Heath: ‘Little Steel’ formula may be scrapped by FDR
By S. Burton Heath
Mr. Heath visited Pittsburgh last Monday when Governor Dewey was here. This column is the result of his visit. Peter Edson, who regularly writes the Washington Column, is on vacation.
Pittsburgh, Pennsylvania –
The subject did not come up publicly white Republican presidential candidate Dewey was here. But it is a pretty safe bet that one topic that business visitors brought up, in their private conference with Mr. Dewey, was the steelworkers’ wage negotiations.
There are many here who feel very certain, off the record, that the demand of Phil Murray’s union for a 17-cents-an-hour raise will go to President Roosevelt about mid-October and will be decided between then and Election Day. In that case they expect that the steel workers will get a raise of from five to ten cents an hour – which would bust the stabilization program wide open.
The background is this, in brief:
Most of the contracts were “open end.” That is to say, they were perpetual until a specified notice of intention to terminate them had been given. Such notice was given last year and the unions now are working in effect without a contract.
May find subterfuge
President Roosevelt assured Mr. Murray that if the men kept at work under the terms of the old contract, any increases granted within the limitations of the stabilization formula would be made retroactive. That, in the words of one observer, was “doubletalk.” There can be no raises within the limitations of the stabilization formula. Any raise, however small, breaks through the formula.
But the union people do not think that the President promised such a thing to no powerful an organization of his strongest supporters without intending to make good in some fashion. One way would be to find a subterfuge by which the men could be paid for something they do now without pay – such as going into the mill, punching the clock and walking to their posts of duty.
The importance of the steel wage negotiations is evidenced by the time and labor that have been devoted to it already. There have been almost five months of public hearings, completed in mid-July, before a fact-finding panel of the WLB, during which around a million words of testimony were recorded in some 4,000 pages of stenographic transcript.
The case is important because it was in the steel industry that the stabilization formula for wages – a cost of living adjustment of 15 percent above the scale for Jan. 1, 1941 – was evolved.
Formula broken
That formula has been broken in a number of instances on the theory that an adjustment was being made in favor of the previously underprivileged. No such excuse can be made in steel, because the formula assumes either that steelworkers were not discriminated against or that the cost-of-living adjustment relieved any discrimination.
If the President concedes anything here, it will mean that he, personally, will have discarded the Little Steel Formula. In the opinion of many, that would mark the end of any firm, realistic struggle against inflation.
Nevertheless, few believe that he will be able to resist. After all, Mr. Murray is not only head of the steelworkers; he is head of the whole CIO. The CIO sponsored and finances the Political Action Committee, which is so influential in Democratic circles that top party and administration leaders from Vice President Wallace down sneaked up fire escapes to get Sidney Hillman’s okay on what they planned or wanted to do at the Democratic National Convention.
Dewey filled in
It is considered doubtful whether the case can be kept from the President until after election – whether, if the race is close, he will dare go to the polls with the Murray union’s demands undecided. Nor do realists think that, two weeks or a month before Election Day, he will send the union away empty-handed.
Pennsylvania being a doubtful state with the second highest electoral vote in the country, the implications of this situation are important to the Republicans. It is pretty much a certainty that Governor Dewey has been given a fill in, so that he can be prepared, when the time comes, to make all possible capital out of whatever course the President may take.