Collective Bargaining in the Pacific Coast Pulp and Paper Industry 9781512817300

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Preface
Collective Bargaining in the Pacific Coast Pulp and Paper Industry1

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COLLECTIVE BARGAINING in the PACIFIC COAST PULP and PAPER INDUSTRY Clark Kerr and Roger Randall

Published for the LABOR RELATIONS COUNCIL of the WHARTON SCHOOL OF FINANCE AND COMMERCE by the

UNIVERSITY

OF P E N N S Y L V A N I A Philadelphia

1948

PRESS

Copyright 1948 UNIVERSITY OF PENNSYLVANIA PRESS Manufactured in the United States of America

Clark Kerr is Professor of Economics and Director of the Institute of Industrial Relations at the University of California at Berkeley. His mediation and arbitration activities have been extensive and include important assignments in the meat-packing

and

Pacific Coast longshore industries. In addition, he has held membership on many important government boards, most recently

on

several

Presidentially

appointed fact-finding boards set up to inquire into public emergency labor disputes.

Roger Randall is Division Organizer for the Columbia River Division Inlandboatmen's Union of the Pacific. He has held administrative positions with the U. S. Department of Labor and the Bonneville Power Administration.

Preface

A comprehensive and well-rounded appraisal of industry-wide collective bargaining cannot be limited to discussions of theoretical analyses or of general principles. Questions of general policy need to be considered, of course. It is equally pertinent, however, to "get down to cases" in order to perceive the circumstances which induce multi-employer bargaining in particular instances and also to be aware of exactly what happens in consequence. In the process of selecting several examples of industry-wide bargaining in action for inclusion in this series of monographs, there was no doubt that priority should be given to the relationships prevailing in the pulp and paper industry of the Pacific Coast. The experiences in that industry have broad and general significance. So many of the problems encountered there are typical of those encountered by groups of employers and employees in their joint dealings throughout the country. The history of the pulp and paper group activities can afford invaluable guidance to them. A few selected illustrations will show why this case has general significance. Decisions made with respect to the types of companies which can effectively be included in the multi-employer bargaining throw needed light on the question : What is an industry for purposes of industry-wide bargaining ? This phase of the arrangements is also related to the fact that stabilization of working conditions among competing mills located in various regions might unstabilize relationships between pulp mills and the plants of other industries located in the same labor market. The dilemma of how to reconcile pressures for both industry and labor market standards is more clearly portrayed in the pulp and paper industry than in most cases. Such characteristics of bargaining in the pulp and paper industry of the Pacific Coast make it an unusual case for the consideration of all those who are interested in the general subject of industrywide bargaining. It is significant that Clark Kerr and Roger Randall, in their study Collective Bargaining in the Pacific Coast Pulp a/nd Paper [iii]

Industry, not only deal with many typical problems of industry-wide bargaining but also emphasize the contribution of that form of joint relationship to industrial peace in the industry. Labor relations on the Pacific Coast have had a generally turbulent history. The record of peaceful contract settlements and of constructive day-by-day dealings in the pulp and paper industry of the Pacific Coast assumes a heightened meaning when it is compared with industrial relations in the surrounding industries. In searching for an explanation, one comes quickly to the conclusion that, in the Pacific Coast pulp and paper industry at least, multi-employer bargaining was the one way to achieve a balance of bargaining power which would produce compromise agreements rather than strikes. To be sure, the relationship carries a threat of more widespread and more serious work stoppages than when company-by-company bargaining is practised. So far, that threat has induced peaceful and equitable settlements in the industry under discussion. Negotiators have had strong reasons to modify their extreme positions sufficiently to avoid a strike. The economic consequences of multi-employer bargaining call for the careful appraisal which the authors have made. Their observations regarding the effect of the labor-management relationship upon the consumer interests are especially pertinent. But the study will probably be of greatest interest to management and union representatives who feel the need for establishing stabilized conditions of employment among all the companies in that part of an industry which is located in a certain locality. Multi-employer bargaining on such a basis is practised extensively in the United States. Problems arising out of that form of dealing, rather than those incident to complete industry-wide bargaining, have to be continually grappled with around many a conference table. Kerr and Randall's study should assist the sounder development of these relationships. It also provides concrete experiences to be used in resolving the question of whether multi-employer bargaining should be encouraged or discouraged as a matter of sound social policy. GEORGE W .

Philadelphia August 11, 1948

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TAYLOR

Collective Bargaining in the Pacific Coast Pulp and Paper Industry1

M

U L T I - E M P L O Y E R bargaining on the Pacific Coast has, in different industries, been an instrument both of peace and warfare. The pervasiveness of this form of bargaining relationship in the region and its introduction into a multiplicity of situations has given clear accent to the observation that multiemployer bargaining has been no single, identifiable entity. It has been as diverse in its purposes, in its impacts on the parties and the public, and in its instrumentalities as the circumstances under which it has developed. Its consequences have been variously the achievement of peace, the aggravation and the enlargement of the area of warfare, and the more eiïective establishment of monopolistic restrictions. It thus becomes important to inquire not whether multi-employer bargaining, per se, has served a useful purpose, but rather under what circumstances it has contributed to industrial peace with justice, or to unjust peace, or to intensified combat. The pulp and paper industry is illustrative of peace with justice. It has had a remarkable record of successful negotiations. Neither side has dominated the other. Profits and wages both have been comparatively adequate. No evidence seems to exist of unionmanagement collusion against the consumer ; 2 nor have small firms been driven out of the industry. Multi-employer bargaining in this industry has passed the standard tests. Since this form of bargaining is now widespread in other segments of the economy and the trend has been increasingly in its direction, an examination of multi-employer bargaining in the pulp and paper industry as an instrument of industrial peace takes on significance not limited to 1The

authors wish to acknowledge, in particular, the assistance which they received from Alexander Heron, Vice-President of Crown Zellerbach, and John Sherman, Vice-President of the International Brotherhood of Pulp, Sulphite and P a p e r Mill Workers ; and the very helpful comments on the manuscript received f r o m George W . Taylor and W . N . Loucks. 2 T h i s does not mean that all prices have been determined under conditions of p e r f e c t competition, as will be noted below, but only that no joint action by the unions and employers to set them has taken place.

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its own locale and industrial context. This does not mean, however, that its mechanisms or spirit can be transferred into other environments and perform with an equal measure of success. Nor should it be understood that the test of public welfare is the only pertinent test from the points of view of labor and industry. They also judge multi-employer bargaining on the basis of its contribution to or subtraction from their own power and income in each specific situs of collective bargaining. Each evaluates it as a device which aids or injures under the individual circumstances which pertain. 1. The West Coast Pattern The experience of the pulp and paper industry needs to be viewed, in part, in the light of the widespread practice of multiemployer bargaining in the region. The general acceptance of such bargaining contributed to both its original favorable reception and its subsequent perpetuation in pulp and paper. Multi-employer bargaining has become the customary pattern on the Pacific Coast. Most of the major industries after World War II have resorted to some kind of associational representation of employers in the conduct of their industrial relations. This generalization held true for the salmon canning industry of Alaska, with headquarters in Seattle; for lumber both east and west of the Cascade Mountains in Oregon and Washington ; for fruit and vegetable canning in all three of the West Coast states ; and for motion picture production in Hollywood, among others. In each of these instances employers banded together in district-wide or state-wide associations. Affiliation of employers on a coast-wide basis has prevailed in the shipbuilding, aircraft, longshoring, maritime transportation, and pulp and paper industries, to name a few. City-wide amalgamation has been more common in the service trades, such as cleaning and dyeing, local cartage, and retailing. 3 What has caused the extraordinary development of employers' associations in this region? The modern West Coast employers' association has been a product largely of the past decade and a half. The prominence of such associations in this area may be explained by two factors. The first supplied the opportunity ; the second the necessity. Business units on the West Coast have been predominantly medium-sized and small-scale. This has been largely true •For a general description of multi-employer bargaining on the West Coast, see Clark Kerr, "Collective Bargaining on the Pacific Coast/' Monthly Labor Review, April 1947.

