The Airline Strike

As the airline strike enters its second week today, one simple question remains largely unanswered: what are the issues involved?

Wages can't be the whole problem since management's offer of a 48 cents an hour pay raise is only 5 cents short of what the International Association of Machinists is demanding--and as one Harvard professor commented, "in these disputes you can always haggle pennies." The union has not pressed a large increase in fringe benefits, so that can't be the trouble either.

On the surface, at least, this leaves 40 or so local issues to be negotiated. One tip-off to the importance of these local disputes--concerning working conditions at specific airports, for example--is that when top union officials met with federal mediators the day after the strike began, five local chairmen were with them. But many observers agreed with Richard E. Neustadt, director of the Kennedy Library and a member of the President's board which tried to avert the strike, when he said the local issues could be settled "if there were a will to settle."

Why, then, the strike? Labor experts say the walkout resulted from a blend of union politics, large airline profits and attempts by the Johnson Administration to keep the settlement within its anti-inflation guidelines.

The machinist's union represents 34,4000 mechanics and related ground service employees at Eastern, National, Northwest, United and Trans World Airlines; the corresponding workers at American and Pan Am are represented by the Transport Workers Union, the same union that crippled New York City with a subway strike in January.

The mere existence of a rival union is enough to agitate the machinist's leaders, who because of their union's strong tradition of local democracy, are never took secure anyway. Add to this the fact that the transport workers' contract with the airlines expires in about three months, and that the rank and file of that union is still heddy over the New York victory (where they won wage increased of about 7 per cent), and the pressure on the machinists to come up with a fat raise is almost overwhelming.

Then, too, the airlines have been enjoying what the unions call "unprecedented prosperity." Naturally enough the workers want to share in the good fortune, which everyone, the Administration included, thinks is a fine idea--up to a point.

The Administration would like to see the dispute settled with the machinists getting a raise of about 3.2 per cent, which, so the theory of the wage-price guideline goes, would reward them for increased productivity but not spur inflation. At the same time, the Administration, with an eye on industry profits, is pressing the airlines for reductions--the youth fare being one example of the government's successes.

Though many economists, including John T. Dunlop, David A. Wells professor of Political Economy, don't regard the guidelines as "an effective policy," the Administration won't let the idea subside to a dead letter. The Civil Aeronautics Board's attempts to make things easier on the travelling public during the strike by reshuffling air routes for example, has been interpreted by some observers as, in effect, saying to management, "Look, boys, we have the power to assign routes, and and if you give in to the union, who knows how they'll be assigned?"

The announcement Wednesday that American Climax Meat Inc. had rescinded its price increase on Molybdenum was also aimed, according to government officials, at proving that the Administration is still taking the guidelines seriously.

The machinists seem to have underestimated President Johnson's commitment to this point. Union leaders probably planned a short strike, hoping that a walkout in the middle of the industry's money-making season would cause the airlines to cave in quickly. Management probably would not have been too displeased by an expensive settlement, since they would then be able to plead poverty when the CAB demanded further fare cuts.

The union's analysis was not far wrong; the small gap between the rival positions is a reflection of how good the appraisal was. But the IAM's calculations left out one factor--federal intervention. As a result of the government's role, both parties have found their bargaining positions frozen: the union can't back down from its demands because of internal politics and external rivalries; management fears that a union victory, which could serve as a model for other labor disputes in the near future, will bring down the wrath of the CAB.

Consequently, the differences that look so small on paper are at the bargaining table very large indeed. While things are being sorted out, 60 per cent of the nation's air traffic is grounded, and commerce is put, if not in a strangle-hold, at least in a half-nelson.