Labor and Employment Policy

Uploaded by NixonFoundation on 04.01.2012

Good morning, and welcome to
another in our series of
Legacy Forums about the
Nixon Administration's ideas and innovations.
I'm Geoff Shepard, and
I'm here on behalf of the
Richard Nixon Foundation, which co-sponsors
these Legacy Forums.
What makes the Nixon Administration so
interesting is that it
marks the beginning of
the foundation of the modern
What happened in the course of the Nixon administration is
that policy making, actual governance,
was drawn from the cabinet
into the Nixon White House itself.
So before the Nixon
administration, the cabinet departments
really ran their own areas, except on giant issues.
But beginning with the administration
and in truth today the policy
is made in the White
House itself, and while
the cabinet departments have input
into policy, they mainly
execute the decisions made within the White House.
How did that come about, has to do with pre-organizations.
First, the revitalization of the
National Security Council with Dr.
Henry Kissinger, where foreign policy
was really made within the White House.
Second, the creation of
the Domestic Council, the counterpart
to the National Security Council under
John Ehrlichman, which did the
same thing on major domestic issues.
And finally the transition of
the old Bureau of the Budget to
the Office of Management and
Budget, which not only
counted the money, but held
departments to objectives and
to accomplishments.
That was under George Shultz.
George Shultz is the first
Director of the Office of Management and Budget.
But before George Schultz
was director, he was
Secretary of Labor.
And what we're going to find, the
topic today, he was
well neigh an ideal
cabinet member.
And the discussion today on
labor and employment issues in
the Nixon administration largely stems
from the innovation and leadership of George Schultz.
We co-sponsor these forums with
the National Archives, and we're thrilled
to be here in McGowan Theater
to talk about this and
to co-sponser with the National Archives.
And my job really is to
introduce the Archivist of the United States, David Ferriero.
David, as you may know, is a librarian.
He was head of the New
York Public Library before taking
over the Archives and before
that was a librarian at both MIT and Duke University.
He's a scholar, he's a
man of great integrity, and it's
a genuine pleasure to be
co-sponsoring these events with him.
Good to see you.
Thank you Geoff.
I want to add my welcomes
to all of you here, to the McGowan theatre at the National Archives.
We're delighted for the second
time in less than
a month to welcome the Nixon
Legacy Forum here to the National Archives.
Over the past two years the
National Archives and the Nixon
Foundation have co-sponsored 15 of
these forums, bringing together Nixon
administration alumni and alumnae
to examine, explore and analyse
particular aspects of the
thirty-seventh president's domestic and foreign policies.
Legacy forums are now planned
throughout 2012, which will
mark First Lady Pat Nixon's
100th birthday on March
16th, and through
2013, which will see President Nixon's centenary
on January 8th.
For many today the Nixon
years, the late '60s and
early '70s, are so near and yet so far.
But as these forums have demonstrated,
many, if not most, of the
problems we are grappling with
in 2011, including the environment,
energy independence, and health care
were first being faced in
their modern aspects beginning in the '60s and '70s.
It is a happy
actuarial fact that there
are still many men and women
who served in the White House
agencies and departments during
those critical years, from 1969 to 1974.
The Archives has
the papers, some 45,
44 million of them
for the Nixon administration, not including
tape recordings and other historic
materials, and those are
available, now and forever,
to citizens and scholars.
But the Foundation has an equally unique historical resource.
The men and women who actually created those papers.
And that is what these forums
do, reunite the papers with the people who wrote them.
The richness of the insight
and analysis that results will
also be available here, and
will increasingly become a central
part of the Nixon administration's
archival record.
Today's forum on the
administration's labor and employment policy
includes three very distinguished participants
and a no less distinguished moderator.
It would be my pleasure to introduce
her and she in turn will introduce them.
Ann Mclaughlin Korologos served President
Reagan as our nation's 19th
Secretary of Labor before then
she had been Undersecretary of
the Interior and Assistant Secretary of the Treasury.
Mrs. Korologos first came to Washington
during the Nixon administration,
in which she served as
Director of the Office of
Public Administration at the Environmental Protection Agency.
Since leaving government services in
1989, Mrs. Korologos has
been President of the Federal
City Council here in Washington,
Chairman of the Aspen Institute,
and Chairman of the Rand Corporation Board of Trustees.
Among the several boards on which
she now serves is the
Ronald Reagan Presidential Foundation.
It 's my pleasure to welcome Ann Korologos.
Thank you David, and good morning all.
We're going to be talking thinking
this morning about the Nixon
administration's labor and employment policies,
a topic that might at
first sound rather esoteric or
even unrepossessing or perhaps
as a Republican president could be a short topic.
But I think you'll find, especially through
the eyes of today's panelists, who
were there at the time, who were
actually present at the creation, so to speak.
It is a surprisingly interesting and
lively topic, and also
surprisingly relevant to
many of the same issues we are
dealing with today and the
same problems we're also facing today.
It's remarkably timely, though our
emphasis is on President Nixon's administration,
one's thoughts may travel to
yesterday or today's newspaper.
With labor and employment issues, as
with so many other domestic issues
in the late 1960s and early
1970s, the Nixon administration
was dealing, for the first
time, with the modern
aspects of the issues that
have remained true, and in
many cases remained intractable
over the last four decades.
As earlier forums have shown,
and as the Archivist has indicated,
this is true with environmental
concerns, energy independence, healthcare,
welfare reform, and many other domestic issues.
The 1960s and 70s
witnessed cataclysmic changes: economic
changes, technological changes and
no less, but entirely unique
to that time, counter-cultural changes
that gave the new and modern
face to many of America's very old problems.
By the time Richard Nixon was
elected in 1968, he
had already been a major player
in American politics for going on a quarter of a century.
He served as congressman,
senator, Vice President, was
candidate for Governor, and served
of course as a prominent public citizen.
He was no stranger to labor concerns or labor issues.
His first assignment in the
House of Representatives in 1947
was to the Education and Labor Committee.
As he later said, he and
another newly elected Democratic congressman,
John F. Kennedy of Massachusetts,
sat like book ends at
the far end of their respective
sides of the education and labor dais.
The Committee and the House
were immediately involved in the
controversial Taft-Hartley Act, which
is still in effect today and still the center of controversy.
During his Vice-Presidency, Nixon had
the opportunity to observe and
work with Eisenhower's respected and
successful Secretary of Labor James Mitchell.
Mitchell, from New Jersey, my
own home state, was a
Democrat who had been
Director of Industrial Personnel at
the Pentagon during World War II.
He also had been an industrial relations
specialist at Macy's and
Bloomingdale's and he was
seen by labor as the
management side of the table.
Labor didn't really trust him.
He was an opponent of discrimination
in employment, he believed in
labor-management cooperation, and he
was concerned about the plight of the migrant workers.
He's often been referred to as
the social conscience of the administration.
An aside,
in 1987 when I was becoming Secretary
of Labor under President Reagan,
I carefully scheduled a
meeting with Lane Kirkland,
who was the head of AFL-CIO.
And in our conversation I asked
him, "Okay, who was the
best Secretary of Labor ever?"
And he said, "Anne, you'll be surprised."
Not knowing at the time,
I suppose, he said, "He
was a Republican: Jim Mitchell,
Labor Secretary under President Eisenhower."
And I said, "Why?" And he
said, "Well, one, he had
the President's ear, and two,
when we were at Bell Harbor for
those annual meetings, he wouldn't
mind coming down the hall
with a bottle of scotch, joining us."
I should add, maybe if you
can put this off the record,
"I can do both," I told Lane Kirkland.
Dick Nixon and Jim Mitchell became close friends.
