the gun smuggling sting operation. it allowed hundreds of firearms to cross the u.s.-mexico border. some were found at crime scenes. the richard nixon foundation hosted a forum on the labor and employment policies. labor secretaries talked about efforts that pension reform, affirmative-action, and the relationship between the white house and labor unions. from the national archives, this is 90 minutes. >> good morning and welcome to another in our series of legacy forums about the nixon administration's ideas and innovations. i am here on behalf of the richard nixon foundation which

co-sponsors these forums. what makes the nixon administration interesting is it marks the beginning of the foundation of the modern president. what happened in the course of the nixon administration as that policy-making was drawn from the cabinet into the white house. before, the cabinet department ran their own areas except on giant issues. beginning with the administration and lasting through today, policy is made in the white house. while the cabinet has input, they execute decisions made within the white house. how did that come about? for reorganization. first the revitalization of the national security council where foreign policy was made within the white house. second, the creation of the

domestic council under john ehrlichman which did the same thing on major domestic issues. finally, the transition of the old budget to the office of management and budget which counted the money and help to department's reach accomplishments. that was under george shultz. he was the first director of the office of management and budget. before he was director, and he was secretary of labor. we're going to find today, and he was an ideal cabinet member. the discussion today on labor and employment issues stems from the innovation and leadership of george schultze. we co-sponsor these forums with the national archives. we are thrilled to be here to

talk about this and co-sponsor the archives. david is a librarian. he was head of the new york public library before taking over the archives. he was a librarian at mit and duke university. he is a scholar and is a genuine pleasure to be cosponsoring these events with. with him. david? good to see you. [applause] >> thank you. i want to add my welcome to all of you here. we are delighted for the second time in less than one month to work of the election -- nixon legacy for a person over the past the dead years, have co- sponsored 15 of these forums bringing together of alumni to

examine and explore aspects of the 37th president domestic and foreign policies. for many today the nixon years are so near and so far. 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 are being faced in their modern aspects. as the happy fact, 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 million of them for the nixon administration not including tape recordings and other historic material. those are available now and forever to citizens and scholars. the foundation has a unique historical resource -- the men and women who actually created those papers. that is what these forums do. the richness of the insight and analysis will also be available here and will increasingly become a central part of the nixon administration archival record. today's forum includes three disks think if participants. she served president reagan as our 19th secretary of labor. before that she had been a secretary of interior and

assistant secretary of the treasury. she served as director of the office of public administration at environmental protection agency. since leaving government services in 1989, she has been president of the federal city council here in washington, chairman of the aspen institute, and chairman of the rand corp. board of trustees. among the several boards in which she now serves as the reagan presidential foundation -- ronald reagan presidential foundation. is my pleasure to welcome her. [applause] >> thank you, david. good morning all. we are going to be talking this morning about the nixon administration's labor and employment policies, a topic that might at first sound rather esoteric or even as the republican president, it could be a short topic. i think you will find especially

through the eyes of today's analysts who were there at the time and to actually president of the creation so to speak, it is a surprisingly interesting and lively topic. it and deals with the same issues we are dealing with today. it is remarkably timely although one's thoughts may travel to yesterday are today's newspaper. with labor and employment issues as with so many issues in the late 1960's and early 1970's, the richard nixon administration was dealing with the modern aspects of the issues that have remained true and in many cases remain intractable over the last four decades. as earlier forms have not shown, this is true with environmental concerns, energy independence, health care,

welfare reform, and many other domestic issues. the 1960's and 1970's when the scallop kismet changes. economic changes, technological changes, and no less but entirely need to that time, counter cultural changes that gave the new and modern face too many of the americas. old problems. by the time richard nixon was elected in 1968, he had already been a major player in the american politics for going on one quarter of a century. he served as congressman, senator, vice president, was a candidate for governor, and served 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. has he later said, he and another newly elected democratic congressman john f. kennedy of massachusetts sat like bookends at the far end of their

