Power of Industrywide Unions

October 24, 1949

Let’s see just how we got into this. The President’s steel fact-finding board handed down a proposed settlement not only unsound in itself but riddled with inconsistencies. Its central self-contradiction was to deny a straight hourly wage increase on the ground that this “might well cause price dislocations”—and then insist on a pension-insurance plan costing 8 or 10 cents an hour which would have the same economic effects as such a wage increase.

Soon or late the present industrywide steel and coal strikes will be settled. But any terms now acceptable to the unions are almost certain to increase production costs and to put further strains on the economy. They will either result in unemployment or in more inflation to make the higher costs payable.

The trouble is not merely that the President’s board handed down a bad report, but that we cannot have government wage-fixing in this or any other disguise and still keep a free economic system.

Why was such a board appointed? In the fear that the industrywide steel union would otherwise bring the steel industry of the nation to a halt. And now that the steel industry and the soft-coal industry have both been brought to a halt by their respective industrywide unions, our whole economy is in danger of paralysis.

Let’s go back a little farther. How did we get into the position where there are industrywide unions? How did we get to the point where individual unions have become so powerful that they can paralyze the entire economic life of the country unless their terms are met?

We got there precisely because the government helped to put us there. We got there precisely because the Federal government itself, through the Norris-LaGuardia and Wagner Acts, and continuing with the Taft-Hartley Act, deliberately turned itself into a union organizing agency, built up industrywide unions, and encouraged strikes by taking practically all the risks out of strikes.

One reason why the employers must now deal with the Murrays and Reuthers and Petrillos and Lewises, no matter how unreasonable or disrupting the demands of the latter may be is that they are forced to deal with them under the law. We deliberately grant a handful of union leaders the power to paralyze the nation’s economic life, and then become surprised and indignant when they use the power.

As long as this legal grotesquery remains, we will have threats of economic paralysis until union leadership at last makes it impossible for a free system to operate at all.

The straightforward solution would be the complete repeal of the Taft-Hartley Act (including, of course, the Wagner Act which it amends) and the repeal or drastic revision of the Norris-LaGuardia Act.

But no amount of economic disruption now seems sufficient to convince Congress that its predecessors made serious mistakes in 1932 and 1935. From the standpoint of creating a workable economic system or of bringing about industrial peace, the Norris-LaGuardia and Wagner Acts were not great forward steps but great backward steps. Yet even the timid Taft-Hartley revisions in 1947 have been denounced by Mr. Truman.

In this atmosphere any real solution seems impossible. But a minimum reform, if a free economic system is to be allowed to function, would be an amendment removing the present legal compulsion on employers to recognize and “bargain” with industrywide unions. Such an amendment was in the original 1947 House bill, which was passed by an overwhelming majority. It failed in the Senate by a single vote, and only because of the fear of a Presidential veto. If Mr. Truman were to recommend such an amendment now, he could get it immediately. Until he does, the country will remain in the power of industrywide unions, of these Frankenstein monsters given a special license to paralyze the nation’s economic life if they don’t get exactly what their leaders want.