We shall proceed on the assumption that reference was intended to be made to the 88.9-percent figure rather than the "over 90 percent" figure in the Secretary's statement. We understand that in the fiscal year 1947 the United States Conciliation Service, for record purposes, treated every dispute which came to its attention and was assigned to a Commissioner as a "case" excepting, perhaps, an unascertained number of disputes from which Commissioners withdrew. Further, it appears that the departmental Service was not limited or restricted in any way as to the size or kind of labor dispute in which it intervened during the fiscal year 1947. Many of them were minor grievance disputes or contract disputes which did not significantly affect interstate commerce. Presumably the 88.9-percent figure and the "over 90 percent" figure include in the computation a large proportion of such cases. The present Service keeps its records on the basis of active, "consultation" or 'stand-by" cases. We do not consider it desirable to make any representations here with respect to our performance with respect to any but the active cases in which Commissioners of the Federal Mediation and Conciliation Service personally participated in the negotiations. Moreover, an analysis of Federal Mediation and Conciliation Service cases includes grievance cases when, as expressed by the applicable statute, they were cases of last resort or exceptional in character. By statute and declared administrative policy the Service was admonished not to attempt to settle run-of-the-mill grievances. Statute and policy also kept it out of disputes in which the effect on commerce was not substantial. Although the departmental Service received "strike notices" under the War Labor Disputes Act only 48.3 percent of total cases closed by that Service December 1946 through June 1947 were brought to its notice through that device. For a similar period (December 1947 through June 1948) 71.2 percent 3 of total cases closed by the Federal Mediation and Conciliation Service were brought to its attention through the 30-day notice required to be filed under section 8 (d) of the Labor-Management Relations Act, 1947, by either party desiring to terminate or modify an agreement. Thus, as a matter of compulsory statutory procedure the Federal Mediation and Conciliation Service was almost always alerted concerning a labor dispute in advance of a stoppage; in a large number of cases the departmental Service came into a dispute after the stoppage had occurred. These cases are specifically excluded from the 88.9 percent figure mentioned in the annual report of the former Secretary and the "over 90 percent" figure mentioned by the present Secretary. The Federal Mediation and Conciliation Service computation includes all cases in which there was active participation by a Commissioner. With these explanations made, it is appropriate to proceed to state the performance of the Federal Mediation and Conciliation Service in terms most comparable to the figures of the departmental Service. During the last 10 months of the fiscal year 1948 the Federal Mediation and Conciliation Service closed 5,045 active cases. Of this number 4,735 did not involve a work stoppage at the time of intercession; 4,228 cases of the 4,735, or 89.3 percent, were settled without a work stoppage occurring after the Commissioner interceded. 3. Having made the comparison stated above, it is most important to observe that the Federal Mediation and Conciliation Service cannot, in good faith, and will not take credit for the 89.3 percent settlement, without work stoppage, of active cases. In addition to what has been said under "1" above, as to the factors which bring about settlement it is necessary to point out most carefully that the "settlement" of a dispute, even when a commissioner has actively worked with the parties, does not mean, necessarily, that he has brought it about. This assumption denies credit to the exertions of union and employer negotiators which frequently contribute much more to the settlement than the most earnest ministrations of the mediator. The closest analogy is in the field of medical practice. A family doctor who prescribes pills, medicines, and treatments for his patient may feel relieved and comforted when he recovers from a common cold or other ailment; he never knows how much credit should be given to natural processes, the resil 2 An "active" case is one on which a Commissioner actually exerts his engergies through personal services; a "consultation" case is one in which he offers advice but does not actually participate in negotiations; a stand-by case is one in which the jurisdiction and responsibility of the Service is noted, but the course of negotiations do not require it to intercede. See first annual report of the Federal Mediation and Conciliation Service, pp. 29, 30. 