respective sides of the education and labor by is. they were involved in the controversial part act which is still in the fact today and a center of controversy he had the opportunity to work with eisenhower's respected and successful secretary of label, james mitchell. he was a diamond -- he was eight democrats. -- he was a democrat during world war two. he was seen by labour as a management side of the table. labor did not really trust him. he was an opponent of discrimination and employment. he believed and labor management corporation. he was concerned about the plight of migrant workers. he is often referred to as the

social conscience of the administration. and aside in 1987 when i was becoming secretary of labor under president reagan, i carefully scheduled a meeting with lane kirkland who was head of the afl-cio (in our conversation, i asked them who was the best secretary of labor ever. he said that you will be surprised. not knowing at the time, i suppose, he said he was a republican. jim mitchell, labor secretary under president eisenhower. he said he had the president's ear, and, two, he would not mind coming down the hall with a bottle of scotch. i should add maybe if you can put this off the record, i can do both. they became close friends.

nixon seriously consider the labor secretary as his running mate in 1960. especially after working behind- the-scenes on the behest of president eisenhower with secretary mitchell who played the public role on some of the steel strike issues that were current at that time. i am sure they will be touched on today. his personal intervention trying to help settle the bitter 1969 steel strike one him considerable and the reluctant respect from labor. with the election of jfk and then all the p.j.. with the arrival of the great frontier and great society. it seemed like the traditional alliance was solidly cemented. union leadership and the money lined up behind the democratic standard bearers. in 1968, richard nixon's opponents hubert humphrey

watched his presidential campaign with a speech at the labor day parade. labor is a $6 million came close to pushing hubert humphrey into the white house. the forces that would challenge and replaced the traditional labor democratic allies were already at work. richard nixon was there to help recognize and encourage them. despite labor's financial support for humphrey, some 30% of union members had actually voted for nixon. but january of 1969 when he was sworn in just on 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. the generation of disillusioned caused by the counterculture roll 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 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. and 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 railt 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%. 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 u.s. factories to foreign subsidiaries between 196 6 and 1971. 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 meanie the average age of the afl-cio executive council was 63. putting it in the same league as the vatican curea and the chinese politburo. younger union members were restless. the average weekly wage had risen from $95 in 196 5 to $171 in 1970. but 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. 25% were worried about their safety because there were 14 ,000 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 movements have seriously shaken union solidarity. many union members were fiercely patriotic. and they watched aghast as college students waved the 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 in many industries, the threat of competition from minority workers suddenly became an overriding issue. all creating the platform for a most active, most innovative and 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 member oilers president nixon records a 1972 golf game -- memoirs president nixon records a 1972 golf game and it included treasury and former labor secretary george schultz, secretary of state bill rodgers, and afl-cio president george meanie. at the 19th hole they sat for an hour talking and smoking cigars. as they walked to the waiting cars, meanie told nixon that he wasn't going to vote for him or for george mcgovern. but you'll be doing all right with the meanie family, he said. because his wife and two of his three daughters would vote for

him for nixon. then crusty old meanie 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 want to 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 nixon administration predecessors who served as secretary of labor. president nixon's first labor secretary was george schultz. as the legacy forms 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 schultz 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 nondiscrimination 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 would be moderating

this panel, and i told him who was on the panel. and he said really? all those guys worked for me. indeed they did. secretary schultz was followed by james hoden who served from july of 1970 until 1973. he 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. 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, comprehensive employment

and training act, and the rehabilitation act in 1973, and erisa, employee retirement income security act in 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's 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 killberg in the headlines today. i'll just remind you of the positions they held during the time we will be discussing. bill killberg has been a white house fellow. special assistant to labor secretary schultz, when president 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 subcabinet position in the united states government. not as well-known, i share with you a small story, bill and his wife, bobie, were both white house fellows in 1969 to 1970. with bill working for george schultz at labor, and bobbie working for john erlichman on the domestic council on 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 schultz toasted them with the observation that, 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 of 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 at research as -- at the department of housing, 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 cole 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 oh, 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 ninth 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 how importantly 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 who will make some remarks and then larry and then bill and then going to 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 an economic standpoint is that it was a completely different environment from today. the major issue, the major concern of the country as ann alluded to was inflation. during the 1960's, we had johnson administration had 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 1960's. i joined the administration in the summer of 1969 as ann said 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% 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 could do something about inflation was enormous. actually, at this point, the business roundtable was formed. today, the business roundtable is major lobbying group for large multinational companies. and actually established as the construction users' anti-inflation roundtable. chaired by roger blow who was 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 1969, the president established a cabinet committee on construction chaired by former 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. and again in september of 1969, the president by executive order established the construction industry collective bargaining commission. which was a group that was set up labor, management and public to deal with structural problems in the construction