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because the great mass-production industries—steel, automobile, rubber, and meat-packing, among others—have not located their main operations on the Coast. The individual employers, therefore, have not customarily had great bargaining strength, nor have the community situation and tone of industrial relations been so influenced by the existence of large employers as in Detroit or Chicago or Pittsburgh. Medium-sized and small employers could only hope to approximate the degree of power of the large eastern corporations in industrial relations through employers' associations. But yielding sovereignty in the industrial relations field runs counter to the competitive, individualistic ideology of the American employer, which is encouraged both by the pursuit of economic gain and the code of conduct imposed by the community. Amalgamation for the sake of coagulation of power, consequently, has not taken place except under external pressure. The external pressure came from a vigorous labor movement. The trade unions on the Coast, and particularly in San Francisco and Seattle, have been relatively strong over a long period of time. LJnion-agreement coverage in 1947 was about 20 per cent more complete than for the nation as a whole,4 although manufacturing industry has been comparatively less fully developed and elsewhere it has been in manufacturing that mass membership has been obtained by the unions. The service trades have been more completely organized. The unions also have had a history of aggressive action most dramatically demonstrated in the logging camps and on the waterfront, and by the Seattle (1919), San Francisco (1934), and Oakland (1946) general strikes. Aggressive unions have learned how to "whipsaw" unorganized employers. They attacked them one at a time, concentrating their power now here and now there. Concessions by one and then another employer were standardized at increasingly higher levels. The answer of the employers was counter-organization in an effort to match or surpass the power of the unions. Once a number of employers' associations became well-established, amalgamation further spread by example. It became the common, accepted practice, and many associations were started which otherwise never would have been born except for the process of imitation. An employer who did not belong to an association was only half-dressed for industrial relations. Ibid.

1

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The conjunction of relatively small employers with strong unions was thus the primary cause. The proof of this may be found not only by comparing the East and the West, but from internal evidence on the Pacific Coast. It was in San Francisco and Seattle, where the unions were strongest, that employer organization spread first and has been the most intensive. It has been, also, the branch plants of eastern corporations—General Motors, Ford, U. S. Steel —or a Henry Kaiser which have been the outstanding exceptions to the rule of universality of membership in employers' associations. Industries which are composed of large employers, such as aircraft and oil refining, have had weak associations or none at all. The extent of multi-employer bargaining is indicated by the fact that in 1947 "three-fourths of the employees in San Francisco covered by contracts were working under the terms of master agreements." 5 The ratio was equally high for Seattle, Alaska, and the Hawaiian Islands, but somewhat lower for Portland and Los Angeles. Employers' associations have become sufficiently numerous to warrant a Northern California Council and a Western Employers Association. 2. The Industry and the Parties

The pulp and paper industry of the West Coast has been prosperous and rapidly expanding. The greatest growth has occurred in the last decade and a half. Pulp and paper ranked in 1940 as the fourth largest employer in Oregon and Washington, but was a very minor source of employment in California. The West Coast segment of the industry has benefited from the competitive advantages of good quality raw material and access to water transportation. The industry, as defined for the purpose of this study, includes the making of pulp and paper and such paper products converting as takes place in the paper mills, but not separate paper products converting plants. The making of pulp and of paper are two separate operations which may or may not be combined at the same location. The first attempts at unionization came during World War I. Strikes were called in 1918 and 1919 in two Northwest mills but no permanent organization was established. In 1933, under the impetus of the New Deal and the NRA, a spontaneous organizational movement arose. These original groups were shortly affiliated with ' C l a r k K e r r and Lloyd H . Fisher, "Multi-Employer B a r g a i n i n g — T h e San Francisco Experience," Insights into Labor Issues, edited by J . Shister and R. Lester, a n d published by t h e Macmillan Company, 1948.

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two long-established A.F. of L. unions whose jurisdiction covered the industry—the International Brotherhood of Pulp, Sulphite and Paper Mill Workers and the International Brotherhood of Paper Makers.6 The former is a quasi-industrial union which normally extends membership to all production and maintenance workers in the industry except those belonging to the latter union, which is a craft organization of the highly skilled paper machine operators. The two unions work closely together in collective bargaining. They are both old and firmly established A.F. of L. unions with over 50 years of experience in dealing with employers, initially in New England, but subsequently in the Great Lakes states, Canada, the South, and the West Coast. They have a long history of contract observance and their officers enjoy a high reputation for integrity. The operators are affiliated with the Pacific Coast Pulp and Paper Manufacturers' Association, organized in 1934. Eighteen firms with 32 mills now belong to the association. Only three pulp and paper firms of any size with a single mill each do not hold membership.7 Crown Zellerbach and the closely associated Fibreboard Products, Inc., have between them 13 mills. Rayonier with three mills and Weyerhaeuser Timber Company (Pulp Division) with two mills are the other two principal companies. The remaining 14 firms, with two exceptions, are autonomous pulp and paper manufacturers with a single mill each. The 32 mills are not homogeneous. None of the seven plants in California make pulp. Five of the seven Oregon plants are integrated producers of pulp and paper, one makes only pulp, and one is engaged only in paper converting; in Washington it is nine, seven, and two respectively. 8 Approximately 15,000 production workers are employed, or an average of about 500 per mill. The smallest has less than 200 and the largest 2000 employees. Less than 2 per cent of the eligible workers, according to the last available data, do not belong to one or the other of the two unions.

3. The Acceptance of Multi-Employer Bargaining In August 1934, the two unions, after preliminary individual contacts, approached the industry as a whole to undertake collective For a history of the two unions see Roger Randall, Labor· Relations im. the Pulp and Paver Industry oí the Pacific Northwest, Northwest Regional Council, 1942. While some paper converting plants are included in the association, most are not. 8 The association had thus combined mills which have to some extent sold to each other and bought from each other ; but the pulp mills have sold to many non-members, and the paper and paper converting plants have bought from some non-members. 6

7

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bargaining. On the suggestion of the union leaders, the employers had already formed a tentative association which was later formalized. The unions proposed the development of a coast-wide master agreement. After three days of negotiation a written region-wide contract was consummated. The unions were recognized as bargaining agents for their members among the production and maintenance workers. In 1936, a maintenance-of-membership clause was negotiated. 9 The original 1934 contract provided for wage increases, the principle of wage standardization among the mills, and a formal grievance machinery including protection against arbitrary discharges. In that turbulent period of industrial relations these concessions constituted a grant of sovereignty to the union and a level of contractual provisions matched in rapidity and peacefulness of attainment by few other bargaining systems. This initial relationship marked by its high degree of amity started collective bargaining on its historic course unmarred by the scars of combat from the first encounter so characteristic of many industries. This was three years before the Supreme Court declared the National Labor Relations Act to be constitutional. It was during a period when in the lumber industry of the Northwest and the Pacific Coast longshore industry—two of the industries most directly related to pulp and paper—violent industrial warfare was raging. In steel, autos, and rubber, among others, early attempts at unionization were meeting with strenuous employer opposition. Under these circumstances the acceptance by the pulp and paper employers of multi-employer collective bargaining warrants examination. Reasons existed for rejecting multi-employer bargaining. The coast-wide contract established the unions more firmly than, with the varying strength of the local organizations, plant-by-plant bargaining would have done. It constituted recognition of an autonomous sphere of influence belonging to the unions. Further, each individual employer, and particularly the smaller ones, yielded some of their sovereignty to the association. They were bound to go along with decisions of the entire group, with which decisions they might not agree. Particularly for the marginal mills was there the risk that they might not be able to meet the wage rates jointly set and thus they might fail to survive. The individual firm made a substantial bestowal of power, first, on the unions, and second, on the 9

A modified union-shop clause was adopted in 1948.

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employers' association—a reduction of individually held authority not usually conceded except under severe pressure. Employer acceptance. The NRA was an important factor, both generally and specifically. It encouraged unionization, union recognition by employers, and the industry-wide approach to problems. Beyond that, J. D. Zellerbach, President of Crown Zellerbach and the most influential single employer in the industry, had during 1933 and 1934 extensive associations with John P. Burke and Mathew Burns, the presidents of the two unions. They participated with Zellerbach in the protracted NRA pulp and paper code hearings and determinations, and Zellerbach was greatly impressed with their statesmanship and their intimate knowledge of the industry. The union leadership conducted itself creditably. Responsible representatives of each of the unions, prior to the negotiations, visited executives of each of the companies. They sought to allay any unfounded fears and suspicions by a forthright explanation of the unions' aims and objectives. These leaders had well-established reputations for sympathy with and understanding of the problems of the industry, as well as of the workers, in their relations with eastern employers. Further, management had no reliable means of measuring union strength in all the mills and may have overestimated it, although an election conducted in the Crown Zellerbach mills showed strong A.F. of L. support in some of the larger plants. By August 1934, West Coast employers had seen demonstrated the determination of organized labor in the Pacific Coast waterfront and San Francisco general strikes, which had reached their peak of intensity in July. The desire to avoid similar developments in the pulp and paper industry was an important factor in union recognition. The anxiety over the growing industrial relations conflict in the region, and particularly in maritime transportation and lumber, and the wish to escape it in pulp and paper may likewise have encouraged the several companies to join together in an employers' association. As was noted above, such affiliation was becoming a customary reaction of employers on the West Coast when confronted with a difficult industrial relations problem. One employer when asked why they joined together in the pulp and paper industry in 1934 said, "We were afraid." Some efforts have been made at regional separation of product markets, particularly under the NRA, but they have never been [7]