3 In the last 4 months of 1948 this figure rose to 88 percent. iency of the human body and its inherent power to combat illness by internal adjustments. Doctors no longer make statistical claims for recoveries in such cases which ignore the role played by other factors; mediation services are learning a similar forbearance and restraint. We are saying here that success in mediation is not susceptible of quantitative measurement. The contribution of a mediator is a most elusive factor in a dispute settlement. The mediator lubricates the gears of negotiation, and, in some cases, can do much valuable work with the parties; sometimes his mere nonparticipating presence is of some value; sometimes, despite the best will in the world, he is unable to make any contribution whatever. This is not to demean the function and process of conciliation and mediation. Its value in those disputes in which a contribution can be made by a commissioner is great; there would be no difficulty in securing the testimony of a legion of employer and union negotiators that mediation is important and the governmental agency engaged in mediation should ever strive to increase its efficiency. In conclusion, on this point we observe, that the figures, if they mean anything, are favorable to the Federal Mediation and Conciliation Service. The Federal Mediation and Conciliation Service figures disclose "success" in mediation at a slightly higher percentage than do those of the departmental service. The Federal Mediation and Conciliation Service, however, deplores the employment of this statistical method as a means of appraising and evaluating the comparative efficiency and effectiveness of two mediation agencies, or, for that matter, of any mediation agency. Appraisal requires a broader basis of judgment. No claim is made here for the efficiency and value of the operations of the service other than its reputation among the unions and employers to whom it has made its facilities available. 4. We come now to the relative acceptability, to the parties, of the departmental and the independent Service, respectively. How is this to be measured and judged? Statistics is a science which has great national respect, notwithstanding a current and, perhaps, a temporary lack of confidence in political polls. We turn naturally to figures to enlighten our understanding or to fortify our predilections and prejudices. But here again we find that the subject matter does not lend itself to statistical proof. Figures are available, but so many reservations must be made with respect to their use and so many disparate conditions existed when they were collected, that their value is nil. An analysis of the cases in which the former Service interceded upon the request of one or both parties, and which were closed during the period, December 1946 through June 1947 reveals that 9.8 percent of the requests came from employers. A similar analysis for the new Service for the period December 1947 through June 1948 reveals that 14.5 percent of the requests came from employers. In other words, the greater proportion of requests come from employers now under the new Service than formerly under the departmental Service. We shall not burden this memorandum with an elaboration of all of the reasons why this increase is wholly without significance in an effort to ascertain whether the present Service is or is not more acceptable to employers; but we shall mention a few. During the cited period of the administration of the departmental Service, the War Labor Disputes Act required unions to file notices if they intended to strike.. Most unions filed such notices as a matter of course. There was no provision for employer notices. An employer seeking mediation was obliged to resort to the method of "request." Hence, it was natural that a relatively large percentage of the total case assigned derived from requests for mediation from employers. Under the Labor-Management Relations Act, however, either party desiring to modify or terminate an existing contract was required to give a 30-day notice to the Federal Mediation and Conciliation Service (sec. 8 (d)). These statutory and automatic notices, to the extent of 71.2 percent of all active cases closed (88 percent for the last 4 months of 1948) largely supplanted "requests." Hence in looking at "requests" as a measure of the degree of employer acceptability we can concern ourselves only with the relatively small base of 28.8 percent of active cases. This may be too small a base to warrant drawing any conclusion. Assuming, however, that this base is not too narrow, we must consider what it is that prompts a request. The period December 1947 through June 1948 was one of a high level of production, employment and wages. In the typical dispute it was the union which had third-round demands to make on management. Employers infrequently filed notices of demands to change a contract, excepting. for tactical reasons. Under these circumstances, clearly, it would not be appropriate to draw any conclusion respecting acceptability from the "request" figures available. On this subject the Service stands on the presentation of the Director in his statement to the committee on February 1. Commissioners find that employer doors closed to them while they were in the departmental service became ajar when they held themselves out as representatives of an independent agency. Many employers do not regard Department of Labor top officials as impartial in management-labor disputes, and will not confide in them or their subordinates as they do in commissioners of the independent Service. The possible reasons given for this attitude are contained in the Director's statement. Whether the attitude of these employers is justified or not is beside the point and the Service should