industry. it was john dunlap 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 schultz. and i became the second executive director on that construction and 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 shp in the -- an issue in the next

election. the democratic congress could say the president had the authority to do something about inflation. and he didn't do it. well, the construction -- at the same time, the leaders -- 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 decision. they couldn't agree voluntarily to reduce wage increases. this would be settling out their members but they knew offer time this was going to lead an erosion of unionized construction and the growth of nonunion sector in the industry. and that's exactly what had happened over the years. they knew their self-interest. so we needed -- john dunlap working with the members of the construction industry collective bargaining commission came up with a plan to have wage stabilization in the construction industry. and the union leaders needed some type of political cover in

order to implement this. i mean, 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. and 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 crurks industry -- in the construction industry. and 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 the meeting. he was too easy. he never gave the ultimatum. he did ask for a plan for them to come back with a plan with -- in 30 days. and we can speculate why he wasn't tough at that meeting.

but he just wasn't. and there was no political cover for the union leaders. and took more than 30 days, and did come back with a plan. it was an inadequate plan and on february 23, nixon surprised them by suspend being the davis-bacon act. 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 nonunion sector on those projects. so suspended davis-bacon, the solicitor of labor, peter nash at that point, said that his suspension, president's suspension of the federal law, actually suspended 38 state davis-bacon acts as well.

so this was obviously -- this is 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 29, nixon then imposed wage and price controls on the construction industry. using the 1970 authority that congress had given him. 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 industry stabilization committee. john dunlap chaired this. this was a tripartide group, management, labor and it was successful in moderating wages in the construction industry. it was so successful that it gave support to those who wanted to have wage and price controls in the entire economy. so this was march of 1971. and then of course we know that

on august 15, 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 and the entire economy to be followed by a phase two with a price commission and a pay board to again control wages and prices on an ongoing basis. now, the stabilization committee and the construction industry was tri partide as i mentioned and the payment board was set up to be tripartide but was clearly not successful. it's interesting to con trast the two. the pay board, control wages in the entire country is almost an impossible job. given the dimism in of the american economy and the scope of the american economy. it was set up tripartide

initially so they -- that was one strike against them. it was such an impossible task and the second was they appointed one, george bolt, to take responsibility to head the pay board. he had no experience in the labor area whatsoever. we had recommended half a dozen people for the pay board and people who had experience in the labor field and could understand how to deal with unions and management, all those recommendations were rejected, bolt took charge. and eventually broke off. the union leaders left. and it was no longer going to be a tripartide group. now, inflation did subside temporarily in 1971, in 1972. and it did probably help nixon get re-elected 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 never happening again in peacetime in the united states. [applause] >> as ann pointed out, when george schultz came to the labor department, he had as a model for secretary of labor

mitchell's performance under the eisenhower administration. and under the eisenhower administration, the building trade 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 his model for labor secretary was less hostile to trade unions as was true of some, not all, not ann, but some who followed, under other republican presidents. so he had a balanced group of people in the department. one, bill usrey came from the machinist union. and the rest of us were -- none of us were perceived as hostile to trade unions. with respect to labor relations

itself, dealings with unions on collective bargaining, before him, arthur goldberg, in the democratic administration, had spent 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 woods 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 where there was enormous pressure to settle disputes was in the transportation industry. airlines, railroads, in part

