1. The Industry1

The facts in this report relate generally to the basic steel industry-the blast furnaces, steel works and rolling mills whose main business is making and finishing steel. Mining and shipping, although in many cases owned or controlled by the companies which produce steel, are classified as separate industries. The firms whose main business is fabricating steel are also considered outside the basic steel industry. A small proportion of the workers engaged in the strike are employed in such related industries, outside basic steel.

There are more than 250 producers that make and finish steel. Of these, 80 are producers of steel ingots, with 146 steelmaking plants in 29 States. Steel companies differ in the number of operations they perform. Many, known as integrated companies, produce pig iron, make steel, and form steel products by rolling and finishing. These companies produce the great bulk of the steel and employ most of the workers in the industry. Other companies, known as semiintegrated companies, produce various types of steel from purchased pig iron and scrap. A third group rolls and finishes purchased steel, and a fourth produces only pig iron to be sold to semiintegrated companies and foundries.

Some iron and steel plant products, such as rails, pipe, wire, and nails, can be used directly without further manufacturing. However, the bulk of the products shipped from steel plants, such as sheets, bars, plates, and strips, are further fabricated in plants of other industries into hundreds of different products.

The basic steel industry is mainly concentrated in the North and East, although steelmaking capacity has recently increased greatly in the Far West. Pennsylvania accounts for one-fourth of the total capacity and Ohio for one-fifth; in both cases, their relative importance is somewhat less than it was in 1947. The Pittsburgh-Youngstown area is the leading steel center. Other large plants are in Buffalo, N.Y.; Johnstown, Bethlehem, and Morrisville, Pa.; Sparrows Point, Md.;

the Chicago area; Cleveland, Ohio; and Birmingham, Ala. About a third of the industry's labor force works in Pennsylvania. The distribution of total employment in December 1957, which was a fairly representative month in a high-activity year, is shown on the map.

2. Some Economic Characteristics

Our country's industrial power, the basis for its high standard of living and its military strength, is closely related to our great steel production capacity. Almost a third of the world's steel ingot output is produced in this country. Many of our important industries depend on current supplies of steel.

Steelmaking capacity has risen much more rapidly than has our population. There are now available 1,680 pounds of capacity per person as compared with 1,240 pounds in 1940 and 1,380 pounds in 1947. Output, however, has fluctuated widely with changes in general business conditions.

Plants in the steel industry are typically large. More than two-thirds of all the employees are in plants with over 2,500 wage and salary workers. The four largest companies employ more than half of the industry's workers.

Capital investment per production worker has more than doubled in recent years, from about $9,000 in 1947 to about $20,000 in 1957; for manufacturing as a whole, the percentage rise was probably somewhat smaller. The level of investment per worker is notably higher in the petroleum, chemicals, and tobacco industries, but is lower in most other manufacturing industries.

The largest customers of steel are the automotive, construction and building material, machinery, containers, and oil and gas industries. Railroads, once a major consumer, have taken relatively small quantities of steel in recent years.

1 EDITOR'S NOTE.-The accompanying charts may be associated with their corresponding sections of the report by comparing the encircled numbers on the upper left of the charts with the corresponding number in the text heads. The supporting data for the text and charts are contained in a set of Supplementary Tables to Background Statistics Bearing on the Steel Dispute, issued in August 1959.

3. Employment

Total employment in the basic steel industry has risen only slightly during the postwar years. The number of production workers has fluctuated considerably, with little net change. The number of administrative, professional, and clerical workers, on the other hand, has risen substantially.

In the first half of 1959, output averaged 50 percent more than in the first half of 1947, but production-worker employment increased less than 1 percent, or only 2,000, while their manhours rose nearly 5 percent. The administrativeprofessional-clerical group increased nearly 50 percent, or 34,000.

A special tabulation of total employment in mid-1956 and autum 1958 shows that practically all of the recession drop of 100,000 took place among production workers. Unemployment rates in the primary metals industries (mainly steel) rose from about 3 percent in 1957 to 13 percent in 1958, but have recently dropped back to about 3 percent.

The average age of production workers in 1957, according to the American Iron and Steel Institute, was 42 years; 32 percent were 34 years old or less, 28 percent were between 35 and 44, 22 percent were between 45 and 54, and 18 percent were 55 and over. The average male worker in steel was

a year and a half older than his counterpart in manufacturing as a whole, according to the census of 1950.

Over half the production workers in 1957 had more than 10 years of service with the same company. In 1957, a very good year, 88 percent of the production workers were paid for 45 or more weeks (including vacations), but in the recession year of 1958, there were only 71 percent who were paid for that many weeks, according to the American

Iron and Steel Institute. The number of dependents claimed by steel workers in 1958 averaged 2.1.

