The steel strike of 1959 was a 1959 labor union strike by the United Steelworkers of America (USWA) against major steel-making companies[which?] in the United States. The strike occurred over management's demand that the union give up a contract clause which limited management's ability to change the number of workers assigned to a task or to introduce new work rules or machinery which would result in reduced hours or numbers of employees. The strike's effects persuaded President Dwight D. Eisenhower to invoke the back-to-work provisions of the Taft-Hartley Act. The union sued to have the Act declared unconstitutional, but the Supreme Court upheld the law.
The union eventually retained the contract clause and won minimal wage increases. On the other hand, the strike led to significant importation of foreign steel for the first time in U.S. history, which replaced the domestic steel industry in the long run. The strike remained the longest work stoppage in the American steel industry until the steel strike of 1986.
USWA founding president Philip Murray died in November 1952, and David J. McDonald was named acting president by the USWA executive board. Although observers[who?] felt that Murray had intended to push McDonald out of the union, his sudden death left McDonald in a position to take control. In 1953, the USWA executive board named McDonald president.
McDonald emphasized enhanced fringe benefits. The election of Dwight Eisenhower as US president and Republican majorities in the United States Congress (at least from 1952 to 1954) made expansion of social programs unlikely, but Eisenhower indeed would extend many of Roosevelt's programs.
Subsequently, McDonald focused negotiations on benefits such as unemployment compensation, health insurance, pensions, tuition reimbursement and other items. Throughout the 1950s, however, McDonald felt an intense rivalry with the United Auto Workers (UAW). The UAW often won better wage and benefit packages than the Steelworkers and were able to obtain the closed shop. McDonald's negotiating stands often reflected the interunion jealousy.
McDonald led the Steelworkers on strike in 1956, winning substantial wage increases, unemployment benefits, layoff rights, and improved pensions.
Prior to the 1959 strike, the major American steel companies were reporting high profits which led McDonald and Steelworkers general counsel Arthur J. Goldberg to request a major wage increase. Industry negotiators refused to grant a wage increase unless McDonald agreed to a substantial alteration or an elimination of Section 2(b) of the union's national master contract.
Section 2(b) of the steelworkers' contract limited management's ability to change the number of workers assigned to a task or to introduce new work rules or machinery that would result in reduced hours or fewer employees. Management claimed that it helped featherbedding and reduced the competitiveness of the American steel industry.
McDonald characterized management's proposals as an attempt to break the union. Negotiations broke off, and the contract expired on July 1, 1959.
President Eisenhower asked both sides to extend the agreement and resume bargaining. McDonald and Goldberg offered to extend the contract by one year. They also proposed creating a joint committee to study changes to Section 2(b) and to the contract's benefit structure. Steelmakers rejected the offer.
On July 15, 500,000 steelworkers went on strike. The strike shuttered nearly every steel mill in the country. By the end of August, the Department of Defense voiced concern that there would not be enough steel to meet national defense needs in a crisis.
The AFL-CIO quickly began to pressure McDonald to end the strike. Its president, George Meany, was willing to support the strike online if it did not affect national security negatively. The strike was also affecting the automaking industry, which was threatening to lay off tens of thousands of Walter Reuther's members from a steel shortage.
On September 28, 1959, Eisenhower met privately with McDonald and Goldberg and threatened to invoke the back-to-work provisions of the Taft-Hartley Act. McDonald was unwilling to budge on Section 2(b) without other concessions from the steelmakers. The steel companies, realizing that they could wait until Eisenhower forced union members back to work, refused to make any such concessions.
Invocation of Taft-Hartley
Eisenhower set in motion the Taft-Hartley machinery on October 7 and appointed a Board of Inquiry. However, Eisenhower limited the Board's mandate to clarifying the issues rather than recommending a settlement. Realizing that the strike could linger despite the use of the Taft-Hartley provisions, management offered a three-year contract with small improvements in pay and fringe benefits and binding arbitration over Section 2(b). McDonald rejected the offer. He proposed a contract similar to his proposal of early July but reduced the union's wage and benefit demands and limited the contract to two rather than three years. Working from a plan devised by Goldberg, McDonald also proposed a nine-member committee consisting of three members from labor, management, and the public to study and resolve work-rule issues. Management rejected the new proposal.
