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Wage - Price Guidelines and Free Collective Bargaining Louisiana State University LSU Digital Commons LSU Historical Dissertations and Theses Graduate School 1969 Wage - Price Guidelines and Free Collective Bargaining. John Hugh Abernathy Jr Louisiana State University and Agricultural & Mechanical College Follow this and additional works at: https://digitalcommons.lsu.edu/gradschool_disstheses Recommended Citation Abernathy, John Hugh Jr, "Wage - Price Guidelines and Free Collective Bargaining." (1969). LSU Historical Dissertations and Theses. 1528. https://digitalcommons.lsu.edu/gradschool_disstheses/1528 This Dissertation is brought to you for free and open access by the Graduate School at LSU Digital Commons. It has been accepted for inclusion in LSU Historical Dissertations and Theses by an authorized administrator of LSU Digital Commons. For more information, please contact [email protected]. This dissertation has been microfilmed exactly as received ABERNATHY Jr., John Hugh, 1933- WAGE-PRICE GUIDELINES AND FREE COLLECTIVE BARGAINING. Louisiana State University and Agricultural and Mechanical College, Ph.D., 1969 Economics, general University Microfilms, Inc., Ann Arbor, Michigan Wage-Price Guidelines and Free Collective Bargaining A Dissertation Submitted to the Graduate Faculty of the Louisiana State University and Agricultural and Mechanical College in partial fulfillment of the requirements for the degree of Doctor of Philosophy in The Department of Economics by John Hugh Abernathy X « ~ - B.S., University of Alabama, 1958 M.S., University of Alabama, January 1969 PLEASE NOTE: Not original copy. Blurred and faint type on several pages. Filmed as received. UNIVERSITY MICROFILMS. TABLE OF CONTENTS Page PREFACE .......... .................................. i LIST OF FIGURES AND T A B L E S ....................... iv ABSTRACT ...... ........................................ v Chapter I. INTRODUCTION ....................................... 1 Nature of the Study Limitation of the Problem Organization and Sources II. SOLVING LABOR RELATIONS PROBLEMS: THE DEVELOPMENT OF COLLECTIVE BARGAINING ............ 9 The Development of the Process of Collective Bargaining The Development of Collective Bargaining Policy Summary III. THE NATURE OF CONTEMPORARY COLLECTIVE BARGAINING . 47 Forms of Collective Bargaining Policy Goals of Collective Bargaining Conditions Precedent To and Postulates About Collective Bargaining Summary IV. THE NEW INFLATION AND THE POLICY G A P ................. 79 The Legislative Branch— Joint Economic Committee - The Executive Branch Summary and Conclusions V. THE PROPOSED SOLUTION: WAGE-PRICE GUIDELINES ........ 121 Formulation of the Guidelines Evolution of the Guideline Concept Summary and Conclusions VI. THE GUIDELINES AND COLLECTIVE BARGAINING 151 Identifying Critical Wage Negotiations Government's Role in Promoting Guidepost Adherence Specific Cases of Government Activities to Promote Guidepost Adherence Summary VII. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ............ 196 The Development of Collective Bargaining and the Guideposts The Impact of the Guideposts on Collective Bargaining Recommendations APPENDIX A: CHRONOLOGY OF FEDERAL WAGE-PRICE POLICY, 1945-1962 226 APPENDIX B: NATURE, CAUSES, AND PROPOSED REMEDIES FOR THE NEW INFLATION...................................... 238 APPENDIX C; PRODUCTIVITY MEASUREMENT CONCEPTS .............. 247 BIBLIOGRAPHY ................................................ 254 VITA ........................................................ 263 -4 PREFACE Decisions regarding terms and conditions of employment must be made in every employer-employee situation; these decisions can be made unilaterally by either management, labor or government or by some combination and compromise among these three groups. Collective bar­ gaining is the particular combination and compromise developed for private employee decisions in the United States; government makes the rules-of-the-game within which managements and unions hammer out the terms and conditions of the work agreement. Before collective bargaining could gain the protection and support of the general community, however, two conditions were necessary. First, collective bargaining had to possess a strategic constituency which believed that it was superior to the other methods for resolving industrial conflict. And second, it had to be regarded as more of a social asset than as a nuisance, i.e. it had to make a positive con­ tribution to the public welfare. Collective bargaining made a signifi­ cant contribution to the public welfare in the following ways: by contributing to more peaceful labor-management relations; by providing a measure of bargaining equality for workers in their attempt to secure economic benefits; by enhancing the freedom and "dignity of workers through protection against arbitrary procedures and exploitation on the part of management; and by expanding democracy into the economic order through giving workers a voice in the determination of those policies and decisions which affect their work lives. Collective bargaining has primarily been an instrument for adjusting and compromising the private interests of labor and manage­ ment. The guideposts, however, are essentially an expression of pub­ lic concern for the failure of some major agreements to produce results compatible with the broader public interest. Clearly, if collective bargaining must now consider the public interest aspect of wage decisions it will have to acquire a new dimension. The central question investigated in this dissertation is whether this new dimen­ sion constitutes a broad scale limitation of collective bargaining. Behind this question is the recognition that any broad scale limita­ tion of collective bargaining will produce several changes. First, the decline of the social institutions for which collective bargain­ ing is the core function— the trade unions. Second, the decline of collective bargaining and all of its positive contributions to the public welfare. And finally, an increase in the number of industrial disputes that would be resolved either by default in favor of manage­ ment or by government edict. Collective bargaining cannot be preserved as the principal technique for resolving labor-management conflicts unless all new public demands on collective bargaining are fully explored and understood. This dissertation explores the nature of the demands imposed on collective bargaining by the wage-price guideposts. The author wishes to express his appreciation to the following: to Professors William J. Stober, Robert F. Smith and Lee J. Melton for their assistance, advice and guidance in the preparation of the manu­ script; to the Graduate School Foundation of Louisiana State University for travel funds for the collection of data; to Professor Kenneth Boulding for valuable suggestions on legitimacy and social justice; to my typist, Mrs. Harry Minkler, for her valuable assistance; to my family for their financial assistance and moral support, and to my wife whose help amdi encouragement made it worthwhile. The author is solely responsible for whatever deficiencies the manuscript may have. iv FIGURE 3-1 Forums of Bargaining Organization....................... 53 TABLES Table 4-1 Changes in Revenue, Costs, and Profits in the Steel Industry 1953 and 1958 .................... '..................... 85 5-1 Annual Rates of Output Per Man Hour 1909-1960 129 6-1 Actions in Major Collective Bargaining Agreements'^ 1962- 1968 by Number of Agreements and Number of Workers Covered 155 6-2 Major Collective Bargaining Settlements 1962-1968 .... 156 6-3 Significant Contract Expirations and Reopenings by Industry 1962-1968 .............................................. 160 ABSTRACT Decisions regarding terms and conditions of employment must be made in every employer-employee relationship; and can be made in only four ways: unilaterally by either management, labor, or government or by some combined decision making involving all three groups. Collective bargain­ ing is the particular combination used in the United States. Government functions as the rule maker and enforcer, and the parties negotiate within this framework of rules. Thus, collective bargaining is primarily an instrument for adjusting and compromising the private interests of labor and management. The wage-guideposts express public concern and insistence that the results of major collective bargaining agreements be compatible with the public interest. Clearly, if collective bargaining must now con­ sider the public interest aspect of wage decisions directly it will have to acquire a new dimension. The central purpose of this dissertation is to determine the changes in collective bargaining produced by the guide- post dimension and whether these changes constitute a broad scale limi­ tation of collective bargaining. It is recognized that any broad scale limitation of collective bargaining will severely limit trade unions thereby limiting collective bargaining and the freedom, dignity, and participation of workers, and that it will increase the number of employer-employee disputes that would be resolved either by management or by government edict. Guidepost statements must be distinguished from guidepost policy in the attempt to determine the effect of the guideposts on collective bargaining. The statements represent nothing more than information as to the long-run behavior of real wages and economy wide productivity in a highly competitive economy and probably has only a minor educational impact on the parties to collective bargaining. Guidepost
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