In fact, Nixon seriously considered
the labor secretary as his
running mate in 1960,
especially after working behind
the scenes mediation at the
behest of President Eisenhower, with
Secretary Mitchell, who played
the public role on some
of the steel strike issues
that were so current at that
time, and I'm sure will be touched on today.
Nixon's personal intervention trying to
help settle that bitter 1959 steel
strike won him considerable, and
in some cases reluctant, respect
from labor, but with the
election of J.F.K. and then
L.B.J., with the arrival
of the New Frontier and the
Great Society, it seemed
that the traditional alliance between
labor and the Democratic Party
was solidly cemented.
Union leadership and union
money lined up behind the Democratic standard bearers.
In 1968, Nixon's opponent, Senator
Hubert Humphrey, launched his
presidential campaign with a
speech at New York City's Labor
Day Parade. The election was
razor thin, and labor's six million
dollars came close to helping
push Humphrey into the White
House. But the forces
that would challenge and replace that
traditional labor - Democratic
alliance were already at work.
And Richard Nixon was there to recognize and encourage them.
And in fact, despite labor's solid
financial support for Humphrey,
some 30% of union members
had actually voted for Nixon.
By January 1969 when
Nixon was sworn in just
down the street from here
at the Capitol, the pent-up
frustrations of four years
of unrestrained spending for guns
and butter for the Vietnam War
and the Great Society were beginning to surface
and the generational disillusion and disaffection
caused by the counter-cultural
revolution was now in
full force all across the
country, from living rooms
to campuses to union halls.
The Nixon Administration enjoyed a
brief and deceptive honeymoon in
1969, because most of the
collective bargaining contracts would extend until 1970.
Sure enough, 1970 saw
the most serious epidemic of strikes
since the end of the second World War.
Postal workers struck for the
first time in history and
there were hard hat riots in several major cities.
During 1970, 41.5 million
man days were lost through strikes.
An increase of 32% since 1969.
As wartime production
slowed down, unemployment rose during the Nixon years.
In 1968, before Nixon began
troop withdrawals from Vietnam, the
unemployment rate was 3.3%,
the lowest that had been since the Korean War.
By 1974 however the unemployment
rate was at a worrying 5.6%.
All considered, that's almost half
of what it is today, and when
I left the Labor Department in
1989, we thought we were
well at full employment at 5.5%,
down from 11.
So as the patterns of
employment were also changing, in
the decade from 1966 to
1976, the northeast alone
lost a million factory jobs,
most of them moving to
a more friendly climate of the south and the southwest.
This period also saw the beginning of outsourcing.
An estimated million jobs moved
from US factories to foreign
subsidiaries between 1966 and
The unions faced a very new dilemma.
They could demand and get
higher wages, but at
the end of the day, what
was really gained if the
employers started moving jobs
overseas or cutting back on investments.
This was also a time when
union membership became relatively
younger while union leadership
remained resolutely old.
It was observed that under
the leadership of 75 year
old George Meany, the average
age of the AFL-CIO executive
council was 63, putting it
in the same league as the
Vatican Curia and Chinese Politburo.
Younger union members were restless.
The average weekly wage had risen
from $95 in 1965
to a $171 in 1970.
The real purchasing power had declined.
At the end of 1970,
a survey found that half
of all industrial workers were worried about their job security.
Twenty-five per cent were
worried about their safety because there
were fourteen thousand fatal on-the-job
accidents in 1969,
far more than the number
of deaths in Vietnam.
28% of workers had no medical coverage,
38% had no life
insurance, 39% had no
pension besides Social Security.
The war in Vietnam, the excesses
of the counterculture, and the
rise of civil rights movement, had seriously shaken union solidarity.
Many union members were fiercely
patriotic, and they watched
aghast as college students waved
Viet Cong flags and rooted
for an enemy victory, with the
apparent support or at least
the acquiescence of much of
the Democratic Party's leadership.
And in many areas, and many
industries, the threat of
competition from minority workers suddenly
became an overriding issue.
All creating the platform for
a most active, most innovative,
even compassionate Nixon labor
department and union support.
In an odd and unique turn of
events, the Republican Richard Nixon
represented the standards and traditions
and values and, yes, seemed
to represent the prejudices of
many hitherto Democratic union members.
The nomination of George McGovern
as the Democrats' standard bearer in
1972 led to the unprecedented situation
in which labor, and labor's
money, sat out the election.
In his memoirs, President Nixon
records a 1972 golf game
at the Burning Tree Club in Bethesda.
The Presidential foursome included Treasury
and former Labor Secretary George
Shultz, Secretary of State
Bill Rogers, and AFL-CIO
President George Meany.
At the 19th hole they
sat for an hour talking and smoking cigars.
As they walked to the waiting
cars, Meany told Nixon
that he wasn't going to vote
for him or for George
McGovern, but you'll
be doing all right with the
Meany family, he said, because
his wife and two of his
three daughters would vote for him, for Nixon.
Then crusty, old Meany put
his hand on the President's shoulder
and he said, "Just so you
don't get a swelled head about
my wife voting for you,
I wanna tell you why.
She don't like McGovern."
It was truly a memorable moment
in many ways, before there
were and before there could
be Reagan Democrats, there were indeed Nixon Democrats.
So before I introduce today's panel,
allow me to say a brief
word about my three Nixon
administration predecessors, who served as Secretary of Labor.
President Nixon's first Labor Secretary was George Schultz.
As these Legacy Forums have demonstrated,
Nixon was a notable spotter of talent.
His choice of the Dean
of the University of Chicago's Business
School to be his
first Secretary of Labor
launched one of the most
impressive and important careers
of public service in the history of the republic.
If Richard Nixon had done nothing other
than give us George Schultz, he
would forever deserve the nation's gratitude.
After only 19 months
at Labor, the President named Secretary
Shultz as Director of the
Office of Management and Budget,
and then in 1972 he named
him Secretary of Treasury. At
Labor, as we will be
hearing, Secretary Schultz was involved
in the Manpower Training Bill of 1969
and played a vital
part in the Philadelphia Plan
for non-discrimination in federal construction projects.
I served with George Schultz in
the Reagan Cabinet and on
the Reagan Library Foundation board, today, and
briefly on the General Motors
board, which is a topic for another discussion.
And he is still, you will
hear what he was
in the days of the Labor Department in the Nixon administration.
I talked to him a week ago and told him I'd be moderating this panel
and I told him who was on the panel.
And he said, "Really?"
He said, "All those guys worked for me."
Indeed they did.
Secretary Schultz was followed
by James Hodgson who served
from July 1970 until February 1973.
Secretary Hodgson had
worked in industrial relations positions
before being appointed Undersecretary of
Labor in 1969 and then Secretary in 1970.
Under his leadership, OSHA
became the law of the
land and he also
played an amazingly strong role
in expanding employment and training
programs through the Emergency
Employment Act of 1971.
Union leader Peter J. Brennan
served as Secretary of Labor
from February 1973 until March 1976.
During that time some very
significant legislation became the law.
CETA, the Comprehensive Employment and
Training Act, and the
Rehabilitation Act in 1973,
and ERISA, the Employee
Retirement Income Security Act of 1974.
You can see that many of
those initiatives respond to the
mood of what I described
earlier that the Nixon
administration faced, but today
it is my pleasure to introduce our panelists.
You can read their extended biographies
in your program as well
as in Who's Who or Wikipedia.
And you can sometimes
find Judge Silverman and Bill
Kilberg in the headlines today.
I'll just remind you of the
positions they held during the time we will be discussing.
Bill Kilberg has been a
White House Fellow, Special Assistant
to Labor Secretary Shultz, when
Prisident Nixon appointed him as
the Solicitor for the Department
of Labor in 1973.
At the time of
that appointment, Bill was the
youngest ever to be appointed
to a sub-Cabinet position in the United States government.
