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Statement About New Composition of Pay Board Membership Following Resignations of Certain Labor Members

March 23, 1972

THE SPIRIT of voluntary cooperation is the key to victory in the battle against inflation. I emphasized this point when I first announced my new economic policy last August and repeated it last October outlining the price stabilization program. I described at that time some of the sacrifices which millions of Americans were making in the fight against rising prices. And I indicated that our success in this struggle would ultimately depend on the willingness of all our people to "put the public interest ahead of the special interest"--and thus to continue that good fight.

That is why the decision of three of the five representatives of organized labor to resign from the Pay Board is a disservice to the American people.

Since it was established last October-at the specific urging of organized labor-this tripartite Board has been a central part of the Phase 2 program.

Them has been much strong evidence that this program is succeeding. In the 6 months from August 1971 to February 1972, the rise in the Consumer Price Index was cut to an annual rate of 3.3 percent, down from a 4. 1 percent increase in the previous 6 months. Real, spendable weekly wages after taxes rose 5.4 percent in the last 6 months, compared to a 1.3 percent increase in the previous 6 months. In the last 6 months, seasonally adjusted employment rose 1,123,000, while unemployment declined by 234,000.

Any program of controls in a free economy will have its ups and downs. But what is important is that we are moving in the right direction. The wage and price control system is working. But continued cooperation of all Americans is needed if we am to win the battle against inflation.

In these circumstances, the decision of three of the labor representatives to walk off the job of fighting inflation is totally selfish and irresponsible.

The west coast longshoremen's settlement was the only specific case referred to in yesterday's statement by the executive council of the AFL-CIO, a statement which severely criticized the general pattern of Pay Board decisions. The Pay Board disallowed a 20.6 percent compensation increase which Mr. Meany and his colleagues supported but approved a 14.9 percent increase, even though it was more than double the general limit which the Board had set.

The Pay Board was right and Mr. Meany was wrong on this issue.

The general pattern of decisions of the Pay Board is one with which the labor representatives have largely agreed. of the 54 Pay Board decisions to date, labor has agreed in 36 of the votes--two-thirds of the total. It has disagreed with only 13 decisions--or 25 percent. In one instance labor's representatives were split and in four instances they abstained. Over half of the Pay Board's decisions have been unanimous, and of the eight major wage cases voted on by the full Board which have been the most controversial, labor has agreed with the outcome in five. When the labor representatives say that this general pattern is one of "flagrant favoritism," they must recognize that the pattern is one to which they have generally agreed.

It is true, of course, that labor's representatives have not prevailed in every instance--and that they did not succeed in their effort to uphold the full 20.6 percent longshoremen's increase. In a free society no one is right all the time and no one can have his way all the time. All participants must be ready to accept a reasonable amount of give and take.

Organized labor's views have not been ignored by the Pay Board. In fact, they have usually been accepted. But we cannot and will not allow any single group-business or labor--to be the exclusive judge of fairness in its own case. The public interest must come before any special interest.

Our economic policies will continue to require certain sacrifices of the American people. But I am convinced that these policies are also in the best interests of all the American people. I am especially confident that they serve the best interests of our working men and women. For wage earners know that wage increases which are inflated are illusionary wage increases--they are inevitably canceled out by rising prices.

Although a few labor leaders have chosen to reject their public responsibility and have sought to justify their action with standard political rhetoric, this Administration will not accept an "antilabor" label. On the contrary--there can be no more "pro-labor," pro-workingman stand than a firm decision to protect the buying power of the wage earner's dollar.

Inflation is a dangerous and difficult enemy. We have set the course in the battle against that enemy--and our decisions have won the overwhelming approval of the Congress and the American public. I am determined to stay that course; I shall not be deterred by the disaffection of a few union leaders who represent only 17 percent of America's 80 million wage earners.

My obligation is to serve the public interest--and the public interest will be served.

I have directed the Pay Board to continue, but as a single public unit, with those labor leaders who wisely wish to remain balanced by a reduced number of business leaders. All will be public members with the special perspectives of labor and business represented in their deliberations.

I have directed the Price Commission to proceed on course, working alongside the Pay Board to cut inflation in half by the end of this year.

All rules and regulations remain in full force.

The fight against inflation will go on until the American consumer and the American worker win the fight.

Note: On March 22, 1972, three members of the Pay Board, George Meany, president of the AFL-CIO, I. W. Abel, president of the United Steel Workers, and Floyd E. Smith, president of the International Association of Machinists and Aerospace Workers, resigned. The next day, Leonard Woodcock, president of the United Automobile Workers, also resigned from the Board.

Before issuing the statement, the President met at the White House with members of the Cost of Living Council to discuss his decision on the new composition of the Pay Board.

The White House also released the transcript of a news briefing by George P. Shultz, Director, office of Management and Budget, on the President's statement and Executive Order 11660.

Richard Nixon, Statement About New Composition of Pay Board Membership Following Resignations of Certain Labor Members Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/254557

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