permanently successful. 10 The firms, however, particularly in 1934, were somewhat accustomed to thinking of the Pacific Coast area as an economic unit. This probably reduced their opposition to wage uniformity in that same area and increased their willingness to cooperate in an employers' association. The product market area set the limits for the application of the uniform labor agreement. The unions also accepted this area as an appropriate one for union administration. The pulp and paper industry had leaders with a high degree of foresight. J. D. Zellerbach had an established reputation as a farsighted employer. Another influential management representative was R. B. Wolf of the Weyerhaeuser Pulp Division. Wolf had had an extensive personal experience with these same unions in the East. He was a strong advocate of meeting the advance of unionism cooperatively on the grounds that this new force could be directed into constructive channels beneficial to management and workers alike. Advantages for employers. Multi-employer bargaining turned out to have certain advantages for the employers, whether clearly foreseen or not. It gave the union a greater sense of security, and may have helped assure stability of leadership. Both developments made it possible for the unions to conduct themselves in a more responsible way. Standardization of wage rates and conditions also had its advantages. No firm could voluntarily, or under union pressure, raise rates, thus opening the door for wage advances in the other firms. Wage standardization particularly reduced "pirating," through wage inducements, of the experienced men in the highly skilled key jobs, whose scarcity was being augmented by the expansion of the industry. Nor could any firm pay less. Lower rates could have affected the other firms in at least two ways. Lower rates might have meant lower costs and prices and thus more strenuous competition. They might also have encouraged unrest and the rise of dissident local union leadership which might have extended its influence elsewhere. In general, multi-employer bargaining also gave the dominant firms, with better developed staff facilities, a chance to influence grievance settlement and industrial relations policies in the smaller 10

J o h n A. Guthrie, " P r i c e Regulation in the P a p e r I n d u s t r y , " Quarterly Journal of Economics, F e b r u a r y 1946. ( T h e West Coast was set u p as a s e p a r a t e " p r i c e zone" u n d e r t h e N B A . )

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firms, which otherwise might have handled them less wisely and thus introduced a factor upsetting to the entire industry.11 The formation of the Manufacturers' Association provided the smaller mills with a voice in the formulation of industrial relations policy instead of being obliged to follow more or less exactly the lead of the "Crown group" without benefit of prior consultation.12 Alone they might not have been able to make more favorable settlements with the unions than the "Crown group," and they might have been forced to make less favorable ones.13 Thus multi-employer bargaining provided the employer group essential protection against irresponsible union actions and, equally important, against irresponsible action by its own members. Unions' balance sheet. The unions also had assets and liabilities to examine in judging the merits of multi-employer bargaining. On the liability side was the loss of a bargaining tactic. By picking off one employer at a time, the unions might have by constant application of "whipsaw" tactics obtained greater concessions, at least in the short-run. In San Francisco a number of employers' associations had to fight for collective bargaining rights to force the unions to give up the "whipsaw" technique. On the asset side, particularly from the point of view of the union as an institution, there were several substantial items. The unions were able to face the employers on a consolidated basis rather than local by local. Administration was greatly simplified. This was particularly important initially when the unions had no trained local leaders and needed to weld their organizations into cohesive 11

" T h e Crown g r o u p , " while influential, has n o t dominated the association. T h e "independents" claim it has leaned over backwards to avoid such domination. I t a p p e a r s , also, t h a t Fibreboard and Rayonier, sometimes identified as p a r t of the "Crown g r o u p , " have been the most f r e q u e n t objectors to policies suggested by Crown Zcllerbach. 12 Crown Zellerbach, as the largest producer, had a g r e a t advantage in becoming t h e contract leader. I t is not certain, however, t h a t it would have become the pace-setter In establishing contract t e r m s with the unions. In Los Angeles, most of the p a p e r converting firms outside the M a n u f a c t u r e r s ' Association have not historically, even with union contracts, patterned their wage structures exactly a f t e r the levels in the u n i f o r m labor agreement, although this has been the increasing tendency. In the East, where dominant firms also have existed, wage rates have been quite diverse except in a few restricted areas. I t may be particularly doubted t h a t the converting firms would have followed, since they were under the greatest pressure f r o m competing plants with lower wage levels. I t was much more likely t h a t t h e comparatively f e w e r pulp and p a p e r mills outside the "Crown g r o u p " would have followed. The Manuf a c t u r e r s ' Association, however, offered an o p p o r t u n i t y f o r more advance consultation, more active participation, more conformity in actions, and generally more effective cooperation than a system of wage leadership would have offered. If leadership were to be exercised, the association offered the better chance. 18 Standardization of wage rates, however, has not m e a n t standardization of labor coste p e r unit. The more efficient mills, though paying the same rates, have had lower costs. With prices fairly u n i f o r m also, their profit margins have been larger than f o r the less efficient firms. I n other words, lack of efficiency has n o t resulted in lower wage rates or higher prices ( a t least f o r the s t a n d a r d items) b u t in lower profits.

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units. One contract was negotiated rather than a number. Standardized wage rates and conditions greatly reduced the number of grievances to be processed. Further, as it later developed, an effective barrier had been placed in the way of any rival industrial union. The task of organizing an entire industry simultaneously is ordinarily beyond the capacity of a rival union, which might, however, be able to pick off a plant at a time. Rival leadership within the union, likewise, had it developed, would have had a more difficult time. The task of making oneself known favorably throughout an entire industry was a formidable one. Thus the unions and union leaders gained from reduction of administrative burdens and enhancement of security. What is normally called "the union" is in reality at least three more or less distinct entities—(1) the institution, (2) the leadership, and (3) the membership. 14 Their interests are not necessarily identical. The union-as-institution and the union-as-leadership clearly gained. The eifect on the union-as-membership was not so immediately evident. It lost many advantages which might have resulted from the use of one bargaining tactic—the "whipsaw"—and thus the possibility of greater short-run improvements in wages and conditions on a plantby-plant basis. It lost some opportunity to change leadership or union affiliation, if it desired either type of change. Reduced administrative effort, however, lessened the burden of dues. Better relations with management probably improved the net position— gross gains less costs of obtaining them—since strikes were not necessary. Greater security for the union-as-institution bulwarked contractual rights and privileges and enhanced the power and influence of the institution. The members in less profitable mills and low wage-rate communities gained comparatively more than those in more profitable mills and high wage-rate communities by having their rates and conditions pulled up. Some pulling down may also have occurred. Individual locals were bound by the majority determinations on a coast-wide basis and lost some autonomy. Viewed altogether, the net result was undoubtedly on the positive side. 4. The Bargaining Apparatus

Any bargaining system to function at all must have an apparatus, however informal. An approved test of this bargaining 14

See A. M. Ross, "The Trade Union as a Wage-Fixing Institution," American September 1947.

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Economic

Review,

machinery is whether it aids or impedes the peaceful resolution of conflicts to the ultimate satisfaction of the parties. A great variety of procedures exists.15 No one set of procedures fits all circumstances. The pulp and paper system on the West Coast has been somewhat unorthodox and has not always conformed to what is accepted as best practice. It has been tested for over a decade by the parties, however, to their satisfaction. The apparatus in this bargaining relationship had to serve two primary needs. One was the reconciliation of conflicts between the two parties. The other was the reconciliation of differences within management and within labor. The former type of reconciliation could not permanently be achieved unless the latter was also, and the latter was the more difficult for at least three reasons. (1) Union-management conflict was from the start resolved peacefully and the parties wanted to continue in this fashion. Peaceful relations between the parties, however, made reconciliation within each party more difficult, particularly on the union side. Warfare with the other party traditionally has served certain purposes in industrial relations. It has been taken as a symbol of good faith bargaining. It also has developed cohesion through the necessity of unity in the face of external opposition. Long-continued peaceful relations have sometimes aroused suspicions that the best bargain is not being driven and have failed to encourage the same degree of internal unanimity. (2) The unions were democratic.16 This meant that strong local leaders developed and that the membership demanded a voice in decisions. Top leadership was not able to impose its will without consultation or consideration of possible repercussions. (3) The area covered was large, virtually from the Canadian to the Mexican border. Individual companies did not have the identical operating problems or industrial relations viewpoints. Two unions and many types of workers, ranging from unskilled women to highly skilled men, were involved. Geographical dispersion and disparity of interests made the problem of propitiating all elements and gaining acceptance of decisions the more difficult. The most unique feature of the mechanism—the "goldfish bowl" —met the needs of this particular combination of circumstances. Peaceful relations, democracy in the unions, heterogeneity of in12

See for example: Neil W. Chamberlain, Collective Bargaining Procedures, American Council on Public Affairs, 1944. 10 The unions have not had any clear-cut party system internally, but each union has had ite conservative and liberal elements.