Well, not as well known, I share with you a small story.
Bill and his wife Bobby were
both White House Fellows in
1969 to 1970,
with Bill working for
George Shultz at Labor and
Bobby working for John Ehrlichman
on the Domestic Council in the White House.
The two White House fellows had
their engagement party at the White House on June 12, 1970.
It was Bill's 24th birthday.
Secretary Shultz toasted them
with the observation, and I
quote, "It might be
argued that this is carrying
fellowship just a bit too far."
Our next panelist, Michael Moskow, joined
the Nixon administration in 1969
as a senior staff economist
at the Council on Economic Advisors.
He went in 1970 to the
Department of Labor to
become Assistant Secretary of Policy
and Research, and he was
appointed Assistant Secretary for Policy
Development and Research at the
Department of Housing and Urban Development
following that, and then
of course Undersecretary of Labor in the Ford administration.
But what's not known about him
is that as recently as 2008, as a widower,
Michael married at the
Kohl Children's Museum in Glenview, Illinois.
A woman by the name of Suzanne Kopp,
who was a lawyer and
counsel at one time to T-Mobile.
And finally, but not
last or least, Judge Larry
Silverman, our third panelist, who
joined the Nixon administration in
1969 as Solicitor of
Labor Department and was
appointed Undersecretary in 1970.
After a brief time
in private practice, he became
Deputy Attorney General in 1974.
Now something that is
known is that both Mike
and Bill worked for Larry so
you can anticipate a lively
discussion today.
But what you might not know
is the story of Larry's...ooh, I
could call it a fight with
the White House, not the President,
but some differences of opinion on occasion,
when it caused him to be
fired, and there had
been an attempt to move him
to the 9th Circuit, saying that
"He don't belong in
politics, he's too rigid."
I haven't found that in my years of knowing Larry.
But we'll see what kind
of stories, and more importantly
how we might fill out the
marvelous record of President
Nixon's administration, and the work at the Department of Labor.
We'll start with Mike, he'll make
some remarks, then Larry, then
Bill and then go into
some questions and discussions among ourselves.
Thank you very much!
Thanks Ann.
I think the key thing
to remember about the beginning
of the Nixon administration from the
economic standpoint is that it
was a completely different environment from today.
The major issue, the major
concern in the country, as
Ann alluded to, was inflation.
During the 1960s, we had
the Johnson administration and had a
very expansionary fiscal policy.
Monetary policy was accommodative
during that period, and as
a result, we had very
high inflation coming into the latter part of the 1960s.
I joined the administration in
the summer of 1969, as Ann
says, as a staff economist
at the Council of Economic Advisors, and
at that point the key
driver of inflation was
viewed as the construction industry.
Again, this is the complete opposite of today.
At that point, the unemployment
rate in construction was very low.
Today, it's very high.
And wage increases in the
construction industry were running
at 20 percent a year, about
twice the average of wage
increases in the manufacturing
sector of the economy.
So, the political pressure on the
administration and the Congress
to do something about inflation
was enormous and actually,
at this point, the business
round table was formed. Today,
the Business Roundtable is a
major lobbying group for large
multi-national companies, it was
actually established as a
construction users anti-inflation round table.
Chaired by Roger Blough, who
was then Chairman of U.S.
Steel at that point. And
their major purpose was to
lobby the administration on reducing
costs in the construction industry.
The administration took a
series of steps in 1969.
The Council of Economic
Advisors issued what were
called inflation alerts, to identify
to the American people the importance
of inflation and different sectors where inflation was important.
In September of '69,
the President established a Cabinet
Committee on Construction, chaired
by Paul McCracken, the head
of the Council of Economic Advisors. This
committee took a series
of steps, including directing federal
agencies to cut back their
new spending on construction projects
by 75% and they
encouraged states and cities
to do the same thing, and private
sector funds to do the same thing
as well to reduce the pressure
on resources in the construction industry.
Again in September of
'69, the President by Executive
Order established the Construction Industry
Bargaining Commission, which was
a tripartite group that was
set up, labor, management, and public,
to deal with structural problems in the construction industry.
It was John Dunlop, who
was then a very well
known labor economist at
Harvard University, was heavily
involved in this and he was one of the public members.
It was chaired by George
Shultz, and I became
the second Executive Director on
that Construction Industry Collective Bargaining
Commission in 1970 and
moved to the Labor Department.
But by 1970, inflation was not improving.
Wage increases were still very
high and Congress passed
the Economic Stabilization Act of
1970 which gave the President
the authority to impose wage and price controls.
No one ever thought that Richard Nixon would impose,
use that authority to impose controls.
He was strongly opposed to wage and price controls
and spoke about that frequently.
But this was a political move
to make inflation an issue in the next election.
The Democratic Congress could
say that the President had
the authority to do something about
inflation and he didn't do it.
Well, at that same time
the national leaders of the construction
unions were very concerned about
inflation, very concerned about
these large wage increases in
construction, as were the unionized contractors.
But the union leaders were in a very difficult political position.
They couldn't agree voluntarily to
reduce wage increases, this would
be selling out their members, but
they knew that over time
this was going to lead to an
erosion of unionized construction
and a growth of the non-union sector in the industry.
And that's exactly what has happened
over the years. They knew their self-interest.
So we needed, John
Dunlop working with the members
of the Construction Industry Collective Bargaining
Commission came up with
a plan to have wage stabilization
in the construction industry.
But the union leaders needed
some type of political cover
in order to implement this,
they just couldn't be viewed as
selling out their members. So,
it was arranged to have
a meeting with the President
and it took place
on January 17, 1971.
The union leaders were
there, the unionized contractors
were there, and Nixon was
supposed to take a hard line stance.
He was supposed to demand that
the parties come up with a
voluntary plan to reduce
wage pressures and price pressures
in the construction industry, and he
was supposed to give them an ultimatum as well.
So as I sat at that meeting,
I kept waiting for the
President to get tough to give them the ultimatum.
It never happened.
He was not tough, at all, in a meeting.
He was too easy.
He never gave the ultimatum. He
did ask for a plan,
for them to come back with a
plan in 30 days, and
we can speculate why he
wasn't tough at that meeting, but he just wasn't.
So there was no political
cover for the union leaders they
did come, took them more
than 30 days, but they did come
back with a plan. It was an adequate plan.
February 23rd, Nixon surprised
them by suspending the Davis-Bacon Act.
Now the Davis-Bacon Act
is an act that sets prevailing
wages on federal construction
projects and federally assisted
construction projects, and it's administered by the Labor Department.
And it seems that frequently
the prevailing wage is the union scale.
And this of course gave a great
advantage to the unions and
the unionized contractors because there
was no lower wage coming
from the non-union sector on those projects.
So, he suspended Davis-Bacon, the
Solicitor of Labor Peter Nash,
at that point, said that
his suspension, the President's suspension
of the federal law actually suspended
38 state Davis-Bacon Acts as well.
So, this was obviously, so
it's a bit of a stretch, and
in any case, we
were clearly at war with
the building trades at that point,
and it was a war that
no one wanted. So, on
March 29th, Nixon then
imposed wage and price
controls on the construction
industry, using the 1970
authority that Congress had given
And he also reinstated Davis-Bacon,
the union leaders had the
political cover at that point
and agreed to cooperate.
They set up the Construction Restabilization
Committee, John Dunlop chaired this.
This was a tri-partide group,
labor, management, public members,
and it was successful in moderating
wage increases in the construction industry.
In fact, it was so successful
that it gave support to
those who wanted to
have wage and price controls on the entire economy.
