Business: More!

Laying in a heavy stock of his favorite pipe tobacco for what looked likely to be a lengthy siege, white-maned United Steelworkers’ President David John McDonald last week set down his price for peace in steel: “More!” Among other things, McDonald’s 171-man wage and policy committee asked for “substantial wage increases, modernized cost-of-living adjustments, a shorter work week, additional holidays, greater vacation benefits and improved supplemental unemployment benefits, insurance benefits, pensions.”

For purposes of later horse trading, the committee as usual gave no dollar figures. But Dave McDonald, who this week opens negotiations with steelmakers for contracts to replace those expiring June 30, predicted that his 1,250,000-member U.S.A. will take home “an even greater agreement” than it won in 1956 after a five-week strike. That pact, says the industry, boosted steel wages and benefits by some 75¢an hour to the current average of $3.65.

Spring Tonic. Raises for steelworkers, argued McDonald’s committee, would cure all that ails the economy. “Increases in wages must be established in order that purchasing power be expanded for the benefit of the entire nation,” said the committee. “Short of government action, such a program offers the only hope of eliminating unemployment and stimulating greater production. There is not the slightest doubt that the industry can afford substantially higher wages and benefits and still remain highly profitable without increasing prices.” McDonald announced that his workers expect “a good share” of the industry’s “fabulous” profits (see below).

The industry angrily disagreed. Chairman Avery C. Adams of Jones & Laughlin said that from 1940 to 1958 the industry’s labor costs per man-hour increased 298%, while its shipments of steel products per man-hour increased only 30%. Thus, every recent wage hike kicked off a steel price boost (see chart). Adams and fellow executives contended that profits are still “inadequate” to support a wage hike. Even at last year’s relatively high levels, steel’s profits-to-assets ratio ranked 27th among the nation’s 41 key industries. The “obvious” solution to wage-push inflation, said Steelman Adams, is to restrict “the growing labor monopoly power, even as other monopoly powers, which have threatened our welfare, have been restricted.” Snapped an aroused Dave McDonald: “Baloney!”

Fall Memories. McDonald clearly needed a dramatic victory—something better than the gains won by the Auto Workers’ Walter Reuther last fall—to prevent revival of the rebel faction that tried to bounce him in 1957. Last week more mutinous mutterings rose from McDonald’s ranks. Pollster Samuel Lubell found that many a steelworker genuinely fears a steel strike, is lukewarm to demands for greater wages, fearing that they might cost him his job (TIME, May 4). To refute Lubell, McDonald arranged for seven of his wage-policy committeemen to stand up in public meeting and demand hefty wage raises. Said one: “A lynching bee would look like a Sunday-school picnic compared to what my members would do to me if I told them I voted not to ask for a wage increase.”

Amid all the speeches, Labor Secretary James Mitchell, speaking for a worried Administration, supplied the week’s straightest talk. Said he: “Higher profits or wages, resulting in higher costs and prices that people won’t pay, mean that some people may pay with their jobs. Workers and management have to recognize that consumers may not be willing to follow prices upward indefinitely.”

Productivity is a key talking point for both sides in steel bargaining. Last month the U.S. Bureau of Labor Statistics reported that steelworker productivity had dropped 6.2% from 1956 through 1958, and most of the drop (5.1%) was in 1958. Answered Dave McDonald last week: “An enormous error.” He calculated the respective declines at only 3% and 1.9%. B.L.S. hastily double-checked, admitted with embarrassment a “clerical error.” A bureaucrat had substituted the total of stainless steel ingots shipped (18,443 tons in 1958) for the total of stainless steel ingots produced (895,119 tons). Still refiguring at week’s end, the B.L.S. expected that Dave McDonald’s answers would prove correct. Moaned one bureau staffer: “Had we goofed on beet sugar instead of steel, nobody could have cared less.”