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terests on both sides of the table taken together constituted the essential milieu within which the parties had to work and for operation within which they had to invent an appropriate set of procedures. Procedures. Bargaining has taken place between the Manufacturers' Association and a joint council of the two unions known as the Pacific Coast Pulp and Paper Mill Employees' Association. The Manufacturers' Association has held a conference, prior to the annual negotiating sessions, at which each mill has had one vote. This conference has determined what demands would be presented to the unions and in general what concessions would be made in response to union proposals. The eight members of the employers' negotiating committee have also been elected. The Employees' Association has been based on the voluntary affiliation of the individual plant locals, not all of which have at all times chosen to participate. 17 This association has also held a conference in advance of contract negotiations. Originally it operated on the basis of one vote for each local regardless of size, but in recent years the larger locals (over 500 members) have had four delegates as compared with three for the smaller locals. An advantage out of proportion to membership has thus been given the Paper Makers' locals, which are smaller than the Pulp and Sulphite Workers' locals. The conference has deliberated on the proposals to be made to the employers and the general approach to the bargaining, and elected the eight members of the union negotiating committee. The negotiating conference has usually been held annually in Portland. 18 The chairmanship has rotated from year to year between a representative of the unions and of the Manufacturers' Association. On one side of the negotiations has been the union committee of eight, assisted by international officers of the unions who have done most of the actual negotiating; on the other side, the employers' committee of eight. In the background have been the 100 to 150 delegates elected to the Employees' Association representing the constituent locals, and 50 to 100 representatives of the individual mills who have comprised the Manufacturers' Association. These " T h e t e r m s of t h e u n i f o r m labor a g r e e m e n t have covered all locals, whether affiliated or not, through actions of t h e international unions, 18 F o r a description of the operation of this conference see R. B. Wolf, Harmonizing Security and Individual Rights: Management's View Point, Bureau of Personnel Administration, Conference 16, New York, F e b r u a r y 9, 1939.

[12]

latter delegates have usually been the local plant managers and personnel directors, but top officials of the several corporations have always participated. The sessions have been conducted with some formality, opening and closing speeches have been made for each side, and a written record has been kept. Resort to legal technicalities, however, has been avoided. While the actual negotiating has been done by the sixteen men on the two committees and their advisors, the presence of a large group around them has led to some "playing to the gallery." Subcommittees have been formed on occasion and caucuses resorted to by both sides. 'Off-the-record" discussions also have taken place. The conference usually has proceeded to a conclusion without undue delay or stalling by either side. Both sides have made use of factual data about the industry, and the composition of the two groups has assured intimate knowledge of local operating problems. The Employees' Association for several years made an annual survey of the economic state of the industry which it circulated to each of the locals in advance. The two committees have been empowered to reach tentative, but not final agreements, although the process of ratification has been normally a formality since the much larger groups on both sides have indirectly participated. The final draft of the contract arrived at by the two committees has been presented to the Manufacturers' Association for approval or rejection. A majority vote has been binding on all members by prior commitment made before the negotiations have been undertaken. This has prevented any single reluctant firm or minority from blocking acceptance of an agreement which the majority favored. Too often in multi-employer bargaining, when unanimity is required, extremists on the employer's side have been able to block agreement, and effective policy determination has passed to them rather than being held by the more moderate elements. In the pulp and paper industry, with majority rule and nearly 40 per cent of the voting strength concentrated in the hands of the Crown Zellerbach and closely related Fibreboard mills—both of which companies have been noted for their enlightened policies—and with farsighted management in control of other mills as well, emphasis has been placed on efforts to reach agreement with the unions and to accept such agreements once reached. The process of acceptance on the union side has been complex. [13]

The tentative agreement has been referred first to the elected delegates who in turn have referred it to the full local membership f o r ratification through a referendum; or the delegates have rejected it and instructed the negotiating committee to undertake additional negotiations. Finally, the agreement must be signed by the international officers of each union, since the contracting parties have been the international unions and the individual firms which have signed identical contracts. Since the delegates from the locals and representatives of the internationals have been present at the negotiations, the last two sets of approvals have always been forthcoming. The "goldfish bowl." This bargaining system has been popularly known as the "goldfish bowl." Democratic procedures have been utilized on both sides in the formulation of their respective positions. Actual negotiations have been conducted in the presence of substantial numbers of widely representative delegates of workers and managements. Acceptance of negotiated agreements has been secured in a democratic fashion from the workers themselves, and from the representatives of the mills on the basis of voting equality. The conduct of the goldfish bowl has run counter to one generally recognized principle of successful pegotiations—small negotiating groups. Chamberlain, f o r example, observes : "The ultimate in efficiency is, of course, a one-man [union] committee. . . ," 19 The Massachusetts report on industrial relations also advises: "Keep the negotiating body small."20 The goldfish bowl has, however, worked well. It is not the explanation, nevertheless, of the successful relations in the industry, Had relations between the parties been basically combative instead of cooperative, these same procedures might have proved detrimental to peaceful negotiations by encouraging mutual public recriminations. Initiated by the unions, the goldfish bowl has served management as well. Under the circumstances outlined earlier, it has eased the problem f o r the unions in at least two ways. First, it has made it politically less dangerous to agree, and this has been particularly important since warfare has been the more common situation in two of the most closely related industries—maritime transportation 10 Chamberlain, 80

op. cit., p. 31. Governor's Labor-Management Committee, Relations, House Document No. 1875, 1947.

Massachusetts

[14]

Proposals

for

Better

Industrial

and lumber. Local representatives of the workers could view the process and judge for themselves whether the bargaining had been forcefully presented. Verbal battles, under these circumstances, have been used as proof, and resort to more violent forms of conflict obviated. 21 The system of ratification, ending with a referendum of the membership, has dispersed the responsibility for acceptance of a contract and afforded essential protection to the top leadership. The open nature of the process itself and the chance for wide participation have helped recommend the results to the membership. Under the circumstances it has reduced the cost and risk of peaceful conduct to the top leadership. Second, it has had important educational benefits. Representatives from each mill have learned more about collective bargaining, about the industry, and about the contract. Some of this information has been passed back to the membership, and it has helped most specifically in the administration of the contract. Local leadership has had a much better concept of what new contract terms meant and how they were to be applied. Copies of the written transcript, to aid this educational process, have been made available at each local mill, and on returning home from the annual conference the local delegates have held sessions to explain contract changes to shop stewards and the entire membership. 22 Advantages to the employers have been twofold. Local management has been made more cognizant of the proper application of contractual requirements and more informed about industrial relations in general. On returning home it has conducted meetings with foremen and other supervisors to explain how to live under the contract. This joint knowledge, at the operating level, of the language and intent of the contract has reduced grievances and misunderstandings. Further, top management has obtained a check on its local managers. While "beefs" against local management have not been proper subjects for the annual conference, top managers have been able to observe the quality of relationships maintained by It appears that negotiations have, a t times, been prolonged beyond the moment when the top leaders of the two parties have realized w h a t the final outcome would be, in order to give the union representatives an opportunity to show a maximum of effort to g a i n concessions. F i g h t i n g with words has been considered preferable to more costly methods. Management has indicated an appreciation of the essential nature of unions as political institutions and permitted them to " p u t on a s h o w " when necessary without resenting it. Concessions, f o r this reason, have sometimes been delayed. This has permitted the union leaders to meet the test of having f o u g h t to g e t the maximum gains. 22The parties also have prepared a Statement of Policy which has set forth verbatim quotations f r o m the transcript of negotiations c l a r i f y i n g the intent of many of the clauses. This haa been printed to accompany the contract. 21

