A Dictated Settlement

February 11, 1963

While the attention of Congress is being diverted by fantastic proposals to slash taxes in the face of an already huge prospective deficit, ominous developments have taken place in the field of labor.

The Atlantic and Gulf coast dock strike, which had kept 100,000 people out of work for more than a month, tied up nearly 700 ships, caused untold spoilage of fruit and other cargoes, and total damage estimated at $700 million to $1 billion, has been “settled.” It remains to be seen whether the settlement doesn’t cause even more damage in the long run than the strike.

This settlement was dictated by the Kennedy Administration. The terms were heavily weighted in favor of the union against the industry. On the wage and “welfare” side they granted the union a 39-cent-an-hour package over two years—far in excess of any “guidepost” even the President’s Council of Economic Advisers had dared to propose. (Dock workers’ pay has averaged around $3.65 an hour.) But the chief issue involved was the outrageous featherbedding of the ILA union, which the employers had sought to mitigate. The President’s three-man board simply swept this issue under the rug by recommending that it be put off for a two year “study.”

SOME PROTESTS

This highhanded action has at least drawn a vigorous protest. The Wall Street Journal writes: “The same government which blew its top at a steel company for announcing modest price increases less than a year ago, and threw its full force into rolling back those increases . . . apparently thinks the dock settlement is just fine. President Kennedy says he is ‘gratified.’ In a sense the government should be gratified, for the government dictated the settlement; there is no other word for it. . . . Senator Morse and his colleagues on the President’s three-man board took the bulk of the union’s demands and the government told the companies to knuckle under. . . . The upshot is a settlement that settles nothing and therefore may well prepare the way for more vicious strikes later.”

The National Association of Manufacturers calls the settlement imposed by the Wayne Morse board “a bare-knuckled display of government power unsanctioned by law.”

The New York Journal of Commerce calls the settlement a “crushing victory over management,” and adds: “Mr. Kennedy might just as well have raised the tariff, imposed a tax on exports, or simply raised taxes on firms engaged in foreign commerce to the tune of $18 million to $26 million a year. . . . It is the President himself who has finally given the answer to the question of whether he would crack down on excessive labor demands with the same ardor that he cracked down on steel price increases. It can be stated in three flat words: he will not.”

BUYING MORE STRIKES

Where will Mr. Kennedy go from here? When it was pointed out to him that if he dictated steel prices he might logically be asked to dictate all other prices, he disavowed such an aim and treated his crackdown as an isolated episode. But having dictated a thumping wage increase for a featherbedding union, how can he deny an equal award to other unions?

The Kennedy Administration has been toying for a long time with the idea of compulsory arbitration of labor disputes. This has been shown in the Council of Economic Advisers’ notion that it can set up wage-determining “guideposts,” in former Secretary Goldberg’s statements and interventions, and in present Federal interventions. But conservatives and liberals who rightly fear this outcome are confused and divided among themselves. Some ask for antistrike legislation. Others suggest putting the unions under the antitrust laws. But the real need is simply to restore freedom of bargaining. Bargaining cannot be free as long as the law permits mass picketing or any other form of physical intimidation, coercion, or violence. And it cannot be free as long as employers are legally compelled to bargain solely with specified unions, or as long as the compulsory union shop is explicitly sanctioned by Federal law.