So this was March of 1971,
and then of course
we know that on August 15th
of 1971, the President surprised the nation
on a Sunday night speech,
announcing his new economic policy,
which included a freeze
on wages and prices for 90
days in the entire economy, to
be followed by a Phase
II with a price
commission and a pay board
to again control wages
and prices on an ongoing basis.
Now the Stabilization Committee in
the construction industry was tripartite, as
I mentioned, and the pay
board was set up
to be tripartite, but it
was clearly not successful.
And it's interesting to contrast the two,
because the pay board, to
control wages in the entire
country is almost an impossible
job, given the dynamics
of the American economy and the scope of the American economy.
But it was set up tripartite, George
Meany served on the pay
board initially, along with other
union leaders. So, they had,
that was one strike against them, it was such an impossible task.
The second was they appointed someone,
Judge George Bolt, to
take responsibility, to head the
pay board. He had no
experience in the labor area whatsoever.
The Labor Department, we had recommended at least
a half a dozen people to
head the pay board, people who
had experience in the labor
field and could understand
how to deal with unions and management.
All those recommendations were rejected.
Volcker took charge.
It eventually broke off,
the union leaders left, and it
was no longer going to be a tripartite group.
Now, inflation did subside temporarily
in 1971 and 1972, and
it did probably
help Nixon get reelected, as well.
But of course it didn't last.
This type of trying to
put a control on
a pressure cooker just couldn't possibly last.
And I think what
we've learned from this is
that the only real way
to control inflation is sound
monetary policy and fiscal policy.
And it was only when Paul
Volcker took responsibility for
the Federal Reserve in 1979
that we got inflation under control.
I say the other thing we
learned is that there's a
whole group of us who
will stand at the barricades
to prevent wage and price controls
from ever happening again in
peace time in the United
As Ann pointed out, when
George Schultz came to the
Labor Department, he had
as a model for Secretary
of Labor Mitchell's performance back under the Eisenhower administration.
And under the Eisenhower
administration, the building trade's unions
were sympathetic, almost overtly
sympathetic to the Republicans in many respects,
and the AFL-CIO was
not quite as determinedly
part of the Democratic
Party constituency as it became
more and more as time went on.
So that his model for
Labor Secretary was less
hostile to trade unions
as was true of
some, not all, not and,
but some who followed, under other
Republican looking presidents, so we
had a balanced group of people in the department.
One, Bill Usry, came
from the machinist unit and the rest of us, none
of us were perceived as
hostile to trade unions.
With respect to labor relations
itself, the dealings with unions on collective bargaining,
Willard Werks, and before
him, Arthur Goldberg in the
Democratic administration, had spent
an enormous amount of time,
effort, and publicity at
actually working at settling
labor relations disputes, settling strikes.
Arthur Goldberg became famous for
running around the country settling disputes,
and Willard Werks tried to do that as well.
George Schultz decided when he
came into office, that was a profound mistake.
He once said, "As Secretary
of Labor, if you hang out
your shingle regarding settlement
of disputes, you'll get all the business."
And so he did not do that.
The one area were
there was enormous pressure to
settle disputes was in the transportation industry:
airlines, railroads, part covered
by the National Labor Relations Act,
part covered by the Railway Labor Act.
Because those could result in
national disputes that would
paralyze the country and which
would sometimes require the
government to go into federal
court to get an injunction under
a provision of the Taft-Hartley Act.
Those were nightmare situations, because
if you went to Congress to try
to settle a national
emergency dispute in the
transportation industry, you ended
up with 535 arbitrators and
it was chaos.
Now the trade unions did not mind
that so much as alternative
approaches because they largely
controlled Congress, or at least they had enormous influence.
They had a Democratic Senate and a Democratic House.
So they didn't want any particular
changes to that, but
it was, as it was, a nightmare.
We came up, George Schultz
directed us to come up
with legislation to deal with it.
And we came up with legislation, I'll
tell you about the legislation
in a moment, and we also had another weapon.
The weapon was Bill Usrey, who
was the most extraordinary mediator
that I think this country ever saw.
He was like a miracle.
He would go into a room
full of management and raise
a flag and talk about patriotism.
And then go into a
room through, full of union
members in vicious dispute,
use the same speech, then go back and go to sleep.
But he would know, after only
fifteen or twenty minutes with
people, what their bottom line was.
So he would miraculously put together a settlement.
And he became enormously effective
in dealing only in that
area, the area of transportation
potential emergencies where
there was a necessity for the government to play a role.
But we came up with legislation,
which has its still life today.
We couldn't get it passed.
It was called final offer selection.
And it was a device
whereby, when there was
an emergency the government
would have the authority, after a
quick injunction, to set up
a panel which would
then have a decision to
make between the labor position and the management position.
It would not arbitrate.
It would not have any authority
to split the baby. It had
to choose either the most
reasonable position, last offer
presented by union employers,
or the last offer presented by the union.
And the theory of it, of
that bit of legislation, was
that it would force, it would induce
people to negotiate beforehand,
push them together because the alternative was so horrible.
The downside risk if the
panel would take only the
side of one or the
other, the one that was
not chosen would be so
humiliated, there would be
this enormous tendency beforehand to
try to reach an agreement. Hopefully, the
panel would never have to be used.
It didn't pass in the
Congress at the last moment
because, although we had
almost the votes in the Senate,
because the President made a
deal to get the
support of the teamsters'
union in 1972, and
a quid pro
quo of that deal
was that we would drop
support for final offer selection.
I remember George Shultz called
me to tell me that set deal
was made, and I had
to call the Republican senators who
were carrying our ball, to tell
them that we were abandoning the position.
It was not a pleasant conversation.
The other two bits
of legislation which we focused
on, and I have to
be very brief, were the
Occupational Safety and Health
Bill, which George Schultz directed
us to come up with,
because there was enormous pressure
in the Congress to come up
with legislation to deal with
safety, and so it
was our effort to compromise with the Democrats.
We tried very very hard
to get in the legislation
a concept of cost-benefit analysis in the setting of safety standards.
Ralph Nader was very effective
in preventing us from getting that directly in the legislation.
We did get some things that were indirect.
Finally, I would point out,
Anne has mentioned two major manpower bills.
I'm particularly proud
of the fact that with Mike Moskow's
help, when he came over to
the Labor Department, we focused
very hard on the evaluation of
our manpower programs.
For all our legislation and
for all the billions of dollars
we've spent on the
manpower programs, the payoff for
these training programs was pathetically
It was a damn shame.
Those programs were very expensive,
and the longitudinal studies showed
sometimes that people would
be better off if they
didn't go into programs over time than if they did,
which was more than
a little discouraging, but the one
other initiative I should
mention is the affirmative action.
It follows to a certain
extent from the concern of construction industry wages,
but George Schultz also had
in mind the notion that we in the
Labor Department had a major
responsibility to accelerate the
opportunities for minorities in
employment, and of course
construction was an area
which had, over the years,
tended to discriminate against African Americans.
So we came up with affirmative action.
That is to say that we came
up with an interpretation of affirmative
action which was part of
an executive order that had
been issued a long
time before, which focused
specifically on forcing employers
in the construction industry originally, and
then eventually the whole country and
all the government contractors,
forcing employers to hire
and promote minorities in accordance
with numerical standards and goals and timetables.
That initiative has remained,
I think it's probably the single
worst thing we ever did
in government, and it
has an enormously pernicious impact
in generating the acceptance of
quotas by another name,
goals, throughout our society
and education, employment, elsewhere, and
as is reflected in
a case that's coming, perhaps is
coming to the Supreme Court this
year, some economists have
concluded that the preference
idea for minorities actually has
turned out to be terribly injurious
to the minorities themselves.
Finally, I should talk
a little bit about George Schultz and Jim Hodgson.
George, as has been
mentioned, left the Labor
Department to go over to OMB.