Workers employed by most of the plants in the industry (with 92 percent of total ingot capacity) are organized by the United Steelworkers of America. Almost all of the rest of the industry is organized by other unions, most of them independent.

4. The Trend of Steel Wages

Gross hourly earnings in steel rose $1.43, or by 85 percent, from January 1950 to May 1959. Basic wage rates in steel (excluding the effects of premium pay for overtime, etc., and also changes in incentive earnings and in skill levels, but including cost-of-living allowances) increased:

$1.08 an hour, or 66 percent, for all wage workers combined as a group.

$.90, or 73 percent, for steel common labor. $1.25, or 64 percent, for toolmakers.

$1.56, or 60 percent, for rollers (grade 32).

In this same period, real hourly earnings (i.e., gross earnings corrected for changes in purchasing power) rose by 50 percent.

Real net spendable earnings for a worker with three dependents (gross earnings corrected for changes in purchasing power and in withholding and social security taxes) rose by 44 percent.

From January 1950 to the summer of 1959, steel wages as a whole rose by greater percentages and by greater absolute amounts than wages in most of the economy, no matter what measure of wage trend is used.2

EDITOR'S NOTE.-In computing the percentage increases shown in the lower right-hand section of chart 4, the increase in cents per hour has been compared with estimated straight-time earnings in the industry, which includes incentive earnings and shift differentials where such payments are found.

5. The Level of Steel Wages

Wage levels can be compared in terms of earnings or rates. The wage rate is the basic payment per hour, day, or week that is guaranteed in the employment contract. It relates to a particular job or occupation. Earnings include, in addition to the basic rate, incentive payments, premiums for overtime or work on late shifts, bonuses, etc. Average earnings for an entire industry are influenced by the proportion of workers at various skill levels. These proportions vary widely among industries. Basic steel employs a relatively large proportion of workers in skilled occupations.

Measured in terms of average hourly earnings, steel wages are higher than those in most other industries. The May 1959 average of $3.10 in the steel industry compared with $2.23 in manufacturing as a whole, and $2.68 in automobiles.

Wage rates, job for job, compare more nearly with those in other high-wage industries, such as automobile production and petroleum refining. For example, the hourly rate for common labor in the steel industry is $2.13. Rates for unskilled labor paid by a number of major employers for whom information is available range from $2.00* to $2.47. Similar comparisons for maintenance machinists and toolmakers are presented in the table on page 1095. Such comparisons must be interpreted with caution because of possible differences in job content and working conditions, even for the same job title.

Many steel workers (about 60 percent of the total) receive incentive pay, which is less commonly found in most other high-wage industries. Incentives may add 10 percent, 15 percent, 20 percent or more to basic rates. They are commonly associated with greater worker effort and increased production. In basic steel, first quarter 1958 and 1959 data indicate that incentive earnings

add on the average from 6 to 8 cents to the hourly rate in labor grade 2 in which common labor is classified; 28 to 34 cents in labor grade 16 which includes maintenance machinists; and 33 to 44 cents in labor grade 18 which includes toolmakers. However, information is not available to indicate whether the rates for these specific occupations are increased by incentive earnings in the same degree as the labor grade as a whole.

6. Annual Earnings

Annual earnings of wage employees (the category of the American Iron and Steel Institute which corresponds most closely with the Bureau of Labor Statistics category "production workers") in the basic steel industry averaged about $5,350 in 1957. With reduced production levels and employment, this average fell to about $4,840 in 1958. Roughly the same proportion earned $6,000 or more in both years; 30 percent in 1957 and 28 percent in 1958. However, while fewer than 9 percent earned less than $3,600 in 1957, 22 percent earned less than this amount in 1958.

This summary and the chart are based on information covering wage employees with seniority, both at the beginning and at the end of the year. About 425,000 are included for each year. The data are provided by the American Iron and Steel Institute. 5

EDITOR'S NOTE.-Since the preparation of the chart on Gross Average Hourly Earrings Comparisons, May 1959, final earnings figures have been published; for the petroleum refining and copper refining industries, these figures, $2.98 and $2.32, respectively, represent 1-cent changes from the preliminary figures shown on the chart.

EDITOR'S NOTE.-Since the preparation of this text and the accompany. ing table on p. 1095, information has become available indicating that the current unskilled labor rate for Commonwealth Edison is $2.12, which would mean adjusting the lower end of the range shown in the text to $2.08.

'EDITOR'S NOTE.-These data exclude unemployment compensation and supplemental unemployment benefit payments, as well as certain fringe benefits such as pensions and insurance.