lowed. With restrictions upon check-off, upon welfare funds, ready opportunities for snagging the negotiations in technicalities are freely offered by law. These additional features break down organizational unity and make the union less effective as a bargaining representative. Furthermore, the union shop under the law so narrowly limits the relationship between the union and the employee that there is little resemblance to union security under it.

Union security is meaningless without some requirement for membership as a condition of employment so long as union rivalry and employer hostility remain. The degree of security necessarily varies with the requirements of the individual industry. The right of the union to request, and the right of the employer to discharge upon this request, employees who have failed to keep their good standing, is an integral part of union security.

Since the employee may be discharged only for nonpayment of dues, these provisions have the effect of interfering with a union's regulation of its own internal affairs and greatly impair the powers of unions to impose effective conditions, qualifications, or responsibilities upon their membership except with respect to payment of dues and initiation fees. These provisions in effect render illusory the guaranty contained in section 8 (b) (1) that "the right of a labor organization to prescribe its own rules with respect to the acquisition or retention of membership therein" shall not be impaired.

The above-described effects are aggravated by the provisions of the Labor Management Relations Act which permit stricter State laws. on union security to prevail. The number of States which prohibit not only a closed shop but all other forms of union security provisions jumped from 2 to 13 States during the time the Labor Management Relations Act was being considered and passed. The laws of six other States at the present time provide various restrictions and conditions in connection with union security. Section 14 (b) encourages further extension of such prohibitions. Therefore, while only the closed shop is banned by sections 8 (a) (3) and 8 (b) (2), with which we are dealing, the potential effect of section 14 (b) can well be the elimination of many other types of union security arrangements in the future in many of the States.

This multiplicity of standards applicable to employers admittedly subject to Federal jurisdiction is unwise and destructive of stability in labor relations, since it results in different rules being applied to members of a single multi-State bargaining unit merely because they live in different States. This means that members of the same union working for the same employer will be accorded different treatment. In Giant Food Shopping Center, Inc. (77 N. L. R. B. 791, 1948) a majority of the Board held that despite the existence of established multi-State bargaining units, union-shop-authorization elections will be conducted only among those employees of the unit who are found in States permitting union security.

To reach this result, it was found necessary for the Board to hold that the unit appropriate for collective bargaining and the unit appropriate for union security are not necessarily identical. This results not only in confusion and uncertainty for both unions and employers, but the possibility that long-established bargaining units may be broken up. Furthermore, the question can well be raised whether a union-shop election can validly be held in a unit other than one found

appropriate for collective-bargaining purposes. Any rule of law which so disrupts labor relations, and so drastically curtails the scope of collective bargaining in industries in or affecting interstate commerce is patently bad.

The provision requiring a majority of those eligible to vote to authorize a union-shop agreement is, as far as we have been able to determine, unique in electoral procedure. Each employee who does not care to vote, or who is laid off, or absent due to illness or for any other reason, is, in effect, counted as voting against a union shop. Moreover the existence of this provision has the effect of seriously impairing the secrecy of the ballot, since an individual's presence at the polls is tantamount to an announcement that he is voting in favor of the union shop. Furthermore, where unions fail to win union-shop elections due to a poor turn-out, caused by any one or combination of factors discussed above, they are prevented from asking for another such election for another year. All these hurdles must be overcome by a union before it may obtain the inclusion of a union-shop provision in its contract; and the union's success in the election does not obligate the employer to grant the union shop.

The possible extent of the disruption of stable labor relations which can result from the provisions of the Labor Management Relations Act relating to union security is reflected in the fact that in 1946 over 75 percent of the approximately 15,000,000 employees working under the terms of collective-bargaining agreements were covered by some form of union-security provision. Nearly 5,000,000 workers were employed under a closed shop or a union shop with preferential hiring-Bureau of Labor Statistics, Extent of Collective Bargaining and Union Recognition, 1946.

Historically, the closed shop has developed out of reactions to a series of economic pressures on both employees and employers. From the standpoint of employees, where there was a limited number of jobs it was natural for union men to attempt to arrange for the employment of union members before others could be permitted to vie with them for work. Where also the union had gained certain benefits for employees, it was not unnatural that it should seek to require all the beneficiaries thereof to share the duties of carrying forward the organization, and that it should seek to eliminate so-called "free riders." Even after the passage of the Wagner Act, which protected union members from being discriminated against where they could prove such discrimination, union members found the closed shop a useful economic tool against many subtle forms of discrimination which employers might practice against them.

