Bureauto the basic wage rates between incentive earnings and shift premiums.
Senator CAPEHART. And overtime on Sunday?
Mr. STEPHENS. No, sir; that comes in on the average hourly earnings.
Average hourly earnings include the effect of overtime payments. Therefore, I have had prepared the same series of period comparisons using straight-time average earnings as calculated from the average hourly earnings, using the Bureau of Labor Statistics formula for eliminating overtime. As previously noted, straight-time hourly earnings consist of earnings at basic hourly rates, incentive earnings,