not be understood to impeach the impartiality of the Secretary of Labor of his departmental staff. It is not impartiality, but an unquestioned and broadly accepted reputation for impartiality that is indispensable to effective mediation. It is for this reason that it is regarded as best, in furtherance of the public interest in the peaceful settlement of labor disputes, that mediation be performed by an agency whose activities and functions encourage rather than raise questions as to unions and employers extending to it their complete trust and confidence. This can only be done by an agency independent of the Department of Labor and any other department which might be charged, rightly or wrongly, with representation of the economic groups in dispute. The CHAIRMAN. Senator Aiken. Senator AIKEN. Mr. Chairman, Senator Douglas asked my questions, but he did bring up the interesting question as to whether a quasi-judicial body can be put under a department for housekeeping purposes only. I think Mr. Ching effectively answered that. I want to say, after a good many months of study on that subject, that I, for one, have come to the conclusion that you cannot put a regulatory agency under a department even for housekeeping purposes without having it influenced by the department which is the housekeeper. I was about to ask, Mr. Ching, as to the effectiveness of the Mediation Board during the past 2 years, whether you have any record of the percentage of cases in which a settlement has been obtained, a record of the total number of cases which you have had come under your consideration, and whether you have been able to keep up with the work or have fallen behind. Is there any comparison with the years when the Mediation Board was not an independent agency? Mr. CHING. We have. I do not have with me any statistical records. Any statistics on this subject you would have to discount to some extent because of the difference in situations. Senator AIKEN. That is right. Mr. CHING. The difference that exists in situations. However, that is another thing that I would be very happy to submit in a memorandum on to the committee, on the statistics, and the comparison of statistics between this year, and going back historically. Senator AIKEN. In other words, has a settlement been effected in 85 percent of the cases without either party resorting to strikes or lockouts. Mr. CHING. I shall be happy to give you all the statistics I can. Unfortunately, for reasons I can explain, they will not show much on the comparative efficiency in mediation of the old Service and the present Service. We are talking about a matter not susceptible to statistical measurement. Senator AIKEN. And have you any record of how frequently the services of the board have been in demand by either party? Mr. CHING. Yes; we have that. Senator AIKEN. Can you give us any figures? Mr. CHING. We will give you those statistics, too; yes. Senator AIKEN. Do you know how they compare with previous years? Of course, I think, we realize that the last 2 years have been unusual years in that Mr. CHING. We will give you what we can. Senator AIKEN. In that labor was a seller's market, you might say. (The material prepared pursuant to the foregoing colloquy was submitted by Mr. Ching as follows:) FEDERAL MEDIATION AND CONCILIATION SERVICE-WOULD TRANSFER TO THE DEPARTMENT OF LABOR RESULT IN ECONOMIES? It is commonly assumed that in business and in government organization, centralization conduces to economy. This is not always true. The Labor-Management Relations Act, 1947 established the Federal Mediation and Conciliation Service as an independent agency in the executive branch. The functions, personnel, and records of the former United States Conciliation Service in the Department of Labor were transferred to the new Service on August 23, 1947. The Service has been asked to comment on the question whether more economical operation would result from the transfer of the present independent Service to the Department of Labor. Presumably, some might believe that economies would result from the utilization of the centralized administrative and staff services of the Department. The proposition may be examined historically and prospectively. 1. COMPARISON OF OPERATING COSTS: FEDERAL MEDIATION AND CONCILIATION SERVICE AND THE FORMER UNITED STATES CONCILIATION SERVICE Because of the change in nature of the functions and organization of the Service as a result of the adoption of the Labor-Management Relations Act, 1947, it is not possible to establish strict comparability between the present and the former Service. Nevertheless it is possible to note a few differences in the matter of operating expenses. Salaries, travel and communication expenses constitute the largest items in the budget of the Service. Let us look at the latter two items first. A. Travel expenses Travel expenses in the former Service averaged as high as $1,680 per year per employee. In its final full year of operation the average per year per employee was $1,015. In the new Service the average for the current fiscal year is about $680 and for the next fiscal year is estimated at about $635 per year per employee. Thus, despite an increase of perhaps 30 percent in the cost of transportation, average travel costs have been reduced in the new Service by at least $380 per