[15]

local plant managers with the elected representatives of their employees. One of the tests of the success of a local manager has been his ability to handle the human problems of the plant. Each manager has been under compulsion to get along sufficiently well with the men under him so that he would not be exposed, directly or indirectly, to the criticism of union representatives at the annual conference, where the eyes of top management were fixed upon him, and his performance in this important area of management function subject to evaluation. Thus the goldfish bowl has served a dual purpose. It has protected top leadership on both sides—on the union side from repudiation, on the employer side from departures by local management from the policy of pursuing good relations with the employees. It has spread knowledge of industrial relations and contract terms from top to bottom of both the management and union structures. Golden and Ruttenberg note that "Participation of workers, union representatives, and management at all levels is a prerequisite to the successful administration of a collective bargaining contract." 23 Had the parties not wanted peace, had the unions not been democratic, or had the situation been less complex and interests more homogeneous on both sides, the goldfish bowl would not have been so useful and, in fact, might rather have served to undermine relationships. Under the circumstances, however, it helped to secure internal reconciliation of divergent interests within the unions and within management, and this contributed immeasurably to peaceful relations between the parties. The greatest threats to good relations have arisen within each side first, and then between them subsequently as a result. 5. Wage Determination One of the primary and recurring problems discussed at each annual conference has been wage rates. Wage determination is made more complex by multi-employer bargaining, particularly in the pulp and paper industry. The fact of multi-employer bargaining removes several standard tests of what constitute equitable wage rates. Further, as in the pulp and paper industry, the standard wage rate (if a uniform rate structure is adopted) must be applicable to quite diverse situations. 23

Clinton S. Golden and Harold J. Ruttenberg, The Dynamics and Brothers, 1942, p. 82.

[16]

of Industrial

Democracy,

Harper

Among standard precepts of wage settlement, at least two have not been available to the parties. No point was served by surveying what other employers in the same industry in the same area paid since they all paid the same.24 Such reference to the "market" or "prevailing" rate was meaningless. Under plant-byplant bargaining it has been a standard criterion. Nor was there any "leader" whose rates or rate of increase could be emulated by the other companies, since they all acted in concert. Application of other standards has been complicated. The general level of rates in the local labor market has been another customarily accepted point of reference. But pulp and paper mills have been located in labor market areas with quite diverse wage levels. Rates in the Puget Sound area, for example, have been substantially higher than in Southern California. Puget Sound rates, if used as the basis of adjustment, would be abnormally high for Los Angeles, and Los Angeles rates abnormally low for the Puget Sound area. "Ability to pay" also has been more difficult to ascertain. Some mills have used modern machinery, some have had virtually obsolete equipment. Some mills have been very efficiently managed, others less so. Labor as a percentage of total cost has been much higher in converting plants than in pulp mills. Comparative product prices also have fluctuated. Sometimes prices for pulp have been the most favorable, other times for paper, other times for converted paper products. Consequently the profit positions of the mills at any moment of time have been quite different, and the impact of any given wage bargain on costs not at all uniform ; nor has the situation been static. Productivity per man-hour and changes in productivity similarly have been quite variable from mill to mill. Thus neither labor market nor product market influences have been as persuasive as if bargaining were on a plant-by-plant basis. The diversity of conditions in both the pertinent labor markets and the product markets taken together has on occasion been doubly upsetting, as will be noted in a subsequent section. Reference, consequently, has been made more to factors external than internal to the industry, and more to equity than to economics. The cost of living has recently been used by the parties as a point of reference ; but of more particular use have been wage 24

Except in Southern California where a m a j o r i t y of the p a p e r converting outside the M a n u f a c t u r e r s ' Association and paid lower rates.

[17]

firms

have been

rates in related industries or crafts. Relatedness has been determined as much by political as by economic considerations. For the bulk of the workers, the important comparison has been with the lumber industry. Most of the mills have been located in the Pacific Northwest where lumber has been the major source of industrial employment. Some of the mills, as in Everett, Longview, and Hoquiam, for example, are in communities where lumbering has been the dominant source of livelihood. The major alternative place of employment has been in the sawmills. Equally important, the major alternative vehicle for organized expression has been the International Woodworkers of America (C.I.O.), which on occasion has conducted vigorous organizing campaigns among the pulp and paper workers. It has met with some spasmodic success, particularly in Everett and Hoquiam. The two established unions have had to match as closely as possible the wage rates in lumber or face the danger of loss of membership to the C.I.O. In fact, pulp rates have varied around lumber rates, sometimes leading and sometimes following. In the fall of 1947 the base rate in pulp and paper was 5 cents below that in lumber. This much of a differential could be successfully borne, since comparatively few pulp workers were at the base rate and the average rate was higher than in the sawmills, and steadier employment throughout the year was an additional offsetting factor. How much greater a differential could be maintained without upsetting political repercussions is problematical, but it could hardly be much greater. The employers have recognized the necessity of maintaining some relationship with lumber rates. In January 1947 they voluntarily granted a wage increase, even though the contract was not open, when the pulp common labor rate had fallen substantially below the base rate in lumber and the general pattern of wage increases was greater than in pulp and paper. For the higher paid craft maintenance workers the important relationship has been with craft rates for maintenance work in other industries, and for much the same reasons. Craft workers could move from industry to industry with some facility, since their skill is readily transferable. Beyond that, craft workers could readily shift their allegiance to the craft unions if it were apparently to their economic advantage. Craft unions could promise equalization with rates elsewhere and probably make good on their promises because of the small percentage that craft labor costs have been of [18]

total costs. The two unions would not fancy this prospect, nor have the employers wished to see a fractionalization of bargaining units, with potential jurisdictional squabbles and the necessity of bargaining with additional numbers of unions, locality by locality, since that is how the craft unions have operated. Among other things, standardization of rates would prove more difficult. Consequently craft maintenance rates in the pulp and paper mills have customarily been kept at or above rates for comparable jobs in other industries. As a result the pulp and paper unions on occasion have been called, by the representatives of the major rival union, "coattail riders." While they have nearly as often led as followed the lumber industry in common labor rates since 1934, they have on important occasions followed. The prevalence of "pattern" increases since World War II, however, and the effective determination of wage increases in a relatively small number of union-management power centers have made many, if not most wage settlements, temporarily at least, more or less imitative of settlements elsewhere. Such imitation has involved considerable economy. Having been fought out elsewhere at cost to others, the pattern has been followed with some safety and with a minimum of controversy. Fortunately the industry has been sufficiently profitable so that it could, in general, meet the wage standards set by the lumber and craft unions. What was politically necessary for the unions was economically feasible for the employers. Wage standardization probably has spread the net returns to owners more widely from low to high as between the marginal and infra-marginal firms, and has discouraged location of plants in the less advantageously situated areas, since adjustments have not been made on the ability to pay of the individual firm or in the different areas. Marginal plants could not add to their profits through lower comparative wage rates; nor could less well situated areas gain plants through the inducement of relatively low wages.25 25

A t t h e o t h e r e x t r e m e f r o m i n d u s t r y - w i d e s t a n d a r d i z a t i o n would h a v e been w a g e d e t e r m i n a t i o n solely on local considerations, mill by mill. H a d t h e u n i o n s had t h e d o m i n a n t s t r e n g t h , they could h a v e set wages a t t h e m a x i m u m level f o r each mill. T h i s policy of m a r k e t d i s c r i m i n a t i o n would have maximized the w a g e bill of t h e i n d u s t r y . Some u n i o n locals would h a v e had h i g h e r w a g e r a t e s t h a n u n d e r region-wide b a r g a i n i n g . Conversely, if d o m i n a n t p o w e r had resided with t h e industry, wages could have been s e t a t t h e m i n i m u m level f o r each mill. This would h a v e minimized t h e w a g e bill of t h e i n d u s t r y . Some mills would h a v e had lower w a g e r a t e s t h a n u n d e r region-wide b a r g a i n i n g . M a n y o t h e r possible s i t u a t i o n s exist. Most likely, t h e mills with t h e m o r e f a v o r a b l y priced p r o d u c t s a n d t h e m o r e efficient o p e r a t i o n s , and located in h i g h e r w a g e labor m a r k e t s would h a v e p a i d t h e h i g h e r wages, a n d thus they benefited m o s t f r o m w a g e s t a n d a r d i z a t i o n , a n d t h e union locals in those p l a n t s benefited l e a s t ;

[19]