covered by the nab labor relations act and covered by the railway labor act. because those could result in international disputes that would paralyze -- national disputes that would paralyze the country and 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. and we also had another -- 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 meter that i think this country ever saw. -- mediator that i i think this country ever saw. it was like a miracle. he went into a room full of management and raise a flag and talk about patriotism and go into a room full of union members and vicious dispute, use the same speech, then go back and go to sleep. but he would know after only 15 or 20 minutes with people, what the bottom line was. so he would miraculously put together a settlement. and he became enormously effective in dealing only in that area. in 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 a life today and 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 the 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 baugs the alternative was so horrible. the downside risk, if the panel

would take only the side of one or the other, 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 schultz called me to tell me that 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, was 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 try to compromise with the democrats. we tried very, very hard to giving 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 ann has mentioned two major manpower bills. i'm particularly proud of the fact that with mike moscow's help when he came over to the labor department, we focused very hard on the evaluation of our manpower programs. for all the billions of dollars we spent on the manpower

programs, the payoff for the training camps was pathetically small. it was a damn shape. those programs were very expensive. and the longitudanal studies showed sometimes that people would be better off if they didn't go into the programs over time than if they did. which was more than a little discouraging. but the one other initiative that i should mention, is the affirmative action. it follows to a second extent from the concern about construction industry wages. but george schultz also had in mind the notion of 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 sferm active action. -- with affirmative action.

we came up with an interpretation of affirmative action part of an executive order issued a long time before which focused specifically on forcing employers in the construction industry originally and then eventually the whole country, all the government contractors, forcing employers to hire and promote minorities in accordance with the standards and goals and timetables. that initiative has remained, i think it's probably the single worst thing we ever did in government. and has -- education, employment elsewhere and in a case that's coming to the supreme court this year, some economists have concluded that the preference idea for

minorities actually is -- has turned out to be terribly injurious to the minorities themselves. finally, i should talk a little bit about george schultz and jim henson. george as hash mentioned -- has been mentioned left the labor department to go to o.m.b. before he did that his prestige was so high in that administration that the labor department was a favored son or daughter in 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 judgment and wisdom was so trusted. what is not sufficiently appreciated is 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 undersuck tear. -- his undersecretary. unfortunately, he attacked george meanie. which destroyed his effectiveness. because george meanie responded, i don't pay attention to the janitor as long as i can talk to the owner of the building. which was a reflection -- which destroyed jim's effectiveness. and it's a shame. because he was enormously capable guy. in 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 insistence. bill killberg was a wonderful teenager. [laughter] and he is still only barely

older than that. a one-and-onerkind and he took over -- a wunderkind and he took over on the affirmative action and i'll leave it up to him now. [applause] >> thank you. i'm not sure 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 had at the department of labor in the nixon years. because of those programs, and domestic programs generally in 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 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. moral hazard of government-provided nonrisk based insurance for reteerment

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 base among blue collar workers. let me address two examples in more depth. the origination of the contact compliance program depended on statistical analysis looking toward 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 gave rise later to self-criticism of the ofcc progress. the at&t and steel industry consent cases presented situations where they were -- there were defined group of individuals who had been subjected to discrimination and 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 assigners. blacks looking to work in the steel industry were invariably directed to jobs in the hot end. industry, in the coke ovens.

rather than in the better or a lot better paying but better jobs in the cold 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 silberman was recused of involvement with the at&t case. and i was then serving as associate solicitor for labor relations and sism rights. i sought to put together a governmentwide 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, 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 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 that 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 the eeoc