person per year. This savings may be attributed in part to the further decentralization of the Service which has resulted in bringing the conciliators closer to the areas in which the work is to be done. The savings may also be attributed in part to the fact that the new Service, under statutory restriction and administrative policy, avoided entering cases affecting commerce to only a minor degree. This cut down the case load and travel of commissioners. Table 1, attached, shows the average costs for travel for a 9-year period. B. Communication expenses In the former Service, communication costs averaged as high as $444 per year per employee. In the final full year of operation the average per year per employee was $176. The average cost per year per employee for communications in the new Service is $161 for the current fiscal year and is estimated at about $155 for the next fiscal year. Thus, despite increases in rates for telephone and telegraph services, there has been a decrease in average communication costs in the new Service. Here again the decrease may be attributed in part, at least, to the further decentralization of the Service and to the fact that the Service under current policy, is refraining from participating in minor cases. Table 2, attached, shows the average costs for communications for a 9-year period. C. Over-all operating costs The major item in the budget of the Service is salaries. In the former Service salaries were established in accordance with the (civil service) Classification Act of 1923 as amended. In the new Service, the Director has the authority (sec. 202b, Public Law 101, 80th Cong.) to appoint and fix the compensation of conciliators and mediators without regard to the civil-service laws and regulations. The Director has elected, however, to follow the same pattern of salary classification as that used by the Civil Service Commission. Employees, other than conciliators and mediators, are, of course, subject to all civil-service laws and regulations. Two actions taken in the past year have had the effect of increasing the salary costs of the Service. First, the Congress passed, on July 1948, the Pay Act of 1948 (Public Law 900, 80th Cong.), which provided for a flat increase of $330 for each employee. Second, the Director of the Federal Mediation and Conciliation Service in June 1948 announced the adoption of a new and uniform classification and salary plan for conciliators and mediators, aimed at enabling the new Service to attract and retain higher caliber personnel. Prior to that time, conciliators and mediators had ranged in grade from CAF-7 to CAF-15, quite often with little or no distinction in the duties performed. Under the new salary plan of the Federal Mediation and Conciliation Service the following grades were established: CAF-11, $5,232 per annum (entrance rate). CAF-12, $6,235.20 per annum (probationary status). CAF-14, $8,509.50 per annum (reserved for outstanding and meritorious Grade CAF-12 is achieved after 1 year of satisfactory performance at the entrance grade; grade CAF-13 is achieved after 1 year of satisfactory performance at the probationary level of CAF-12. Grade CAF-13 is now considered the full professional level. Grade CAF-14 is now held by about 30 out of the total staff of about 220 conciliators and mediators. The net effect of these two actions (the $330 increase to all employees granted by Congress, and the Director's new salary plan for conciliators) has been to increase the average salary costs of the new Service by about $615 per employee per year over the average salary costs of the former Service. Despite this fact, the net increase in over-all expenses (including salaries) will be only $390 per person per year in the fiscal year 1949 and less than $340 per person per year in 1950 as compared to the costs in fiscal year 1947. In other words, the savings in costs other than salaries offsets almost half of the increase in salary costs. If these other savings had not been effected, the increase in over-all costs might easily have amounted to $1,000 or more per person per year. This fact may be seen more readily from table 3, attached, which shows for a 9-year period the average salary cost and the average over-all costs per person per fiscal year. 2. EFFECT OF RETURN OF FMCS TO THE DEPARTMENT OF LABOR From the preceding paragraphs it may be seen that despite the rising cost of living and the general increase in the wage-price level (which, of course, have affected private business and all other Government agencies as well as the Service), the Service has, by improvements in administration, managed to reduce operating costs sufficiently to maintain the over-all costs at a level far below what they would otherwise have been. In fact, it has been possible to restrict the increase in over-all costs (including salaries) to less than the increase in salary costs alone. Where then may further economics be sought? What would be the nature of the economies resulting from the transfer of the Service to the Department of Labor? Certainly not from further improvements in administration; the record of the new Service could hardly be improved upon in that respect. Two other possibilities offer themselves: (1) An over-all reduction in staff; (2) the alleged economy of "centralization" of administrative services. |