Big Battle of Little Steel

If 99.1-c--an-hour steel labor deserves a wage boost now, why shouldn't practically every other worker in the country get a raise too? And then where will price control be short of Kingdom come? These are practically the only questions overlooked by a fact-finding panel of the War Labor Board, which spent four and a half months taking 2,500 pages of testimony and preparing a 67-page steel-wage report. Last week the panel reported that it could find no good reason why labor in "Little Steel" (Bethlehem, Republic, Youngstown, Inland) should not be given another $1 a day.

Everyone Watched. With this negative conclusion the fact finders passed their problem back to their superiors. And even politics-as-usual Washington sobered up for a minute, realizing that it was now or never for price control. With price ceilings like gasoline and canned goods beginning to pop, with the farm bloc rampaging to boost crop loans to 100% of parity, the only thing needed to bury price control forever was a tidal wave of wage increases touched off by a Little Steel raise.

There was talk that the President himself might come to Price Tsar Leon Henderson's rescue, forget the war long enough to make clear that he really meant it ten weeks ago when he said that farmers and labor would have to stop asking for more.

Straw in that wind last week was a radio speech by Harold Smith, director of the budget and New Deal insider, who said that too many people were still waiting for somebody else to make the first sacrifice in the interests of stopping inflation.

About the only people in the whole country who did not have much immediate stake in Little Steel wages were the Little Steel companies. Under the proposed 94% excess-profits tax-as the panel pointed out-all but $2,850,000 of the $47,500,000 wage boost would come out of the U.S. Treasury. What Little Steel was worried about was the panel's recommendation that maintenance of membership was no more than a fair concession to labor for giving up the right to strike for the duration.

What else labor will get is up to the full membership of the War Labor Board. So far WLB has a record of rejecting or amending 15 out of 45 recommendations from its own fact-finding panels.

Everyone was On the Spot. At the head of WLB sits William Hammatt Davis, to whom Franklin Roosevelt gave the job of appeasing labor in order to head off strikes. He knows that labor must be given something to keep it satisfied.

But he also knows that if he gives a steel raise he is sunk so far as other raises are concerned. Already before him, awaiting the steel decision, are $1-a-day demands from the auto, aluminum, textile & rubber 73 workers. So Mr. Davis will spend the next ten days or so figuring out whether labor can be appeased in this case with something else (such as union maintenance) instead of a pay boost.

At the head of price control sits harried Henderson, also a practical man-though a tough in-fighter too. Even Leon weaseled on wage increases to the extent of indicating that he would not object to a 5% raise -but there were rumors that he might testify before WLB in the hope of stiffening its spine.

At the head of the steelworkers (and the C.I.O.) sits Philip Murray, who is usually a sensible man. Murray knows that skyrocketing prices rob labor of real wages, that in World War I inflation ate away all but 18% of the purchasing power of the 160% wage increase won by wily old Samuel Gompers. But he also knows that John L. Lewis is crouching vengefully behind him, ready to spring. Isolationist Lewis made a symbol of $1 a day when he won it for his miners last year, and if pro-war Phil Murray fails to get $1 a day for his steelmen, it will be a real handicap in his fight against the Lewis challenge to his leadership.

So last week, with one eye on Lewis and the other eye shut, Phil Murray lashed out against the "crazy quilt of OPA," denounced Leon Henderson's 5% raise weasel and the whole attempt to keep wages in hand as "unfair . . . intolerant ... a victory for Hitler." Thus he gave the nation the spectacle of its No. 1 labor leader taking pot shots at a Government program primarily designed to protect labor's own standard of living.

Davis, Henderson and Murray were all sensible practical men. But politics has a way of making practical men do foolish things.

Murray's statement was not much more indifferent to the future of price control than the report which precipitated the commotion. That document had a strangely "only yesterday" look, as if its authors had never heard of the fight against inflation, or did not believe what they had heard.

But in their indifference they posed the issue all the more sharply by making clear that this is not a case of wages be low "standards of health and decency" -as indicated by the President in his price-control speech as justifying a break through of April wage levels. They reported that wages in Little Steel averaged $1,926.72 per man in 1941 and that hourly earnings are greater than in other durable goods (99.1-c- vs. 91.3-c-), still greater than for all manufacturing (82-c-).

This is the first clear case of its kind that has come before the War Labor Board since price control became the theoretical law of the land.

Chief points made by the fact-finding panel to justify a wage increase: 1) The cost of living has gone up 13.3% since the last steel wage increase (which was just over 12%). This is true, but it overlooks two other points: going back to the war's beginning in September 1939, hourly steel wages have gone up slightly more than the cost of living and weekly earnings have risen more than twice as fast.

2) There is not much overtime in the steel industry yet, and consequently steel labor, despite higher hourly wages, is not earning as much money in its 40-hour week as labor in other plants is earning in a 47-hour week. This argument, of course, is somewhat like suggesting that steel labor should be paid for working overtime even if it does not have to put in overtime.

3) Steel wages are not as far above other industries as they used to be, and the steel workers' advantage will soon be whittled down still further by increases elsewhere. This was the high point of the fact-finders' disregard of price control.

4) The companies can afford to pay higher wages, and anyhow most of the raise would come out of lower taxes. The first half of this argument was a bit like saying a chauffeur is worth more money if he drives for a millionaire. The second half amounted to approving a Treasury subsidy for already well-paid labor.

The panel's "facts" stirred shrieks of protest from many sides. But the main objection was that its careful fact-findings were facts in a vacuum rather than facts set against the background of the most serious domestic problem now facing the U.S. If a union that is already paid well above subsistence gets higher wages be cause the farmer is getting higher prices or because industry is making more money (no longer true after taxes), or that other labor has been given a raise, it gives the inflation spiral another twist. Unless some one breaks that vicious circle soon, the battle of inflation will be lost, and labor will be among the biggest losers.

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