chairman bill brown, promising the eeoc lead status on any action 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 communication 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, at 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 in the united steel workers of america agreed to replace department wide seniority with plant wide seniority for most production -- i'm sorry, 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 makeup of two major industries while trampling on the rights of no innocent employees. talking a little bit about erisa, the employment -- in january of 1971, there was a committee headed by peter flanagan, some debate among larry and mike and i as to its characterization. but i remembered being referred to as the committee in on the blue collar worker. and it included representatives of the labor department, commerce and treasury. and this committee turned its attention to pension reform. this is a subject that prior administrations, most notably the kennedy and johnson administrations, had worked on. and it had garnered the long-term attention of senator jacob jatch its who had first -- 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 to the administration of those plans would result in the dim nigs of benefits. -- 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. employment groups generally supported standards of conduct and disclosure rules. some employer groups also endorsed enhanced vesting and funding rules. but termination insurance was seen as a costly, unnecessary complement to funding rules. on december 8 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 forfeiter. more importantly, the administration favored individual retirement accounts which would permit employees without pensions to contribute up to $1,500 a year or 20% of earnings, whichever was less, to an account in their own names, deduct the 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 o.m.b. 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 was a new aspect of the i.r.a. 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 schultz and i would brief the press and the administration's position on april 11, 1973. 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 but 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 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 with 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 a lot of working people and make the workplace 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. there was an open relationship with organized labor which represented of course a much more substantial part of the private work force then than it does now. but it was not always a friendly one. nevertheless, the afl-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. and 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. [applause]

>> well, thank you all. i think we've -- we've got the afternoon planned for here. there's so much to follow up on and cover. but let me start with something a little bit on the 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. and in 1970, 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 the various unions, to honor the labor leaders. never before in the white house had that happened. george meanie of course was there. and at that time, there were 20 million members of organized

labor in the country. the president toasted me and he toasted america for its patriotism, his character, his family, his crinlt, freedom, because he also toasted them as he believed in a strong free labor movement. larry, you were there. do you want to 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, ultimately neutrality in the 1972

election. a neutrality which was in no small part aided by the selection of george mcgovern who george meanie, 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 of the afl-cio in 1972. and the -- what we did gain is active support from the building trades unions. many of the building trades unions. specifically endorsed nixon. >> and seafarers. >> and the teepsters. quid pro quo for the teamsters wars 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 owe palled at the -- 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 among -- when you compared the labor movement of the 1960's and 1970's with today, not only has mike said, you have such an enormous decline in the portion of labor -- of labor represented by organized labor, and of course bill made it true, it had -- 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 and 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. but -- certainly on national security matters, the afl-cio is -- back in the 1960's -- 1970's 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. >> and make a 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, a couple of things. let me 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. reduction in manufacturing jobs in the economy, and the growth of service jobs in the economy. this is a long-term trend. that i think is the major -- one of the major drivers for the reduction in the percentage of our work force that's unionized. of course, the growth in the unionized portion is in the public sector as you said. primarily at the city level and the state level, public schoolteachers, 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 members of the afl-cio. i think what you are referring to is there was, when nixon administration was trying to increase employment and reduce unemployment, there was one initiative that in retrospect was a mistake. and i think it was create wlag

we called public service jobs where we would directly fund unemployed people to work in government jobs at the city and state level. it was a temporary program fortunately and 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. so before the 1972 election. and coretta -- and ceta later. the sam cloth but not the same program exactly. i would also point out in terms of the decrease in private sector, the density of the unionization in the private sector is increasing competition. in areas where you have seen deregulation that resulted in increasing competition, for example, in trucking.

the world has changed dramatically. and in our time, the trucking industry is largely unionized. predominantly teamsters. today there are two large -- two large trucking companies that are unionized and the majority of the industry is not union. even in manufacturing, where we've lost 4.5 million from 1997 to the present time, lost 4.5 million unized jobs. the nonunion sector in manufacturing has actually increased by 1.5 million since 1997. so what you've seen is an increasing competition and where there has 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' 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 mow nopize -- monopolize control of labor. >> and have to add more sophisticated management. >> yes. >> management got much better at sort of managing the work force. and giving employees the right to participate, even when they weren't unionized. so i think there's a much higher degree of sophistication now. and people just feel they don't need a union. >> i think that's true. >> you're both right about the reasons for the decline. both structural and the global competition. but what puzzles me is you don't see the same decline of the unionized portion of the work force in europe as you do

in the united states. even though they -- the european countries face many of the same structural and competitive factors we do. and the proportion of their unionized work force remains pretty much the same as it was in the 1970's. 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 a. we sent him on a tour of our training centers. he said when he came back, i know how you created all of those jobs. he said you are open on sunday. [laughter] our structure was so different on taxes and everything else.

