Mrs. Celinsky & the Saloon

In Manhattan last week, Jones & Laughlin Steel Corp.'s Chairman Ben Moreell stood up before a special Wage Stabilization Board panel which is trying to decide if 650,000 of the nation's steelworkers are entitled to another wage boost. Said Admiral Moreell (ret.): the union's demand for an 18 1/2-c- raise plus fringe benefits which are estimated to bring the total raise up to 50-c- an hour would set off such a wave of rising prices that it would probably cost Jones & Laughlin $95 million a year, $10 million more than all of its 1951 earnings. Then C.I.O. President Philip Murray's sharp Scottish tongue cut in.

In mock alarm at the inflationary consequences of wage boosts, Murray pointed out that Jones & Laughlin Vice President Charles L. Austin, who was made President two weeks ago, recently was raised from $55,000 to $70,000. How did Moreell justify this raise under the circumstances? "Phil," cried Moreell, who is personally fond of Murray, "that is one of the best things I have done!" Snapped Murray: "If it's good for Mr. Austin, why isn't it good for Joe Doakes? . . . Now Admiral, do you think that Mrs. Celinsky, over on the South Side, gets any more groceries in her market basket as a result of Mr. Austin's wage increases?" Moreell stoutly insisted that all of his employees, including the husband of the hypothetical Mrs. Celinsky, had benefited from Austin's executive ability. "Mrs. Celinsky," he added, "will continue to profit as a result."

Does Anybody Win? Mrs. Celinsky's market basket was indeed the center of the long verbal war before the WSB's fact-finding panel. Was the basket, as Murray claimed, too scant for the growing output of her steelworker husband? Or would it, as Moreell and the industry argued, actually shrink--in spite of higher wages--because of higher prices that would result from them?

Over the weeks, Murray had argued the union's case. Not wages but "profiteering, speculation, hoarding" had driven up prices, he insisted. Wages rose only 7.6% nine months after Korea, said Murray, while the wholesale prices of semi-finished goods rose 26.3%. Since 1945, Big Steel's profits after taxes had risen 209%, while wages rose 58%. Moreover, the industry, which has already raised its prices 80% in the same period, did not need another price boost to meet the wage demands. It could pay them from profits.

The union also wanted the union shop, eight paid holidays a year, paid vacations ranging up to four weeks after 15 years, and a guaranteed annual wage, i.e., 30 hours' work a week for 52 weeks for workers with three or more years of service. The 650,000 steelworkers were not demanding "a larger share of the economic pie," but only what they considered a fair share. Where 47-c- of each $1 of steel sales went for wages five years ago, labor's share is now but 39-c-. Said Murray: "It has been whittled down crumb by crumb like the food at a third-rate boarding house."

The Economic Jag. President Ben Fairless of U.S. Steel, whose policies usually set the pace for the whole industry, had an earthy simile of his own to match Murray's boarding house. The U.S., said Fairless, has "been acting like the man in the corner saloon. We've been telling ourselves that we'll have just one more little shot of inflation and that tomorrow we'll swear off. . . All of us know in our hearts . . . that somehow, some time, we've got to stop this economic jag."

Fairless dismissed the annual wage guarantee as a "demand that we shall pay large sums for no work at all." He challenged Murray's charts of lagging wages. "The pay, the benefits and the living standards of our employees," said Fairless, "have gone up . . . vastly in excess of any increase in productivity . . . far beyond any increase in the cost of living . . . Our steelworkers' wages are far above the average pay of American industrial workers generally." (The industry's figures: steel wages have risen an average of 60% since 1945--to $75 a week--while the cost of living was rising 45%.)

All of the union's demands, if granted, would exceed $1,000 per year per employee, and would cut deepest, not into profits but into the taxes now paid to the U.S. Government. If a policy of pay raises without price rises spreads to all U.S. industry, Fairless estimated that the federal Treasury would lose $11 billion in corporate taxes that could only be made up by raising other kinds of taxes. Warning that nobody gets something for nothing, Fairless asked: "Should we rob Peter to pay Phil?"

Against the argument that the industry can "absorb" the wage boosts without higher prices, Fairless cited U.S. Steel's 15% drop in dividends in 1951, the bite of taxes which left 17 1/2% less profits to plow into the huge expansion needed for U.S. security. "The real issue at stake," said Fairless, "is whether the economic stabilization program . . . is to be maintained . . . We are all in this boat together, and we cannot afford to scuttle any part of it."

It will be another two weeks or more before the panel makes its findings. Actually, the question is not whether there will be a wage raise, but how much. Under the WSB's own formula, the union is entitled to perhaps 9-c- an hour as a cost-of-living rise alone, plus another 5-c- that could be allowed for increased productivity. Last week Yale's Law Professor Harry Shulman, chairman of the steel wage panel, gave a likely preview of things to come. He had also been chairman of a similar panel in the dispute between the C.I.O. and Curtiss-Wright Corp., in which the issues were roughly similar to those of the steel case. The panel's Curtiss-Wright decision recommended an average 14.4-c- pay boost for the workers, 2.4-c- more than the C.I.O. had offered to settle for during a strike. But if steelmen get a similar finding, they will insist that the OPS grant a corresponding boost in prices. So it looked as if Mrs. Celinsky and the whole U.S., willy-nilly, were bound to have just one more drink in the corner saloon.

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