LABOR DISPUTE BETWEEN RAILROAD CARRIERS AND FOUR OPERATING RAILROAD BROTHERHOODS

TUESDAY, FEBRUARY 27, 1951

UNITED STATES SENATE,

COMMITTEE ON LABOR AND PUBLIC WELFARE,

Washington, D. C.

The committee met at 10 a. m., pursuant to recess, in the old Supreme Court room, the Capitol, Senator James E. Murray, chairman, presiding.

Present: Senators Murray (chairman) and Lehman.

Also present: William H. Coburn, chief clerk of the committee; Tom Shroyer, of the professional staff of the committee; Ray R. Murdock, counsel to the Subcommittee on Labor-Management Relations; and Charles Murray, administrative assistant to Senator Murray.

The CHAIRMAN. The hearing will come to order.

Mr. Robertson is still on the witness stand. You may proceed with your statement, Mr. Robertson.

TESTIMONY OF D. B. ROBERTSON, PRESIDENT, BROTHERHOOD OF LOCOMOTIVE FIREMEN AND ENGINEMEN, CLEVELAND, OHIOResumed

Mr. ROBERTSON. I was beginning with the last paragraph on page 16, Mr. Chairman, before we concluded yesterday.

As stated before, the 29-cents-per-hour wage increase for yardmen contemplated by the memorandum as an incident of the establishment of the 40-hour week represents no increase of wages for these employees. Aside from the future quarterly adjustment of wages on the basis of the cost-of-living index called for by the memorandum, it is correct to say that the memorandum provides for the yardmen no increase in their take-home pay subsequent to the establishment of the 40-hour week. During the interim preceding the establishment of the 40-hour week they will, however, have the advantage of a 25-cent-per-hour increase but this will not be reflected in an increase in the amount of take-home pay if the workweek is reduced in the interim.

For the enginemen and trainmen employed in road service, the increase called for by the memorandum agreement is 10 cents per hour. This was rejected by the general chairmen. Their initial demand was for an increase of 35 cents per hour. There is no sound reason why railway labor should be discriminated against by being denied wage increases comparable to those accorded to industrial workers generally.

This occasion is, I assume, hardly the time or place to engage in a technical or detailed comparison of wage increases received in the various industries, and of the need and justification for improvement in real wages and living standards. I shall, therefore, belabor you with as few statistics as possible.

Probably the first factor to be weighed in determining the need for wage increases is the relative purchasing power of the wages being received by employees. The purchasing power of wages is commonly referred to as "real wages." It is, as you know, reflected by the Consumers' Price Index.

If we direct our attention to this factor, it will be found that railway employees of the firemen's class have suffered a net loss in their real wages since June 1946, the time when wage stabilization was first abandoned. Between June 1946 and June 1950-the start of the Korean War the Consumers' Price Index rose 27.7 percent. In June 1946 the average straight-time hourly earnings of the firemen was approximately $1.25 per hour. This means that if the firemen's real wage level were merely to be maintained at what it was in June 1946, their average hourly earnings in June 1950 would need to be $1.60 per hour. As a matter of fact, the average hourly earnings of firemen in June 1950 fell short of that rate by 5 cents per hour.

A second primary factor to be taken into account when considering wage levels is the right of employees to a continual improvement of their real wages, due to the advancing productivity and efficiency of workers. As workers produce more per hour and more per month, they are entitled to consume more. Even in periods of emergency, continuous improvement in wages is necessary to provide incentives for further increases in productivity. This fact was recognized in the annual economic review of the President's Council of Economic Advisers transmitted to the Congress in January of this year.

The collective agreements signed during 1950 covering more than one-half million workers employed by the automobile manufacturing companies, in addition to granting hourly wage increases of 5 to 12 cents per hour, contained assurances that these employees would receive future progressive wage increases in recognition of the right of employees to a continuing improvement in their standard of living. In each of these contracts, annual automatic increases of 3 to 4 cents per hour during the ensuing 4 years were granted to the employees. This practice of adding an annual-improvement factor to the base rate of pay is rapidly becoming standard procedure in the major industries. During 1950 more than 30 of the major companies representing substantially all of the major branches of industry and transportation incorporated the annual-improvement factor into their collective agreements.

The principle that those who participate in producing more with the same amount of human effort are entitled to share in the benefits of this increased production, is a principle that is unquestionably applicable to the railway industry. Productivity in the railway industry has risen continuously for many years. In 1949 the productivity of enginemen in terms of revenue traffic units per man-hour was 78.2 percent greater than what it was in 1921.