Wage rates apparently have been more stabilized in relation to cyclical swings in region-wide bargaining. In the East, where multiemployer bargaining does not prevail, one-third of the mills cut wages during the 1938-1939 recession, while none did on the Pacific Coast.26 6. Contract Administration A uniform labor agreement has been in effect since 1934. It has run from June 1 to May 31, and has been automatically renewed if neither party gave notice of desire to change. Since it covers 32 mills and 15,000 workers, some disagreements have naturally arisen during the life of the agreement. Machinery has been established to process them. Relatively few serious grievances have arisen, however. Relations between the parties have been relatively harmonious. The companies have pursued personnel policies conducive to good employee morale. The careful educational process relating to contract changes has minimized local misunderstandings. The contract has not permitted work stoppages. It has required that work be continued while grievances are processed. Six steps have been provided for the disposition of grievances. (1) The first step has been presentation of the grievance by the employee to the foreman, accompanied by a union shop steward if the employee has so requested. Normally the foreman has been given wide latitude in handling cases, unless an interpretation of the contract has been involved. The unions have not objected to this direct initial presentation of grievances by employees, although they have encouraged the participation of the stewards. The employers similarly have not discouraged union participation but rather the contrary. (2) The second step has required discussion between local Standing Committees of the unions and of management composed of three members each. (3) The third step has provided for presentation of the case by the union to the mill manager. (4) The fourth step has been reference to the international union and a top official while mills with the less favorably priced products, the less efficient operations, and located in lower wage labor markets would have paid lower wages, and thus they benefited the least from wage standardization, and the union locals in those plants benefited the most, as compared with region-wide standardization. Further, companies with several diversified mills, which otherwise might have had to pay wages in part based on the over-all ability of the company, were protected under region-wide bargaining by the lower capacity of firms with single and relatively marginal mills. Rupert Maclaurin, "Wages and Profits in the Paper Industry," Quarterly Journal of Economics, February 1944. Unionization, also, was not as widespread in the East, but union mills there did have wage cuts.

[20]

of the particular company. (5) If not settled at this level, it has been sent to the Joint Relations Board. This board has been composed of four union and four management members. They have been selected respectively by the Employees' Association and the Manufacturers' Association. (6) If they have not been able to agree, provision has been made for the addition of an impartial member to cast the deciding vote. The system has worked very well. Although a number of minor grievances have arisen, these have been processed expeditiously. No step is supposed to take more than five days, although delays have occurred. The mill manager, under a recent agreement, must give an answer within eight working hours. Most grievances have been settled at early levels. Only 13 cases have gone to the Joint Relations Board since 1934, and 11 of them have been settled by unanimous action. In only two cases has an arbitrator been required. No strikes or lockouts have occurred at any time over grievances. This grievance machinery has met the standard tests of adequacy. It has conformed to the primary precept advanced by Golden and Ruttenberg that "grievances should be settled speedily and as near their point of origin as possible"27 and to the more detailed recommendations of the President's Labor-Management Conference of 1945.28 An advisory safety committee has met monthly at each mill. Disagreements have been processed through the grievance machinery. The contract has also provided machinery for joint job analysis and evaluation since 1934. A Joint Job Analysis Committee has reviewed 1500 specific jobs. Heaviest weight has been given to the factor of responsibility.28 Four of the nine factors used have related to some form of responsibility. Many of the jobs involve tending expensive machines or supervising the processing of expensive raw materials. As mechanization has increased, the formula has permitted higher individual job rates. Furthermore, since responsibility is not a very precisely defined factor, the heavy weighting given it has permitted considerable flexibility in the system. ^Golden and Ruttenberg, op. cit., p. 91. 28 U. S. Department of Labor, Division of Labor Standards, The President'» National LaborMwnagement Conference, November 5-30, 191f5 (Bulletin No. 77), 1946. " J . M. Tedford, Industrial Job Analysis, Pacific Coaat Association of Pulp and Paper Manufacturers, 1946.

[21]

The wage system, however, has been only partially reviewed, and changes in recent years have been based mostly on the introduction of new methods or new machines.30 The union members apparently have not been as satisfied with the job evaluation system as union leadership and management, partly because of lack of understanding of its complexities. In an effort to secure a better understanding of job analysis, the unions and management recently sponsored a training course attended by delegates from each of the locals. It likewise has been required, as a recent procedural change, that job analysts shall work right at the job being studied, explaining the method as they go along. Job evaluation has been viewed by both parties as an imperfect but relatively consistent yardstick to apply against all jobs, and as an aid in reducing grievances and disputes through use of an agreed-upon frame of reference, not as a scientific system.31 Extension of piece-rates, largely under the Bedaux system, was prohibited by the 1934 agreement upon union insistence, and piece-rates were in general abolished by the 1937 agreement. Thus a potential source of disagreement was eliminated. The job analysis and evaluation system has brought considerable standardization of job rates among all the mills covered. Regardless of locality, the same rate, no more and no less, is customarily paid for the same job.32 The employers have had a Permanent Classification Committee which has been the interpreting and enforcing body for the manufacturers. Even under the pressure 30

In 1947, 1475 jobs had been a n a l y z e d ; 130 were paid " t e m p o r a r y r a t e s " ; and 1960 jobs had n o t yet been jointly analyzed- In 1941 the employers offered a complete review of all jobs, which would have raised average r a t e s by a couple of cents. B u t serme rates, particularly of skilled workers in locals in t h e S t a t e of Washington, where t h e greatest difficulties existed anyway, would have been reduced and the unions refused the offer. Most changes since then have been on new or revised jobs. Maintenance mechanics' jobs have been exempted f r o m t h e job evaluation system and their rates have followed c r a f t r a t e s in t h e area, regardless of w h a t t h e job evaluation system would have required. F o r a general discussion of job evaluation in the industry see Willard S. Smith, History and Analysis of Joint Job Analysis in the Pulp and Paper Industry of the Pacific Coast, Unpublished Master of A r t s Thesis, Princeton University, 1948. 81 Even then t h e system has proved to be too highly formalized a t times. I n one mill t h e introduction of a l a r g e r overhead c r a n e resulted in a réévaluation of t h e c r a n e operator's job which b r o u g h t its r a t e 10 cents an hour above the r a t e f o r t h e n e x t higher job in the line of promotion. Subsequently no one wished to t a k e a 10 cent a n hour cut in order to get promoted. More generally, a s t r i k e by t h e Boommen and R a f t e r s Union, a subdivision of t h e I n t e r n a t i o n a l Woodworkers of America ( C.I.O. ) , resulted in w h a t amounted to 8' hours' p a y f o r 6 hours' work in some log ponds. P u l p mill boommen, who sometimes work in the same ponds, could n o t be given as high a r a t e without violating t h e t e r m s of t h e job evaluation system. They have felt, however, t h a t an obvious inequity has developed. 82 E a c h mill has its own s e p a r a t e j o b ; b u t all jobs a r e supposed to be evaluated on t h e s a m e basis. Some historically over-evaluated r a t e s exist—about 100 in 1947—which have exceeded evaluation rales by 1 to 25 cents p e r hour. Generally, however, t h e principle of equal p a y f o r equal work and p r o p o r t i o n a t e pay for p r o p o r t i o n a t e work has been followed on a coast-wide basis.

[22]

of labor scarcity during World War II, uniformity was maintained. Uniformity of rates has reduced the number of grievances which otherwise would have arisen as employees made comparisons among unequal rates. The Permanent Classification Committee in more recent years has issued interpretations of the contract in general.33 These have been very explicit and have aided the employers in uniform application of the contract. Informal checking on important cases apparently has also kept the employers in line with each other. A full-time staff employee of the Manufacturers' Association recently also has coordinated policy. As a result the Manufacturers' Association has increasingly administered the contract both as to wage rates and non-wage provisions. It has been an administrative as well as a negotiating association. 7. Disruptive Elements

The multi-employer system of collective bargaining in the West Coast pulp and paper industry has on occasion been threatened with disruption or collapse. These threats have come from within management and within labor. In fact, the severest crises between management and labor have emanated from stresses felt within one group or the other. The internal pressure on the employer side has been primarily economic ; on the union side primarily political. The contract at all times has made provision for standard wages and conditions. Both groups have favored, even insisted upon uniformity. The basic conditions, however, have not been uniform. The application of the common rule to uncommon situations has been the major source of disturbance. The contrasting circumstances in Washington and Southern California have illustrated this point. The mills in the former area have often been the more profitable and labor has been a relatively smaller element of cost. Community wage rates have been high. The C.I.O. has been an active competitor of the A.F. of L. unions. All these factors have argued for favorable wage rates and other terms of employment. In Southern California profits often have been lower and labor has been a relatively greater element in total cost. Area wage rates have been comparatively low. Rival unions have not been so active in the field. These conditions have argued for less 83

T h e unions have had the r i g h t to protect these i n t e r p r e t a t i o n s through t h e grievance machinery.

