Steel Strike May Jeopardise U.S. Economy

Press, Volume XCIV, Issue 28012, 5 July 1956, Page 11

Steel Strike May Jeopardise U.S. Economy

[Specially Written for the N.Z.P.A. by FRANK OLIVER] (Rec. 8 p.m.) WASHINGTON, July 3. The steel industry strike is on and all indications are that it may be a long one with repercussions throughout the country’s economy. The disastrous strike of 1952 lasted eight weeks; and starting a strike is always easier than stopping one.

On the whole, it is a strike no-one wants. The industry is enjoying unparalleled prosperity while steel workers are making higher wages than in any other industry—lGO dollars or £35 a week. On the surface, this seemed to be the year when the txvo sides would have little difficulty in v’orking out an agreement fair to both sides and consistent with the economic welfare of the country. A long shut-down could jeopardise the national prosperity, which is a matter of importance to both sides in the dispute. The strike arises solelv over one problem—how long shall the work contract be? The steel industry has been u*ed to yearlv contracts, but the companies are tired o* what they t»rm the guaranteed annual argument. They therefore demanded a five-year labour contract giving a long period of stability in which they could make their expansion plans without fear of strikes ot demands for higher wages. This was not new, for a pattern of

long-term agreements has lately been established in various sections of the industry, the terms of such contracts ranging from three to five years The steel union is not averse to a longer contract and seems ready to accept a three-year one, but the steel companies want a longer period and there can be no doubt that the union has been irritated by the “take it or leave it” attitude of the companies. So. on what seems to the general public to be a small issue—a three or five-year contract —the strike has been called and it could run for many weeks. The prospect of a short strike bothers neither side, for most union members are entitled to two weeks’

paid holiday and beine out of the ' mills for the heat of July is not un- ; welcome. The comnanies have been turning out steel at a record rate and face a < considerable din in demand during the year's third quarter. A short strike 1 would restore demands to peak levels and make it easier to get a substan- 1 tial increase in steel prices. But what is in prospect now is i a lengthy strike which neither side of the argument wants. As has be°n said before, the vnderninnings of the booming national economy are made of steel. of ’obs in all sections o< American industry depend upon a dependable supplv of steel and steel prices and wages set patterns throughout ind”>?trv and affect the living costs of all Americans. Steel production in the first half of

this year totalled more than 60,000,000 tons, and of this only 3 per cent, was exported. The strike means the country will lose more than 2,000,000 tons of steel a week. Experts believe the pinch will be very real if the strike lasts for three weeks, for much steel was lost last week while the fires were banked, and it will take at least a week to get them functioning fully after the strike ends. Much depends on the length of the strike, but its effects upon the economy must show up fairly soon. Both political parties are watching the squabble with keen interest, for a serious effect on prosneritv could play a big part in Republican hopes of election success. If the strike becomes a long one. the White House will be forced to decide whether to

obtain a strike injunction under the provisions of the Taft-Hartley Labour Act. which is detested by labour. Its use by the Government could be politically explosive. Though the strike is only in its third Hav. 40.000 men in steel-related industries are idle, in addition to the 650 non strikers. There was no sign of an early settlement. Negotiators for the union irdustrv appeared to be marking time un*iJ after the Julv 4 The Federal Mediation -ire arranged separate meetings with union and industry no£?o 4 ia’->rs for Thursday in an attempt to revive bargaining Economists sa’d the Sundav start nf th n strike and the mjd-w®nlr hoMwnn’-' dptt thr earlv imnart of 'he steel industry <h'i‘.d<.wn on United States business in general.