I would like to add there, Mr. Chairman, that those comparisons were made for the month of September in 2 years referred to, and I should like also here to introduce an exhibit entitled "Revenue Traffic

Units per Man-Hour, Brotherhood of Locomotive Firemen and Enginemen, Specified Dates 1921 to September 1950." It shows the years 1921 to 1950, with the revenue in traffic units, per man-hour on the left and the index on the right side of the exhibit, the information having been compiled from Interstate Commerce Commission statistics of railways in the United States, 1921, statements M-300 and M-220.

I think, in view of our apparent oversight to have this reproduced, Mr. Chairman, I might read the figures into the record. There are not so many of them.

The CHAIRMAN. You may proceed and do that.

Mr. MURDOCK. Mr. Robertson, I take it this will be identified as B. L. F. and E. exhibit No. 4?

Mr. ROBERTSON. Yes, sir.

The CHAIRMAN. Are you going to read the entire document into the record?

Mr. ROBERTSON. I will meet your pleasure in that respect, Senator. The CHAIRMAN. I think it might as well be copied entirely into the record.

Mr. ROBERTSON. All right. I will just hand it over.

(The document was marked "B. L. F. and E. Exhibit No. 4," and follows:)

B. L. F. AND E. EXHIBIT No. 4

Revenue traffic units per man-hour, Brotherhood of Locomotive Firemen and Enginemen, specified dates, 1921 to September 1950

Source: Interstate Commerce Commission, Statistics of Railways in the United States, 1921, and statements M-300 and M-220.

Mr. ROBERTSON. I just called attention to the fact in my statement that in September 1949 from 1921 there had been an increase of 78.2 percent in revenue traffic units per man-hour production.

By September 1950 this ratio of productivity was 13.4 percent above what it was 1 year before.

The general pattern of wage increases for American workers during peacetime years, based upon this factor of continual increased productivity, has averaged about 3 percent per year. If railway labor is not to be denied its fair participation in the increasingly productive economy of which it is a vital, contributing force, then railway labor was entitled on this basis during the period June 1946 to June 1950 to a 12-percent increase in real wages.

If, therefore, the enginemen were accorded their rightful participation with other workers in the benefits of our growing economy, the wage level of $1.60 per hour which they should have been receiving in

June 1950, in order that their purchasing power might be maintained at a steady level, must be increased by this 12-percent wage-improvement factor. This, if done, would require an average, straight-time hourly earning of $1.78 plus, or slightly more than 24 cents per hour above what the enginemen were in fact receiving in June 1950.

The figures which I have been giving you take no account of what has been happening since June 1950. As you know, prices and the average wage levels in the major industries have changed materially in this comparatively short time. The employees of the major industrial companies have received wage adjustments in this period averaging approximately 10 percent.

At this point, Mr. Chairman, I would like to introduce another exhibit showing in detail for industries during the last 6 months of 1950 certain increases. The exhibit will also show the companies and the number of employees involved in the various negotiations which resulted in these increases, which ranged all the way from 5 to approximately 20 cents. That was about 1212 to 16 percent.

The CHAIRMAN. This exhibit, then, will be received and it will be. printed in the record in its entirety at this point.

Mr. ROBERTSON. Thank you.

Mr. MURDOCK. That will be exhibit B. L. F. and E. No. 5.

(The document was marked "B. L. F. and E. Exhibit 5" and follows :)

B. L. F. AND E. EXHIBIT No. 5

Typical wage increases since the Korean crisis

Source: U. S. Department of Labor, Bureau of Labor Statistics; Bureau of National Affairs; press clippings.

Mr. ROBERTSON. It is entitled "Typical Wage Increases Since the Korean Crisis."

If the enginemen are to keep pace with this latest trend of wages, an increase of 17.9 cents per hour is due them.

Thus, based upon the accumulated real-wage lag of 24 cents per hour which railway enginemen need, to correct their wage levels to June 1950 and the post-Korean War wage lag of 17.9 cents per hour, increases to enginemen totaling in excess of 40 cents per hour are justified today.

Yet this does not give you the whole picture. Recent skyrocketing prices have made additional reductions in the real wages of employees. From June to December of 1950 the Consumers' Price Index increased 8.2 percent, and new increases in the index above the December levels is indicated by a wholesale price index rise of 3.6 percent from mid-December to January 23, 1951.

I think it should be apparent that a wage increase of 35 cents per hour for the operating employees of the railway industry is an altogether reasonable and justifiable demand, and to ask them to accept less is to challenge their right to share, on an equal basis with the vast majority of the employees in other industries, the fruits of their labor and of our economic system.

Our negotiations in the instant case do not differ materially from others in which we have engaged during a period of many years. The employees have not sought all that economic data indicate is due them, and the railroads have not offered to us the maximum of our demands. Through the National Mediation Board we submitted a proposition to the carriers under date of February 6, 1951. It may, as respects rates of pay, be divided into five parts.