Little Effect on Economy : Biggest Steel Firm Is Shut--and Few Seem to Care
Back in 1959, the last time the American steel industry went toe-to-toe with the United Steelworkers union in a major labor dispute, Washington, along with the rest of the nation, sat up and took notice.
On Friday, after more than 22,000 union workers walked off their jobs Thursday night at the nation’s biggest steelmaker, USX Corp., there was hardly a ripple of concern outside Pittsburgh and a few other steel towns across America. There were no statements of concern from the President; no worries among steel customers in Detroit.
The steel industry isn’t what it used to be. And neither are steel strikes.
The 1959 strike was, after all, a dispute that the White House could hardly ignore: The mammoth steel industry was still the heart and soul of the American economy.
President Dwight D. Eisenhower pleaded with both management and labor and sent Vice President Richard M. Nixon shuttling to Pittsburgh in a vain effort to work out a quick settlement. In the end, Eisenhower brought a halt to the 116-day strike by 500,000 steel workers by invoking the Taft-Hartley Act, which forced the workers back to their jobs.
Today, workers at USX--the new name for U.S. Steel--walked the picket lines alone, unlike 1959. In those days, all the major steel producers bargained with unions together, and all were struck at once. On Friday, even as USX workers and management disagreed on who was responsible for the strike, USX’s competitors said they were moving to pick up business from USX customers.
No one from the Reagan Administration contacted USX Friday, according to a company spokesman, and the White House did not put out a press statement expressing concern over the strike. “I’m not aware that the government has interceded in any way,” a USX spokesman said Friday.
But for USX and its workers, the current walkout is more important than anything in the history books. No new contract talks have been scheduled since the walkout began, and the two sides remain far apart on most key issues, including the company’s central demand for steep concessions it claims it needs to remain competitive.
Lack of Progress
In an interview Friday, Steelworkers President Lynn Williams acknowledged that no progress toward resolving the dispute has been made since the walkout began.
In fact, the two sides can’t even agree on whether the walkout is a strike by the Steelworkers or a lockout by USX.
Just before the union’s strike deadline Thursday night, bargainers for the Steelworkers had offered to extend the existing contract and keep its members on the job. But USX rejected the offer, and the union then claimed that its workers were forced off the job through the company’s unwillingness to continue bargaining.
The union set up picket lines at plants in suburban Pittsburgh; Fairless Hills, Pa.; Lorain, Ohio; Birmingham, Ala.; Gary, Ind.; Chicago; Baytown, Texas; Salt Lake City, and Duluth, Minn., with workers everywhere accusing the company of staging a lockout.
Wants to Claim Benefits
The union said that its members should be allowed to collect unemployment benefits because they were not really on strike. USX replied that the union only made the contract-extension proposal to give its members ammunition in claiming unemployment benefits.
Meanwhile, economists around the country minimized the strike’s potential impact on the economy, especially since there is still a huge glut of steel-making capacity at most of the other major steel producers. In fact, the steel industry’s biggest customers, Detroit’s auto makers, confirmed Friday that they won’t be hurt by the strike.
“The numbers are simply too small to get anybody that excited,” noted Robert Crandall, a Brookings Institution economist who studies heavy industry. “This is a company that is a lot smaller than it was in 1959.”
Today, the entire steel industry employs only 189,600 workers, compared with 515,000 27 years ago; domestic steel production last year totaled just 88 million tons, virtually unchanged from 1958, when the nation’s economy was far smaller. Crandall adds that the steel industry’s share of the gross national product is steadily declining.
Other Materials Available
Other observers note that the increasing use of plastics, aluminum and other alternative materials in manufacturing, along with the flood of imported steel into the American market and the dramatic rise in imports of foreign manufactured products that are made with foreign steel, have all contributed to steel’s fall.
“It’s a shrinking market, and imports have taken a larger share of that shrinking market,” said the Rev. William Hogan, a steel expert at Fordham University.
As a result, there aren’t enough customers to support all of the American steel mills still operating, so the strike will do little besides reduce the huge glut of domestic steel on the market.
Competitors May Benefit
“The main effect of the strike will be on competitors of USX, in that they will benefit and increase their market share,” says John Jacobson, steel economist with Chase Econometrics, an economic forecasting firm.
“But in terms of any shortages or impact on prices, it is very unlikely,” Jacobson added. “The relative importance of steel in the economy has declined, and steel demand has lagged far behind the growth in the rest of the economy.”
“If there were no steel anywhere, this strike would be . . . important,” said Ben Fischer, a labor expert at Carnegie-Mellon University and former Steelworkers officer. “But today, there are no circumstances man could create where you could have a steel shortage.”