[23]

favorable wage rates and other contractual provisions. If the over-all level of contractual provisions has been too low, the unions have been under political pressure in Washington. If the over-all level has been too high, the employers have been under economic pressure in Southern California. It has been precisely in these areas that trouble has arisen for the unions and the employers. Economic pressures. The California mills are primarily engaged in paper products converting. The Washington mills specialize more in making pulp. While the profit positions of individual mills and individual segments of the industry vary over a period of time, the pulp mills have often been quite profitable while the paper converting plants were not. The Manufacturers' Association at the same time has not been able to bargain solely on the basis of the requirements of the economically weakest mills. This has meant that from time to time the California mills have been almost literally dragged up to Northwest levels. The Manufacturers' Association has taken steps to meet this problem. It has kept in mind during negotiations the economic positions of all mills. It has had to resort to persuasion as well. When one mill threatened to withdraw, it was pointed out that if a strike ensued in the Northwest because of low rates, the source of supply of pulp for Southern California would effectively be shut off and mills there would also have to be closed. Good industrial relations in the Northwest were the key to production in Los Angeles.34 Further, the association has sought greater homogeneity of membership to facilitate cohesion. The disparity between the paper products converters and the pulp makers was the root of the difficulty. Several years ago a ban was placed on the admission of any new paper products converting firms, and membership limited to pulp and primary paper manufacturers. The remaining paper products converting mills in the association entered before the ban was effective and have been branches of companies engaged in pulp and primary paper manufacturing. The virtual universality of membership in employers' associations on the Pacific Coast helped make it seem the natural thing to belong to the Manufacturers' Association. Had employers' associations been less com34

Other techniques, through control of much of the pulp supply f o r p a p e r converting and through price leadership, were available, but evidently not used.

[24]

planta

mon or more under attack, it would have been more difficult to hold the Manufacturers' Association together. Once having committed itself prior to a bargaining session, each company has had to accept majority decisions in negotiating contracts and determinations of the Joint Relations Board in interpreting the contracts. Uniform wages have been set and the Permanent Classification Committee has informed it on how to apply the contract. Essential sovereignty in industrial relations has been given to the association. Through these devices the employers have been held together. No employers have ever withdrawn from the association. Nor have any gone bankrupt. The pressures arising from a severe depression have not yet, however, been experienced, although the recession of 1937-38 was weathered.35 Political pressures. The unions have been under attack principally on two occasions. The Washington locals have been more subject to dissident actions than elsewhere. As noted above, the mills there have been frequently more profitable and the surrounding wage rates higher. Several mills have been located in lumbering communities, such as Bellingham, Everett, Hoquiam, and Longview. The cost of living has been higher than in Los Angeles, so that real wage rates have been lower. Some of the mills have been newer and the labor force less stable. The C.I.O. has been the dominant rival labor group in the area chiefly through the organizing efforts of the International Woodworkers of America and the influence of the International Longshoremen's and Warehousemen's Union. The greatest criticisms of the A.F. of L. pulp and paper unions and their leaders and of new contract terms have come from locals in these towns. While bound by the coast-wide majority vote, some of these locals have voted against acceptance of several of the annual agreements. In Everett in 1940, one local, in protest against the size of the wage increase negotiated, affiliated with the I.W.A. (C.I.O.). After reorganization of the local by the international union, the A.F. of L. won a National Labor Relations Board election by a very narrow margin. Three others locals in Washington withdrew from the ^ L e s t e r and Robie n o t e : "Regional bargaining in pulp and paper on the W e s t Coast has yet to meet the test of a wage reduction. Marked differences in financial conditions between mills and a more favorable wage situation in lumber would make such a test a severe one f o r coastwide bargaining and wage uniformity in pulp and p a p e r . " ( R . A. L e s t e r and E . A. Robie, Wages Under National and Regional Collective Bargaining, Industrial Relations Section, Princeton University, 1946, p. 88.)

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Employees' Association that year, but later reaffiliated. In Hoquiam in 1943, a majority of the A. F. of L. members affiliated with the I.W.A. and called a strike for separate recognition. The National Labor Relations Board held, however, that a single plant was not an appropriate bargaining unit and refused to order an election. The National War Labor Board ordered the men to return to work, and discipline was restored in the local, partly through expulsion of several leaders of the C.I.O. faction in accordance with the maintenance-of-membership clause. The unions have taken positive steps to retain unity. They have watched wage rates and conditions in lumber and other related industries. They have had the power to expel or reorganize recalcitrant locals and have done so on occasion. In accordance with the maintenance-of-membership provision of the contract, they have the right to cause the discharge of employees organizing for rival unions and have exercised it. The international officers have refused to approve any other contract for locals withdrawing from the Employees' Association than the uniform labor agreement, or the calling of strikes and use of strike funds to obtain more favorable terms. The Manufacturers' Association has bolstered this action by refusing to bargain with individual locals. By these methods the unions have been held together despite the disuniting forces. The more diverse the circumstances covered by multi-employer bargaining, the greater is the opportunity for collapse of the system. If the powers of enforcement held by the respective parties are not adequate to the task, breakdown is invited. In the pulp and paper industry the pressures have not been so great but that the disciplinary measures available to the parties have been sufficient. Had one or the other of the parties had no devices to encourage unity, or had either party wished to take advantage of dissension to weaken the other, then the system might not have remained intact. Fortunately each party desired the other to remain strong and united, and refrained from efforts to encourage division for the sake of conquest. The parties have had to steer a careful course between making labor costs too high for certain employers or contract terms too low for certain union locals to accept. Between the industry's upper limits and the union's lower limits, the bargaining range has several times been quite narrow. [26]

It has taken skill and patience to find a peaceful settlement within this narrow range. 8. Instrument of Industrial Peace One of the major issues in industrial relations has been the controversy over industry-wide bargaining. Is it an instrument of industrial peace or of industrial w a r f a r e ? Does it serve any useful purpose or is it a malignant growth? In the pulp and paper industry it has been an instrument of peace. The form of bargaining has not been the only factor aiding the development of good relations, but it has contributed in several major ways. Standardization. Standardization of wages and other conditions has removed an important source of controversy. Workers generally judge how well off they are, not on any absolute basis, but by comparison. They know whether they are relatively well off or not. The more frequent the contact and the more obvious the difference, the greater the sense of grievance. Contacts, by degree of impact, may be ranged as follows: (1) intra-plant, (2) intraindustry, and (3) inter-industry. The comparison with the man at the next bench is the one most constantly made and any discrepancies in pay or conditions the most easily discerned. Comparison with other workers in the same industry is the next most persistent. They do the same work on the same product. Comparisons outside the industry, except for c r a f t workers, are more difficult to make on a job-to-job basis. It is a widely held doctrine of equity that persons in equal situations should be treated equally. The test of equality of treatment is particularly applied within the same plant and the same industry. When hours or holidays or vacations or base rates are different, a sense of grievance, rightly or wrongly, develops. Standardization of contractual terms and of wage rates within the pulp and paper industry has contributed to a sense of equitable treatment. The region-wide job evaluation plan has generally assured the same pay for the same job, and facilitated the determination of proportionate pay for proportionate work. Contract terms covering hours, vacations, seniority, and so forth have identically applied to all employees in the coast-wide bargaining unit. The small number of grievances and their expeditious settlement without resort to arbitration may be ascribed in part to standardization. It is interesting to note that in the lumber in[27]

dustry one of the recurring sources of bitter controversy has been the differences in rates of pay and other conditions, originally from mill to mill, and more recently from district to district. Security. Security has also been increased by multi-employer bargaining. The original acceptance of the coast-wide agreement by the employers connoted unqualified acceptance of the union and of collective bargaining. The coast-wide bargaining unit has been particularly immune to attacks by rival unions. The two chief attacks have had some success in individual plants but never within the entire unit. The leadership has also been made somewhat more secure through the difficulty that rival leaders would have, were they to arise, in gaining support over the large territory involved. This sense of security has permitted the unions and their leaders to be less combative in their approach to the employers and more responsible in their actions generally than if they had been under constant threat of attack and fighting for survival. The industry similarly has been more secure. No single employer has been subject to being picked off by the unions. The employers have been certain that each of them was confronted with the same wage structure and other contractual terms. None of them could voluntarily pay more to get an edge in competition for labor, or pay less in the hope of reducing costs. No one firm, by ill-chosen policies, could start friction with the union and spoil the relationships. Wage payments and contract administration have been carefully surveyed by the Permanent Classification Committee. As a result, each firm has been secure in the knowledge that its position was not being undermined in the area of industrial relations by the conduct of some other firm. While individual firms, at least temporarily, might have benefited by departing from the common rule, the industry as a whole would have been made less secure. Cost of conflict. The cost of conflict has been increased. No small strikes have been possible. Any strike would affect the entire coast simultaneously. Both sides are well organized and a real test of strength might be quite prolonged. Rather than undertake such widespread and drawn-out warfare, the parties have preferred to find mutually satisfactory agreements short of the strike or the lockout. Industrial relations might have been peaceful with plant-byplant bargaining. The unions were capably led, as were the several [28]