For employers, the closed shop guaranteed a supply of competent employees as well as a source from which they could be recruited easily. In times of labor shortage the employer could also depend on the regular union workmen to forego bonus rates for steady employment.

The Taft-Hartley Act legislated away the ability of a union to enforce a closed shop without in any way meeting the economic problems of both labor and management out of which the closed shop arose. The deleterious effects of this legislation in some industries are reviewed above. A return to the Wagner Act will enable all segments of the economy to return to a situation satisfactory to labor and to the management groups which sincerely desire labor peace together with bona fide collective bargaining.

The satisfactory character of the closed-shop relationship between labor and management is attested to by authorities in the field. Prof. Sumner H. Slichter, of Harvard University, has said:

The employer is likely to have more freedom in shops where the status of the union is established than in one where its position is more or less precarious. Where the union is not secure, it is compelled to attempt to resist the employer's discretion at every point where he may discriminate against union members in favor of nonmembers. In particular, as pointed out earlier in this chapter, the union must endeavor to restrict his control of lay-offs. The union virtually has no choice but to treat the control of lay-offs as a major issue. Where the closed shop exists, however, the union has less at stake in many decisions of management. Hence it is not in a position to insist upon controlling these decisions. This is why more managerial discretion may be permitted in a closed shop than in an open one (Union Policies and Industrial Management, by Sumner H. Slichter, the Brookings Institution, Washington, D. C., 1941, p. 95)

Recent studies of successful labor-management relations in plants in various parts of the country, such as those conducted by the National Planning Association, have emphasized the importance of the security of a union to the maintenance of stable labor relations. This security depends upon freedom from rival union assaults, employer attacks, and Government interference. Important to the achievement of protection against these kinds of attacks, these studies disclose, are the closed shop and other types of union security agreements. The studies. document by reference to the history of concrete labor-management situations, what has been said above with reference to the advantages of union security from the standpoint of both employers and labor organizations.

The closed shop in the past has contributed to long records of industrial peace in a number of industries. The women's clothing industry employing 380,000 members of the International Ladies' Garment Workers Union for example, has not had a major strike since 1933. Another similar long record of peaceful labor relations was established in the printing industry.

In an investigation of the closed shop made just before the war, the National Industrial Conference Board reported that the closed shop"places the union in a better position to keep its agreement, eliminates coercing of its employees, gives employees greater feeling of responsibility and interest in their jobs makes it possible to hold the union responsible for the action of its members (NICB, Studies in Personnel Policy, No. 12, March 1939).

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The stake of both employers and unions in effective union security is clearly demonstrated by the fact that notwithstanding the provisions of the Labor Management Relations Act, closed shop contracts continue to be observed over a wide area of industry.

The committee is convinced that in the light of the developments which have occurred under the Labor Management Relations Act with respect to union security the matter is not one to be dealt with by legislation, but is rather one which should be permitted to be developed through the processes of free voluntary collective bargaining between employers and labor organizations.

One aspect of the problems raised by the act's union-security provisions which has been of particular concern to the committee is that the act undertakes to specify limitations on the right of labor organizations to discipline its own members. The mechanism which the act employs to accomplish this purpose is found in the provision which restricts the power of a union to secure the discharge of em

ployees under a union-shop agreement, except for nonpayment of dues or initiation fees. The danger of such a provision lies not only in the fact that it undermines the union's authority over its members but also in the precedent it establishes for legislation regulating in a similar manner the relations between employers and their employees. The committee feels that the Congress will wish to pay particular attention to what both Dr. Leiserson and Professor Feinsinger had to say on this matter when they testified at the committee's hearings. Dr. Leiserson pointed out:

Now, they have relations with the individual, and if you are going to start this business of regulating everything, every injustice, to be fair and not one-sided, you would also have to put in the law to regulate the rights of the individual employees against the management organization. That was not done.

I do not think you can do it that way. I do not think it is American to do it that way. The theory of collective bargaining is that all of those matters, when the people are properly organized on both sides, should be worked out by themselves and not bring the Government into it (transcript of hearing before Senate Committee on Labor and Public Welfare on S. 249, February 23, 1949, pp. 51685169).

