NYT: Worthy Goal of Flawed Bill: Aiding Unions

[Omaha Steve]

http://www.nytimes.com/2007/06/27/business/27leonhardt.html?_r=1&oref=slogin

Worthy Goal of Flawed Bill: Aiding Unions

By DAVID LEONHARDT
Published: June 27, 2007

In the spring of 1949, the men who ran the steelworkers’ union decided to pick a fight over health insurance and pensions.

The Supreme Court had issued an order in April of that year giving labor unions the right to negotiate over pensions, just as they could negotiate over wages and work rules. Three weeks later, the United Steelworkers union said it was ready to strike if steel companies did not agree to new contracts.

At first, steel executives put up a united front. They agreed to contribute some money to pensions, as well as health insurance, but not nearly as much as the workers were demanding. “The truth of the matter is that American industry alone cannot afford to pay the cost of adequate insurance and pension programs for employees,” Irving S. Olds, the chairman of United States Steel, said in a speech in Erie, Pa.



President Harry S. Truman persuaded the union to delay the strike three times, but on the first day of October — in a move that is hard to imagine today — 500,000 steelworkers walked off the job. The Ford Motor Company soon had to announce that it would shut down production by Nov. 15 because of a lack of steel. General Motors, Chrysler and other big manufacturers found themselves in a similar position.

And just like that, the steel industry caved. One by one, steel companies began agreeing in early November to much of what the union had demanded: annual pensions of at least $10,000 (in today’s dollars) for any retiree with 25 years or more on the job, as well as health insurance for workers.

The strike proved to be a turning point for health benefits and pensions. They had existed in limited form for decades, but the new steel contracts helped lay the groundwork for the modern system of workplace benefits.

FULL story at link.