Before he did that, his
prestige was so high in
that administration, that the
Labor Department was sort of
the favorite son or
daughter on the domestic side.
And George was given such
responsibility that he
was actually put in charge
of the Oil Import Task Force,
which was dealing with the import,
concerns about the import of oil into the United States.
As Labor Secretary of course
he had no special expertise about that at all,
but his judgement and wisdom was so trusted.
What is not sufficiently appreciated was
his original Undersecretary, who
became Secretary, Jim
Hodson, was an enormously capable man too.
And Jim did a wonderful job.
I had the pleasure of serving as his Undersecretary.
Unfortunately, he made a
mistake once, a White house
instance, he attacked George
Meany, which destroyed his effectiveness
because George Meany responded, "I
don't pay attention to the
janitor as long as I
can talk to the owner of
the building," which destroyed
Jim's effectiveness. It's
a shame because he was an enormously capable guy.
Any event, finally I
would end by saying it
was a pleasure to have Mike
as my deputy, I recruited
him out of the White House
as a labor economist.
It was he who convinced me that
the minimum wage laws were injurious
to the country, and
we actually proposed a youth
differential, partly because of Mike's instance.
Bill Kilberg was a
wonderful teenager and
he's still only barely older
than that. A wunderkind, and
he took over to help
destroy the economy on affirmative
action and I'll leave it
up to him now Thank you.
It's not clear how to
follow that.
You know, Ann and
Mike and Larry have given you
some idea of many
of the important domestic initiatives
that we've had at the Department
of Labor in the Nixon years.
Because of those programs,
and domestic programs generally in
the Nixon administration, one might
think of that time as
merely an extension or completion
of the Great Society.
It certainly reflected, as Ann
indicated, the social consciousness of the
time, but it also
reflected a reaction to
overreaching in the Great Society.
Thus, while recognizing a
role for government, it sought,
and I think some of Larry's comments
underscore this, it sought
to limit the reach and intrusion of that role.
The administration favored affirmative action,
but, just as
it favored other Civil
Rights measures, it would
come to oppose busing for
school integration, and it
disavowed the use of employment
quotas for the hiring
and promotion of minorities and women.
It supported pension reform, but
it warned of the moral
hazard of government-provided
nonrisk-based insurance
for retirement plan terminations.
In taking these positions, the
Nixon administration would at
times strain its relations
with organized labor or at least with elements of it,
but would maintain or even
expand its space among blue collar workers.
Let me address two examples
in more depth. The origination
of the Contract Compliance Program depended
on statistical analysis looking towards
hypothetical availabilities of minorities and women.
Furthermore, it assumed that discrimination,
if any had occurred, was societal,
not necessarily tied to any individual employer.
These characteristics when combined
with numerical standards, were
what made the legal issues surrounding
the constitutionality of the program so difficult
and what give rise later to
the self-criticism of the OFCC
The AT&T and steel industry
consent cases presented situations
where there were defined groups of
individuals who had
been subjected to discrimination
in job assignment and were
continuing to suffer from
that discrimination. As was
common at the time, jobs
were often characterized as female
jobs or male jobs,
black jobs or white jobs.
Thus, women applying for employment
with the phone company invariably were
directed to operator positions or simple line assignments.
Blacks looking to work
in the steel industry were invariably
directed to jobs in
the hot end of the industry,
in the coke ovens, rather than
in the better, well not
better paying, but better
jobs in the coal end of the industry,
the rolling side of the mill.
Even after passage of the
Civil Rights Act of 1964,
women and blacks were locked
into their positions because union
seniority rules made it
impossible for them to
use company or plant-wide seniority
to compete for jobs that had
hitherto been denied to them.
With the support of then
Solicitor Dick Schubert, Undersecretary
Silverman was refused from
involvement with the AT&T
case and I
was then serving as Associate Solicitor
for Labor Relations and Civil Rights.
I sought to put together a
government-wide settlement of all outstanding
equal employment matters, first
with the entire Bell system
and then with the steel industry, that
would meet the legal standards that
I understood the President wanted us to uphold.
Let me put this in context. In
1972, the Equal Employment Opportunity
Commission had yet to
obtain the right to bring cases in court.
It was basically a conciliation agency.
It did not have litigation authority
until after passage of the
1972 amendments to the Civil Rights Act.
It was an agency that had
a mission to conciliate, but at
the same time it had an
aggressive staff that wanted
to litigate and favored radical change.
In a creative action, the EEOC
had brought a complaint with
the Federal Communications Commission seeking
to deny approval of AT&T's
request for an increase
in its long distance rates, on
the grounds that AT&T discriminated
against women. The EEOC
was insisting that AT&T
adopt strict employment quotas
for the employment of women in
craft jobs and the
employment of men in telephone operator jobs.
The Department of Labor's Contract Compliance
Authority, in which
we reviewed AT&T as a
government contractor, was somewhat
undercut by the reality
that we dared not
cut off phone service to the entire United States government.
I enlisted the Department of
Justice to represent the
Labor Department and the Office of
Federal Contract Compliance in a
breach of contract action against the phone company.
Our allegation was they had
breached their commitment not to discriminate.
I also garnered the support of
the Department's Wage Hour Administration,
which had authority for the enforcement of the Equal Pay Act.
And I approached EEOC
Chairman Bill Brown, promising the
EEOC lead status on any caption
for a nationwide federal consent
decree that would
be filed in federal court, if
they would join us and work
with the Department and the
Department of Justice on a comprehensive solution.
On January 18, 1973, we
announced an historic agreement that
included support from the
IBEW, although not from
the Communications Workers of America,
and that permitted women to exercise
company-wide seniority to bid
for higher paying craft jobs
and provided them the incentive
of a payment, if they
were successful, to compensate them
for the delay they suffered in being allowed to compete.
There were no quotas and numerical
goals were based on the
availability of existing, qualified
women already in the employ of the phone company.
A year later, by
which time I was solicitor
of the department, we replicated
the principles of the AT&T
agreement in the steel industry consent decree.
Nine steel companies and the
United Steel Workers of America
agreed to replace department-wide
seniority with plant-wide seniority
for most promotion, transfer,
layoff, and recall decisions.
This allowed hundreds of black
workers who were in the
dirtiest, hottest jobs in
the industry to successfully compete
for jobs in the cleaner, cold end of steel manufacturing.
These workers were red circled
to protect their rates of pay
when the transfer required moving to a lower-rated position.
This, plus back pay and
the use of aspirational goals targeted
at the victims of discrimination, but
no quotas, transformed the
gender and racial make-up of
two major industries, while trampling
on the rights of no innocent employees.
Talk a little bit about ERISA, the
Employee Retirement Income Security Act of 1974.
In January 1971, there was
a committee headed by Peter
Flanigan, some debate among Larry
and Mike and I as to
its characterization, but I remember
it being referred to as the
Committee on the Blue Collar Worker,
and it included representatives
of the Labor Department, Commerce, and Treasury.
This committee turned its attention to pension reform.
This is a subject that prior
administrations, most notably both
the Kennedy and Johnson administrations, had
worked on, and it had
garnered the long term
attention of Senator Jacob Javits,
who had first introduced a bill
in 1967.
The auto and
steel workers' unions wanted a
government termination insurance program
to provide assistance to current
and future retirees in the
event companies could no longer
fund their retirement plans.
They opposed any private, risk-based
system because, they
argued, the weakest companies would
pay the most in premiums and
that might tip them over the
edge of solvency.
The building trades and the
teamsters' union generally opposed
any regulation of the private
pension system because their
members participated in collectively
bargained plans for the most part
and they feared that any increase
in the cost of the administration
of those plans would result
in the diminution of benefits.
Also since union officers were
involved in the administration
of those plans, they opposed
any fiduciary standards that might apply to those individuals.