Professor Feinsinger emphasized another aspect of the same problem. He stated that

* it does not take too much imagination to predict that union leaders, pressed by extremists to pick up the Taft-Hartley approach, may be forced to demand similar legislation in labor's interest. Such demands will not go without precedent. I am informed that legislation in Austria, Czechoslovakia, and Germany gives unions a direct voice in the hiring and firing of employees, without a closed shop, and with no greater proportion of union organization than in America; that in Austria the law extends to discipline; that in Germany discharge not warranted by economic or technical conditions is forbidden; that Norway and Venezuela require severance pay; that Brazil, Chile, and Czechoslovakia (before 1948) require that profits be shared with the employees; and so on.

I do not say that legislative control of the employment relation in its entirety is good or bad. But I am certain that the proponents of the act did not intend or foresee such a result. Yet they have started the ball rolling in that direction, and who is to say where and when it shall stop? (transcript of hearing before Senate Committee on Labor and Public Welfare on S. 249, February 19, 1949. pp. 4298-4299. Many of the same considerations which militate against the present statutory limitations on the closed shop and show the clear advisability of enabling free collective bargaining to govern in this sphereapply equally to the criminal provisions of the law bearing upon the check-off. In 1945 an estimated 51⁄2 million workers were employed. under some form of check-off provision. Yet the act has imposed serious administrative difficulties upon securing wage deductions to fulfill the obligation of union members to pay union dues. At the same time, deductions to discharge other employee obligations, such as insurance and various forms of security payments, are accepted as a matter of course. Here again the Labor Management Relations Act has made an unwarranted invasion into the field of collective bargaining and the realm of internal union affairs.

4. Health and welfare funds

Health and welfare funds have become, since the war years, an increasingly important subject of collective-bargaining negotiations. These plans contribute significantly to security in old age. Employee benefit plans protect the American worker, in addition, against loss of income during illness, and the consequences of insufficient financial resources to meet medical care costs.

The present income requirements of old-age security are far in excess of the income provision now made for such security by existing social-security programs. According to estimates of the Federal Security Agency, an elderly couple, as of June 1947, would have required an income of approximately $1,540 per year, or about $128 monthly, in order to achieve

what, according to prevailing standards, is regarded as just enough

for essential family needs (Federal Security Agency, Social Security Administration, Bureau Memorandum No. 67, A Budget for an Elderly Couple, table 2, average for eight selected cities).

At October 1948 costs, on the same basis, an average of approximately $136 per month would be required. By contrast to this estimate of requirements the average retired worker with a dependent wife received $39.90 monthly under the old age and survivors' insurance program in October 1949. Families receiving between $2,000 and $3,000 of income in 1944, for example, were able to afford hardly more than 40 percent of the medical care available to families with incomes of $5,000 or more in that year, despite the greater impact of disabling illnesses at the $2,000 and $3,000 level. Under such circumstances, pension and retirement plans evolved through collective bargaining have an important and necessary role in supplementing the basic level of benefits provided by Government old-age security programs.

The supposed justification for the restrictions placed on welfare funds by section 302 was the alleged possibility of diversion of funds from the purposes for which they were created. This distrust of union leadership found no basis in the factual testimony submitted to the Congress prior to the enactment of the Taft-Hartley Act. All evidence had indicated that health and welfare plans had been administered competently and honestly. Moreover, even were union leaders so inclined, they could be prevented from diverting such funds by the ordinary processes of law through the courts. Numerous courts have held that not even a majority of the members of a union could vote, against the wishes of a minority, to divert sick and burial benefit funds and other union funds from the purposes to which they were originally dedicated (Liggett v. Koivunen, 23 L. R. R. M. 2035 (Minn. Sup. Ct. 1948). See Low v. Harris (90 F. (2d) 783 (C. C. A. 7)); See Harris, ex rel Carpenters Union v. Backman (160 Oreg. 520, 86 p. 2d 456 (Oreg. Sup. Ct.)). These decisions bore no references to the Labor Management Relations Act, 1947, and rested solely on equitable principles established under State law by judicial decision. It should also be noted that a number of significant welfare funds were prior to the enactment of the Labor Management Relations Act, 1947, either jointly administered by employers and unions or are administered primarily by an insurance company (Health Benefit Programs Established Through Collective Bargaining, Bulletin 841, Bureau of Labor Statistics, 1945). The wide variety of plans previously adopted has given evidence of a need for the flexibility available only through the workings of free and unrestricted collective bargaining.

Were the pattern of welfare plans required in section 302 adopted by mutual consent a free and unrestricted collective bargaining procedure, it might not be intrinsically bad as applied to some situations. As a superimposed procedure, however, it is inflexible, restrictive, and in many respects confusing. The need for flexibility in the adminis tration of such plans is illustrated by experience in men's clothing