On October 20, the Department of Justice petitioned the federal district court for western Pennsylvania for a Taft-Hartley injunction ordering the steelworkers back to work. Goldberg argued that the Taft-Hartley Act was unconstitutional, but the district court ruled for the government on October 21. However, the court agreed to a stay of the injunction until the matter was fully settled. The union appealed to the Third Circuit Court of Appeals in Philadelphia and lost again on October 27. The United States Supreme Court granted certiorari and set argument for November 3, 1959.
Settlement with Kaiser Steel
Meanwhile, a budding friendship between Goldberg and Kaiser Steel heir Edgar Kaiser led to an independent settlement between the union and Kaiser Steel on October 26. Although the Steelworkers won only a fractionally higher wage increase than the steelmakers had proposed, the settlement included the nine-member committee, proposed earlier by Goldberg and McDonald.
Defeat in Supreme Court
On November 7, 1959, on the 116th day of the strike, the Supreme Court upheld the appellate court's findings. In Steelworkers v. United States, 361 U.S. 39 (1959), in an 8-1 per curiam decision, the court upheld the constitutionality of the Taft-Hartley Act. The justices affirmed the district court's injunction, ordering the workers back to work for an 80-day cooling-off period.
McDonald reluctantly ordered his members back to work, but productivity slowed from extremely poor relationships between workers and managers. The Taft-Hartley Act required management to make a last offer and for union members to vote on this proposal. Management proposed minimal improvements in wages and benefits and the elimination of Section 2(b). McDonald turned management of the union over to Goldberg to concentrate the legal and bargaining work in one set of hands. Goldberg convinced the leadership of the union to reject the proposal, and the members followed suit.
Rejecting the contract was a dangerous tactic and could have broken the union if not for the support of Vice President Richard Nixon. Nixon planned to run for president in 1960 and offered his services in the hopes of negotiating a settlement, which might win him labor's backing.
The Board of Inquiry, meanwhile, reconvened on November 10 and issued a second report on January 6, 1960. The major issues, the Board said, remained the size of the wage increase and Section 2(b).
In December, Nixon met privately with the steelmakers and cautioned them that the Democratic Congress would soon begin hearings on the steel strike. Neither Republicans nor Democrats would support the steel companies if the strike triggered an election-year recession, and Nixon urged management to accept the terms of the Kaiser Steel settlement. Industry executives agreed to a new contract, similar to the Kaiser Steel settlement, in the last week of December.
On January 15, a new 20-month contract was signed. Section 2(b) was preserved. Workers received a 7-cent an hour pay increase, 4.25 cents an hour lower than the Kaiser Steel settlement and far lower than anything McDonald had demanded. For the first time, however, the union won an automatic cost-of-living wage adjustment and greatly improved pension and health benefits. McDonald trumpeted the settlement as a great victory, compared to what might have happened.
In the long run, the strike devastated the American steel industry. More than 85 percent of U.S. steel production had been shut down for almost four months. Hungry for steel, American industries began importing steel from foreign sources. Steel imports had been negligible prior to 1959. But during the strike, basic U.S. industries found Japanese and Korean steel to be less costly than American steel even after accounting for importation costs. The sudden shift toward imported steel set in motion a series of events, which led to the gradual decline of the American steel industry.
The strike also eventually ended McDonald's tenure as president of the Steelworkers. Eager to avoid a repetition of the 1959 strike, McDonald worked with steel industry executives to widen the mandate of the new nine-member commissions (now known as "Human Relations Committees"). A three-year national steel contract was signed on March 31, 1962. The union agreed not to enforce Section 2(b) and permitted increased automation, with a percentage of the profits from automation going to wage increases. However, union members began to feel McDonald was not protecting their interests.
In 1965, Iorwith Wilbur Abel challenged McDonald for the presidency of the union. The February 9 election was a bitter one. Voting irregularities and challenged ballots delayed a final result until April 30. Abel won by a razor-thin margin of 10,142 votes, out of 600,678 cast.
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