Employer groups generally supported standards
of conduct and disclosure rules.
Some employer groups also endorsed
enhanced vesting and funding rules.
But terminations insurance was seen
as a costly, unnecessary complement
to funding rules.
On December 8th of 1971,
the Nixon administration proposed legislation
that included fiduciary standards of
conduct and a very
clever vesting rule that focused
on older workers who were
most threatened by benefit forfeiture.
More important, the administration favored
individual retirement accounts, which
would permit employees without pensions
to contribute up to
$1500 a year, or 20% of
earnings, whichever was less, to an account
in their own names, deduct a
contribution from their federal taxes,
and pay no taxes on earnings
until withdrawal at retirement.
Thus, the administration came down
on the side of individual responsibility
for retirement savings, much to
the chagrin of organized labor.
Two years later in 1973,
the administration's recommendations were
in the hands of a newly
created National Economic Policy Council,
chaired by former Secretary of
Labor and then Secretary of the
Treasury George Schultz, and vice
chaired by Assistant OMB Director Ken Dam.
The Department of Labor
was represented by my office, the Office of the Solicitor.
Treasury and Labor agreed that
pension participants be allowed
to withdraw their vested pension
benefits and roll them
over into an individual retirement account upon termination of employment.
This would was a new
aspect of the IRA proposal.
We also agreed that the bill
would include both a funding
and a termination insurance provision. We
disagreed because the Treasury
wanted the termination insurance provision
housed at Treasury.
We wanted it housed at
the Labor Department. The President had to make the decision.
The President decided that the
administration would oppose termination insurance.
It would be housed in neither
agency, because we would not
support that provision.
And he did so
expressing concern regarding the
moral hazard of having a
termination insurance program, arguing
that it would be an incentive
to aggressive increases in
benefits without providing adequate funding.
George Shultz and I would
brief the press on the
administration's position on April 11,
By 1974, organized labor
had gotten most of its way.
It was forced to accept fiduciary
standards, but got
most of the rest of what
it wanted, including a
termination insurance program, the
creation of the pension benefit guarantee
corporation, which would be
housed in the Labor Department
for administrative purposes, but independent of the department.
Time has proven the President
correct in his concerns with regard to termination insurance.
In fact, the Congress has over
the last 35 years been
forced to shore up the
termination insurance program numerous
times, revising the
premium formula, tightening funding
rules, limiting the ability to
terminate plans and increasing
employer liability upon plan termination.
At the same time, the number
of defined benefit plans protected
by termination insurance has nevertheless
decreased dramatically, and employees
have found that more of their
retirement savings has been put at the risk of the market.
At the same time, individual retirement
accounts have proven to be
a winning concept, providing employees
with increased security and enhanced
portability when the
increase in employee mobility has made it most important.
A few general thoughts
on those years.
President Nixon had promised
in the 1968 campaign that
he would reach out to working people.
He fulfilled that pledge with
a host of initiatives to improve
the lot of working people and
to make the work place a safer place.
Not everything that was done was wise.
For example, wage and price
controls. But the
larger picture reflects well on the effort, I think.
It was an open relationship with organized
labor, which represented, of course,
a much more substantial part of
the private workforce then than
it does now, but it was not always a friendly one.
Nevertheless, the AF
L-CIO officially remained neutral
in the 1972 race, and
Nixon garnered significant blue collar support.
Indeed, the so-called Reagan Democrats
were originally a creation of Richard Nixon.
An irony of our success, maybe
something we should discuss, is
its contribution to the demise
of organized labor in the private economy.
As government regulation expanded, workers
have seen less and less
of a need for the
protections provided by union representation.
Thank you.
Well, thank you all.
I think we've got the
afternoon planned for here,
there is so much to follow up
on and cover, but let me
start with something a little
bit on the a lighter side, but
to your last point Bill, about
the relationship generally with labor
before we get into the
why. It has been
said that Nixon liked labor
individually and McGovern
and the Democrats liked them as a mass.
With that in mind, and
a little unknown story is that
in 1970, although it's very
much a matter of record,
President Nixon, probably the first
time and last time, invited
labor on Labor
Day, members of the
AFL-CIO, the presidents
of various unions, to honor
the labor leaders. Never
before in the White House had that happened.
George Meany, of course, was
there and at that
time there were 20 million
members of organized labor in
the country. The President toasted Meany
and he toasted him for
his patriotism, his character,
his family, his country, freedom,
because he also toasted him as
he believed in a strong free labor movement.
Larry, you were there, do
you wanna address
that a little and talk about
it in the context, one, of 1970,
and two, ultimately much
of what the Nixon administration
and you all worked on and put
in place, to Bill's point, started
to diminish a need for
organized labor because of federal regulation.
So it was a social
event that had great moment,
but... It was a
black-tie dinner honoring the
labor movement, and it
was a precursor, of course,
to the efforts to gain
labor's acceptance, and ultimately,
neutrality, in the
'72 election - a neutrality
which was in no small part
aided by the selection
of George McGovern, who George,
meeting with Lane Kirkland and
the leadership of the AFL-CIO,
formed a major distaste for.
They disliked him intensely,
as much for his
national security views as anything else.
It was part of my job
to try to gain the
support the AFL-CIO in '72.
What we did gain is active
support from the building
trades unions, many of the
building trades unions, specifically certain doors and exits.
Seafarers did as well, I was reading, is that right?
Yes, and the changes,
as I said earlier, that a quid
pro quo for the teamsters' support
was the dropping of the final
offer selection legislation, but
the AFL-CIO was just intensely
distrustful of the McGovern
wing of the Democratic party.
They were appalled at what had
happened when the Scoop
Jackson wing of the Democratic
party seemed to dissolve before their eyes.
They were very troubled.
It's quite astonishing amongst, when
you compare the labor movement of
the sixties and seventies with
today, not only as
Mike said, you have such an
enormous decline in the
portion of the labor represented
by organized labor and of
course the bill made it through.
The labor movement has shifted
even within those limited bounds
far to the left as you
have a much higher percentage of
public employee unions.
Their political views are much
to the left of where the
old building trades were or even the industrial union.
As a result of which you
see quite a shift in
the politics of the Democratic
party and certainly
on national security matters.
The AFL-CIO back in
the '60s and '70s was anti-detente, it
was to the right of Nixon and Kissinger.
Now, it's far to the
left of not only
the Republicans but many of
the Democrats. Amazing shift.
Michael, maybe comment on the
growth and efforts for
public sector job creation, which
also built a constituency
for labor over these many
years coming out
of even all the wonderful initiatives we made.
Well, there are a couple things. Let me just
first comment on this
decline in union membership in the private sector of the economy.
I think it's primarily due to
the changing structure of the
economy, the reduction of
manufacturing jobs in the economy and
the growth of service jobs in the economy.
This is a long-term trend that
I think is one of
the major drivers for the
reduction in the
percentage of our workforce that's unionized.
Of course, the growth
in the unionized portion has been
in the public sector as you
say, primarily at the city level
and the state level, public school
teachers and so forth, and
many many states now have
laws providing for collective bargaining
rights for public sector employees.
So that's been the growth
portion of the unionized,
of the members of the AFL-CIO.
I think what you're
referring to is there was, when the Nixon
administration was trying to
increase employment and reduce unemployment,
there was one initiative that in retrospect was a mistake.
I think it was creating what we called public service jobs,
where we would directly
fund unemployed people to
work in government jobs at
city and state level. It
was a temporary program, fortunately, and
it hasn't been repeated since then.
Well, shovel ready and stimulus might
be a close cousin, but I'm
not going to say that, but it didn't work.
How big was it, Mike?
I don't recall,
but there was
enormous pressure to spend the
money quickly and get people
on the payrolls very
quickly before the '72 election.