firms. The personnel policies of the companies were admirably chosen. The workers were stable and relatively well satisfied with their treatment at the hands of management. Other conditions existed conducive to good relations. Without multi-employer bargaining, however, the record of no authorized strikes, few serious grievances, and high morale might not have been attained. It is almost certain that the C.I.O. would have captured several mills and introduced rival unionism. These mills would have been the generally most profitable pulp mills in the State of Washington. If higher rates had been obtained for them, the A.F. of L. would have had to t r y to secure such higher rates also for the sake of its existence. This might have required strikes against some of the least profitable mills. Or the unions might have chosen "whipsaw" tactics against individual employers in an effort to get better conditions, with a resulting deterioration of relationships. Or, in the absence of standardization, many more grievances could have arisen with a cumulative effect on employee morale. Individual companies might have fought each other in the upswing to get scarce labor, or in the downswing to cut costs by reducing wages or other contractual provisions. Out of any or all of these developments, with smaller strikes costing less, the record might have been spoiled. 36 Potentialities for warfare. Multi-employer bargaining could, however, have caused warfare or aggravated it. Had relations, for other reasons, such as ideological incompatibility, been basically bad, multi-employer bargaining might merely have led to bigger and longer strikes. The parties would have confronted each other not in skirmishes but in full-scale combat. Or if some of the firms had bad relations these might have marred the situation. Had such firms held a veto power, they could have controlled events. Furthermore, it is often the extremists who are the most active members of employers' associations, more vehement and more of a threat to the paid personnel of the association than the moderates, just as on the union side. When extremists get control of both sides of the table, ideological warfare which might otherwise be limited M

J . D. Zellerbach has w r i t t e n : " D u r i n g the p a s t 14 years not a single day's interruption of work has been experienced by any p a p e r mill on the Pacific Coast because of a dispute between a mill and its employees. Industry-wide collective b a r g a i n i n g on a regional basis and unique methods of contract negotiations and execution a r e t h e basic reasons f o r this. . . . While industry-wide b a r g a i n i n g may or m a y not be desirable in other industries, it has demonstrated its value in several ways in so f a r as t h e Pacific Coast p a p e r industry is concerned. Both t o the employer and t h e employee there a r e long-range advantages in uniformity of wages, working conditions and regular machinery f o r contract execution in a large industry a r e a . " ( " N o Work Stoppage in 14 Years," CED Digest, April 1947.)

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to a segment of the industry becomes, under multi-employer bargaining, much more widespread. The employers' association may be something quite different from the sum of the employers that constitute its membership. To the paid executive of the employers' association, or the attorney who handles its affairs, conflict with the union may mean a bigger staff or greater revenue. The cost of warfare, at the same time, is borne by the individual employer and not by the association viewed as an institution staffed by paid personnel. Conflict, in such a case, may pay those who decide in its favor. Moreover, it is sometimes easier for staff representatives to say "no" than "yes." It involves less assumption of responsibility. The absence of faceto-face dealings between the principals may also encourage combative attitudes as reports are relayed back and forth without the opportunity for personal reconciliation. The greater the separation between the employers themselves and the association, the greater the chance that these developments will occur, although they are by no means a certainty. An independent paid staff, for example, may contribute an unemotional approach to problems and thus add to the prospects of peace. None of these unfavorable potentialities for warfare have developed. The relations between the parties have been basically good. The moderates in the employers' association, partly through the device of majority rule, at all times have kept control. The employers themselves have managed their association completely, and the very top executives have participated in the annual collective bargaining sessions.37 "Lawyers are barred." 88 One employer put it: "We have no gladiators for management in our collective bargaining. The principals who can make decisions and valid commitments run the show." The determination of industrial relations policies has not been delegated to subordinates or to an independent agency. The unions also have had their "principals" there—the representatives from the local mills, men who would bear the cost of a strike. Region-wide bargaining has been on a sufficiently high level, also, so that it has attracted the presence of the very top 87

" I t is a m a t t e r of firm policy t h a t each company is represented by its executive head or a responsible official empowered to m a k e binding decisions then and there." ( J . D. Zellerbach. " W h a t Does Labor Really W a n t , " American Magasine, May 1947.) 38 R. D. Wolf, "Practical Manacrement-Labor Cooperation," Industrial Relatione in a DefemM Economy, American M a n a g e m e n t Association, Personnel Series N u m b e r 48, 1941.

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officials of the companies and of the international unions, the men with the greatest experience, breadth of view, and skill. It has resulted in effective influence being brought to bear on the bargaining relationship by the highest levels of the two sides. Nor have the parties jointly turned to collusive action against the consumer. The industry has been prosperous and attention has been paid to the necessities of the marginal firms. 9. Summary 1. The pulp and paper industry has followed the general West Coast pattern of multi-employer bargaining, which has largely resulted from the conjunction of aggressive unionism and mediumsized and small employers. The general acceptance of this type of bargaining in the region aided its acceptance and perpetuation in the pulp and paper industry. 2. No strikes have occurred and relatively few serious grievances arisen in the pulp and paper industry since 1934 under this system of bargaining. 3. Both the employers and the unions have gained. The employers have been protected from irresponsible actions by their fellow employers. The unions have been made more secure from attacks by rival unions. 4. The goldfish bowl has helped reconcile the parties and the divergent elements within each side. The real threats to peace have shown themselves first within each party, and the internal conflicts have needed to be settled as a prerequisite to resolution of disputes between the parties. The goldfish bowl has, in particular, made peaceful conduct by the union leadership more possible by short-circuiting the criticism that a peaceful bargain is not the best bargain that could have been obtained. It has also served an important educational function. 5. Wages have been set largely by reference to those paid in lumber and to craft workers in other industries, from which two sources have come the greatest pressures on union policy. The industry generally has been sufficiently profitable to be able to give recognition to these comparisons. Region-wide bargaining has made reference to certain standard criteria of wage determination more difficult, such as ability to pay and "going rates" in the industry. [31]

6. The contract has been administered through an effective grievance machinery. The employers' association has kept careful watch over wage payments and contract interpretations by individual managements. The contract essentially has belonged to the association rather than the individual employer. A coast-wide job evaluation plan has standardized wage rates. 7. Disruption has been threatened by the heterogeneity of interests within the unions and within the Manufacturers' Association, but neither side has sought to divide the other and each has taken adequate steps to preserve cohesion. 8. Multi-employer bargaining has aided peace in at least three ways, (a) Standardization has reduced grievances, (b) Security has been increased for both sides and thus has enabled both to bargain in a more reasonable way. (c) The cost of conflict has been so increased as to discourage resort to it. 9. Multi-employer bargaining can potentially increase warfare. It has not in this industry because: (a) Basic relations have been good, (b) The moderates have held control on both sides, (c) The employers have operated their association and dealt directly with the unions. 10. Joint collusion against the consumer has not developed ; 39 nor in its absence have prices for other reasons been higher than on the East Coast where multi-employer bargaining does not exist.40 11. The marginal firms, at the same time, have not been driven out of business, partly because the industry has been generally profitable and expanding, and the parties have surveyed basic economic conditions during the bargaining process. 12. This successful system demonstrates some of the conditions under which and some of the ways in which multi-employer bargaining can make a contribution to industrial peace without domination by either side or joint collusion against the consumer. w

While unilateral efforts t o control competition have been undertaken in t h e i n d u s t r y regionally and nationally by employers, "effective r e s t r a i n t of competition has not exieted f o r any length of time in any b r a n c h of t h e p a p e r industry." (Guthrie, op. cit.) T h e s a n e conclusion, a p p a r e n t l y , also holds f o r t h e pulp industry. " P r i c e s at t h e wholesale level were compared over t h e period 1989 to 1948 f o r n e w s p r i n t and k r a f t - w r a p p i n g p a p e r — t w o i m p o r t a n t a n d s t a n d a r d Items—for N e w York and S a n Francisco. They w e r e identical or virtually identical a t all times d u r i n g this period. A spot comparison of prices f o r facial tissue showed t h e m t o be about t h e s a m e in t h e t w o cities.

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