Steel Wages and Prices

January 6, 1965

Report Outline
Steel Labor Bargaining and the Economy
Prices and Profits in the Steel Industry
Union's Leaders and Steel Employment

Steel Labor Bargaining and the Economy

Uncertain Outlook on Steel Wages and Prices

Steel Makers and steel workers have entered on a period of crucial bargaining the outcome of which will have an important effect on the state of the nation's economy in 1965. Although the initial talks at Pittsburgh are reported to be progressing smoothly, a strike is still possible should a final contract not be signed by May 1. On six occasions since the end of World War II the United Steelworkers of America has called a nationwide work stoppage. The most recent labor-management impasse in steel ended in a 116-day shutdown in 1959.

Some observers believe that the economy might be as adversely affected now by the cost of a steel settlement as by the cost of a steel strike. Any settlement which made concessions to labor going beyond the government's anti-inflation guideposts might give the steel industry cause to insist on a general price increase. In an industry as basic as steel, the result might be to precipitate a general wageprice spiral that would threaten the country's orderly economic expansion. Government economists are reported to see a triple danger in the steel situation: “A strike-hedging inventory buildup, a springtime strike, and an inflationary settlement.” It was with these risks in mind that President Johnson at the turn of the year asked Gardner Ackley, chairman of his Council of Economic Advisers, to study the implications of the latest in a series of selective steel price increases.

Presidential intervention in the event of a bargaining breakdown doubtless would be forthcoming. Labor conflicts that threaten to cause a national emergency can be dealt with under provisions of the Labor-Management Relations [Taft-Hartley] Act of 1947. The public interest definitely would suffer if a protracted strike were to occur in an industry which provides jobs, directly or indirectly, for more than six million Americans. The basic steel industry produces more than three-fourths of all the metal used in the nation, has sales of around $15 billion a year, and employs 570,000 wage and salary workers in more than 300 communities in 37 states.

ISSUE TRACKER for Related Reports
Steel Industry
Mar. 05, 1982  Rebuilding the Nation's Steel Industry
Jul. 07, 1971  Steel Settlement
Jan. 06, 1965  Steel Wages and Prices
Dec. 27, 1962  Fortunes of the Steel Industry
Oct. 24, 1947  Steel Capacity
Sep. 02, 1944  Revision of the Little Steel Formula
Jul. 18, 1938  The Price of Steel
Aug. 19, 1933  The Steel Industry and Recovery
May 01, 1930  The Iron and Steel Industry
Manufacturing and Industrial Production
Unions and Labor-Management Relations