Well and CEDA feed that later.
It was of the same
cloth, although not the same
program exactly. I would
also point out in terms
of the decrease in
private sector density of
unionization of the private sector is
increasing competition in areas
where you have seen deregulation that
resulted in increasing competition, for
example, trucking.
The world has changed dramatically.
In our time, the trucking
industry was largely unionized, predominately teamsters.
Today, there are two large
trucking companies that
are unionized, the majority of
the industry is non-union.
Even in manufacturing, we've lost
4.5 million from 1977
to the present time, we've
lost 4.5 million unionized jobs.
The nonunion sector
in manufacturing has actually increased by a
million and a half since 1977.
So what you've seen is
an increase in competition
and where there's been
increasing competition, often unionized
companies have lost out
to nonunion companies, and the
shift in construction is equally dramatic,
much of that helped, frankly, by
the civil rights laws. It wasn't
just the Philadelphia Plan. As
Larry indicated that wasn't
George Schultz's primary focus, but
the reality is that by
opening construction jobs to
minorities, we also increased
the number of construction workers and
put pressure on their ability
to monopolize the control of labor.
I think you also have to add
more sophisticated management.
Yes, yes.
Management got much better
at sort of managing
the workforce and giving employees the
right to participate, even when they weren't unionized.
So I think there's a much
more higher degree of
sophistication now and people just
feel they don't need a union to represent them.
No, that's true.
I think you're both right about the
reasons for the decline, both structural
and the global competition, but
what puzzles me is that
you don't see the same
decline of the unionized
portion of the workforce in
Europe as you do in the
United United States even though they,
the European countries, face many
of the same structural and competitive factors we do.
Yet the portion of their unionized
workforce remains pretty much the same as it was in the seventies.
Very puzzling, I don't know why.
I can only say anecdotally, when I
was at Labor with the
Reagan administration, I had a
visit from the Italian labor
minister, who was coping
at that time with a lot
of shift of North
Africans into Italy, and also
not as many jobs, and
so we sent them on
a tour of our training centers,
and I don't think this is the
answer, but he said when
he came back, "I know how you've created all those jobs."
And I said, "What did you find out?"
And he said, "You're open on Sundays."
The point is our whole structure
was so different on taxes and
everything else, but that's a whole other subject, but it's a good one.
Let me come back to something that
we haven't really talked about either
at our dinner last night
warming up or today, and you've mentioned it.
Two things.
One, yes employers became more sophisticated.
I know I used to
say to them adapt before Congress adopts, but what about Congress?
A couple of the comments
you all made had to do
with the initiatives of the
administration being asked by Congress, send us something.
Can you address what Congress was like at that point?
Because they really were a,
by and large, Democratic Congress
with ties to labor.
I once gave a speech in
which I said there are 4
partys in the Congress that are relevant to the Labor Department.
There are the Southern Democrats, there are
the Republicans, the AFL-CIO,
which largely controlled all the
Northern Democrats, and Javits. He
was an independent factor and
enormously brilliant, exasperating in
some respects on matters that he thought were too
conservative, but occasionally very helpful.
But that's sort of the way things worked.
The Southern Democrats of course
were in many respects
more conservative than many of the Republicans.
The structure of Congress and
the parties was quite different
in those days than it is today.
Well, I've often felt like
in more recent times, and I
said this to Lane Kirkland, they've
abdicated their leadership to Congress.
They, the labor, AFL-CIO, because
they've given to them all these
rules and protections and initiatives,
rather than fighting for it
or bargaining for it from, today
childcare and family leave items,
but certainly discrimination and jobs
for women and appropriate training and all of that is important.
That's a sensitive subject in the
labor board, you know the
people utterly forget, except
for the few historians, that the
old AF of L,
before it merged into CIO,
opposed unemployment insurance, opposed
the minimum wage law,
opposed all sorts of
legislation for precisely that
reason. They didn't want
the government to take those over
because they would reduce the purpose and need for unions.
But just a word on the era.
I mean, the Occupational Safety
and Health Act was the William Steiger Act.
There was Bill Steiger from Wisconsin
in the House.
John Erlimbourne
from Illinois was a
key player in ERISA, Al Quie from Minnesota.
These were people that we worked with on a regular basis.
Now Javits clearly was a
dominant figure, certainly in the Senate,
even though he was
in the minority. He had
enormous influence over what
the Senate Labor Committee would
do and what the
direction of legislative initiatives
would be, but there were
leaders in the House as well, and
they were bipartisan. In fact, it
was the Republicans, I would
argue, who were certainly the
more creative and the more
aggressive because so often
the Democrats were waiting for their guidance from the AFL-CIO.
Yeah, the truth of
the matter, the Republicans were playing a defensive game.
Even Bill Steiger with
whom I was really close, took
over the sponsorship
of that bill because we begged
him to do so, in order
to reduce the power
of the Democrats and the AFL-CIO.
We wanted more of a compromise.
So it's not
quite true that the Republicans were
pressing those issues.
I mean, but the environment in the Congress was completely different than it is today.
I mean, it was much more
bipartisanship, people working together.
That's true, because as I
said earlier, the Southern Democrats
were to the right of many of
the Republicans and there are
all sorts of really liberal Republicans
like Schweiker and Javits
and Case who were to
the left of many Democrats,
but I have to tell one wonderful story about this.
I went up with George
Shultz to meet with Senator
Yarborough, who was Chairman
of the Labor Committee from Texas.
He was not a rocket scientist.
He said nice things about you, but go ahead.
He's no longer alive.
But any event, we
were talking with him
about labor legislation
dealing with farm workers
because he had wanted an
initiative on that, and
George was explaining what
the problems were and
he was going on for about
a half hour, and I could see that Yarborough was getting a little bored.
And a phone call came in.
You know, George was
such an important Labor Secretary, a
phone call comes in and Senator
Yarborough said, "I can't interrupt now.
I am in an important meeting. I
am in an important meeting with the Secretary of Agriculture."
So George and I went back in the car together.
George said, "What did you think about it?"
And I said, "Well, I think he's a dummy."
And George said, "That can't be true.
He's been elected to the Senate a number of times.
He's got to be competent.
You should be more charitable about it."
I said, "I still think he's a dummy."
Well, the history will tell you.
But, back to
George Schultz then, if there
were a, was a
Congress that was more bipartisan
and therefore more encouraging to
the compassion and the initiatives
of the Nixon administration's labor
activities... And more creative
at coming up with
alternative ways of getting things done.
Well that's a fair point and certainly true.
Well, and with that in mind, George
Schultz, I think we know
was a supporter of Cabinet
Government because it worked well.
He was a phenomenal cabinet officer.
Well, what of this idea of
bringing more of the policy making
into the White House, stronger domestic
policy, organization,
Cabinet departments execute the policies that might come out.
That was probably the first
of really strong domestic
policy, strong White House on
policy initiatives, and yet
the labor agenda was huge
and the labor initiative out of the Labor Department, huge.
Can you talk a little
bit about that time with the
White House organization and the
growth of, if you
will, a more centralized
economic set of agencies,
as I understood it.
It was consolidation, I guess you would call it.
Well, I think the
President had enormous confidence in George Shultz.
And George really took, to
a certain extent, the labor
portfolio in some part
with him when he went over
to OMB.
But Jim Hodgson had George's confidence.
So I think therefore the
President was inclined to
allow the Labor Department to run
as it wished because he trusted George.
I don't think he had anywhere
near that kind of confidence in
other domestic cabinet secretaries.
Certainly not the State Department.
Michael, you were in the
White House at one point and then outside.
What's your take on the
role of the White White House
in those days and the efficacy
of some kind of super cabinet structure?
Well, I was at
Council of Economic Advisors, then
the Labor Department, and then HUD.
And when I was
at HUD, in Nixon's second term,
of course, he set up the
super cabinet officers, and Jim Lind,
who was then Secretary of HUD,
was in charge of one group
of cabinet agencies, I think
it was something like Community Development,
Community Urban Development. He had
an office in the White House,
or at OMB, the old Executive Office building.
And of course, as the Secretary of HUD,
he was back and forth between the two.
He had a person working for him at
OM, at the old Executive Office
building who would handle these broader responsibilities.
And, of course I
think this lasted less than a year, this structure,
I mean to have one
cabinet officer overseeing other
cabinet officers, I think was doomed to failure.
Now, of course Watergate was
going on too and a lot
of other things were happening, but I
don't think that structure would have been viable on a long term basis.
Well Mike, from the White House
point of view, do you think
I was right about George Schlutz
having a dominant role in the
domestic area that no other
domestic cabinet officer had
that, well, perhaps Butz did,
as Secretary of Agriculture, but nobody else had that role.
No, I think you're right.
I was as a member
of the CEA staff, we were,
I was the labor economist there
so I was always dealing with
labor issues and I think
there's no question that the President
had a lot of confidence in George
Schultz and his area of
responsibility just kept growing
as evidenced with OMB,
Secretary of Treasury, and so forth.
No, he will go down in
history as one of the outstanding Secretaries of Labor.
Bill, comment on the
relationship with the White House?
Well, I had a relationship with the White House at the time.
Well, we know, but nothing personal, please.
Much of my understanding of
it really came from Bobbie, and
she would often tell me
that "You don't really appreciate
how things work because you're at
the Labor Department, you're working for
George Schultz, and it's
quite a bit different at other agencies."
So my sense certainly was the
same during those early years,
and I think it carried through.
Now, things changed after
1972, 1973 when
Peter Brennan came in.
And that was a
different attempt, a different view of governing.
And Pete, you know, came out
of the building trades in New
York, and I think his appointment was a political outreach.
But he was, certainly didn't
have the knowledge of
government or of the
programs of the department
he was responsible for in the
same way that Schultz and Hodgson
That lasted about
two years and then of
course we were into
the Ford administration and John
Dunlop and Bill Usery and
things return to the
model that we had gotten, that we had known earlier.
I can tell one sort of
anecdote about the White House and labor.
I was a CEA
staff member for a year
and then Larry offered me
the job at heading the Construction's Collective
Bargaining Commission. It was a
compromise, I'd work half time.
For six months I worked half-time
at CEA and half-time at Labor.
And at CEA we were
very worried about the Davis-Bacon Act,
so we, and an old saying in
government, you never sign anything you write, you never write anything you sign.
We drafted a memo for
Paul McCracken to send to
the Secretary of Labor, outlining
sort of a different way to
administer with the Davis-Bacon
Act, with some specific suggestions.
And McCraken sends it over to Hodgson.
And I then take
this job at the Labor Department in the afternoon.
I go to the Labor Department,
and Hodgson sends this down to
me to draft a response
from him to go back to McCraken.
Answering yourself.
Speaking of Davis-Bacon, just to loop back to your comment.
It struck me that suspending
the Davis-Bacon act was clearly
an amazing action at
that time and Nixon wasn't strong.
Do you think he had that in
his back pocket at that point
and that was a more important strategy for him?
Actually, I was a little bit involved in that.
Really, how do you know?
That was designed to hit them in the head to get their attention.
Right. We knew that we were going to back off that.
But is that why he wasn't tough in the meeting is what I'm getting back to.
But yes.
He was not.
He was not.
He knew he wanted to do that.
No, we were talking about that earlier.
He just didn't like confrontations.
He didn't like confrontation, okay.
And also, I mean these
were some of the people in the room supporting him
in the Cambodia invasion and
the Vietnam policy and that
may have led him
to not be as tough
as he was supposed to be in that meeting.
Interestingly, Davis-Bacon has been
suspended twice since then, of course,
after Hurricane Andrew.
It was Katrina, George Bush.
And after Katrina, twice it
was suspended since then, on national emergency grounds.
Bill, ERISA,
when I was Labor Secretary, my
Walter Mitty fantasy was to understand ERISA.
But having said that, I never got there.
I'm curious.
I think there's a difference of opinion.
Larry, you never liked PBGC,
you didn't want any part of it.
Bill, you were at the creation, in part, and an expert in the area.
Well, under the first Nixon term, we
didn't want any substantive
standards for pensions.
We wanted to put in
legislation that would simply
develop a federal fiduciary
standard and we did not
want to, partly because as
you described the moral hazard, partly
because we were afraid if
we put in, I argued
strongly if we put in
any regulation, we would reduce
employers incentive to create
new pension programs, which of course happened.
So we thought it was a
foolish...I thought it was
a foolish initiative, except for
the fiduciary standards, which were...
different state laws were
very confusing about what fiduciary
standards applied to trustees with pensions.
But when I left, then
these left wing types like
Bill got involved and they
push through this pension legislation.
Actually, the first term
Nixon proposal in 1971,
Larry is partially right,
you did have fiduciary
standards, you also had a vesting standard.
We did actually.
That's true.
And that was perhaps a
little bit of a sop towards organized
labor and the individual
retirement account came about.
That was an idea in the
first term and it was one of the great ideas.
There was a study done,
under Ken Dam, about termination
insurance, and it was
as a result of that study,
that Ken and I
decided that it made
sense to support a termination
insurance proposal.
And we did, but the President reversed us.
As I say, the issue that
went to the President was where should it be located,
and the answer that came back was "It shouldn't be had."
And that's the position, that was
the administration position that we took.
Could I ask Bill one quick question?
Please do.
Did Brennan ever get involved
in any of these policy discussions and issues.
Interestingly enough, he got
deeply involved in minimum
wage and the youth
differential proposal and that, of course, that set Meany off.
Brennan then had
a serious problem because he
had no communication with the
AFL-CIO and that was
one of the major raisons d'etre
for him, that was one of the reasons that he was appointed.
So, he did get involved in
that issue and selective
other issues where he felt
he had some knowledge and something to contribute.
We could go on all afternoon,
but the hour draws nigh.
We promised ourselves we'd stop after 90 minutes.
I do want to make one point
in closing because I think this is a very unique panel.
This is our 15th or 16th panel.
You have before you a
group of people who were
leaders 40 years ago
in the area of the Department of Labor.
And today, these people are still leaders.
Ann was one of
the first successful recruitments of women to high-level positions.
She is a huge leader
today, in private enterprise
and in public charities.
Michael is a prominent economist
and has served for a long
time on the Chicago section of the Federal Reserve Board.
Larry, just a fantastic
individual, holder of the Medal of Freedom.
19 years a judge
on the circuit court for
the DC circuit, and even
as a senior judge, within the last month or two,
authored the opinion of the
DC circuit on the challenge
to the Affordable Care Act,
which is on its way to the Supreme Court.
And Bill, youngest of them
all, my classmate from
Harvard Law School, my classmate
as a White House Fellow, assigned
to the Department of Labor, as
I was at Treasury,
goes back to the Department
of Labor, stays there, becomes Solicitor.
Today, he runs the Washington
office of a hugely prominent
national law firm and he's
Boeing's counsel in fighting
the NLRB decision to unjustly
prevent the plant in South Carolina.
But what's phenomenal is 40
years then of leadership
and today of leadership.
And it really a tribute to
the recruitment and the people that were brought into the Nixon administration.
We try to do these forums monthly,
the next one is out at
the Nixon Library on the
All-Volunteer Army. You needn't
travel out there, we hope
to have it filmed, and we thank you for coming today.
Good day to you.