let me come back to something we have not talked about at our dinner last night or today. employers became more sophisticated. i used to say adapt before congress adopts a. what about congress? a couple of the comments you made had to be with the administration being asked, send us something. can you address what congress was like at that point? there were democratic congress. >> i said there are four parties in congress relevant to the labor department. there are the southern democrats, republicans, the afl- cio, and -- he was an independent factor.

enormously brilliant. but occasionally very helpful. that is the way things work. the salmon democrats were more conservative than many of the republicans. the structure of the parties was quite different. >> i have also felt in more recent times, they have advocated their leadership to congress. they have given to them all of these rules and protections and initiatives rather than bargaining for it from today's items but certainly discrimination and jobs for women. training and all of that. >> people forget that before it

merged opposed unemployment insurance and the minimum wage law. all sorts of legislation. for precisely that reason. they want the government to take it over because it toward a degree -- would reduce the need. >> a word on the era, the occupational and safety act was a bill from wisconsin in the house. these were people that we worked with on a regular basis. he was a dominant figure, even though he was in the minority. he had enormous influence over what the labor committee would do and what the direction of legislative initiatives would be. there were leaders in the house

as well. they were bipartisan. it was the republicans who were the more aggressive. so often the democrats were waiting for guidance. >> the republicans were playing a defensive game. they took over the sponsorship because we begged them to do so in order to reduce the power of the democrats at the afl-cio. we wanted more of a compromise. it is not true they were pressing those issues. >> the environment was different. it was much more bipartisan. people working together. >> that is true. all sorts of really liberal republicans who were to the left

of many democrats. i have to tell one story, i went up with george shultz to me to the senator of the chairman kennedy of texas. he was not a rocket scientist. he is no longer alive. we were talking with tampa -- him about labour legislation because he had wanted an initiative on that. george was explaining what the problems were. he was going on for about a half an hour. before getting bored. a phone call came in. george was such an important labor secretary. he said i cannot interrupt. i am an important meeting.

with the secretary of agriculture. [laughter] they went back in the car together. i said i think he is a dummy. he said he said -- that cannot be true. you should be more charitable. i said i still think he is a dummy. >> history will tell you. back to george shultz, if there was a congress that was more bipartisan and encouraging to the compassion and initiatives of the next administration activities, -- >> and more creative and coming up with alternative ways to getting things done. >> with that in mind, george shultz was a supporter of

cabinet government. it worked well what of this idea of being -- bringing policy making, cabinet departments, execute the policies that might come out. that was the first of really strong domestic policy and get the labor agenda was a huge and the labor initiative huge. can you talk about that time with the white house organization? the more central set of agencies. >> the president has confidence in george shultz and georgia took to the labour portfolio with him went to went over to

omb. i think the president was inclined to allow the labor department to run as it wished. he trusted george. i do not think he had that kind of confidence in other domestic cabinet secretaries. certainly not the state department. >> michael, you're in the white house at what point. what is your take on the role of the white house and in those cabinetthe infantcy of a structure? >> when i was at hud, he set up a super cabinet officers. the secretary of hud was in charge of one group of cabinet

agencies. something like community and urban development. the old executive office building, he was back and forth between the two. he had a person working for him who had handled these broader responsibilities. this lasted less than a year. the structure, to have one officer oversee other officers was doomed to failure. of course watergate was going on, too. i do not think that structure was viable. >> was i right about george shultz? no other domestic officer -- nobody else i know. >> i think you are right. as a member of staff, and i was

a labor economist. there is no question that his area of responsibility kept growing. secretary treasury and so forth. he will go down in history as one of the outstanding secretaries. >> i had a relationship with the white house. >> nothing personal, please. [laughter] >> much of mike understanding came from -- my understanding came from -- she said you are working for george shultz. it is quite a bit different than other agencies. i think it carried sir. things change.

after 1972, when peter brennan came in, that was a different attempt to, a different view of governing. pete came out of the building trades. his appointment was a political outreach. he certainly did not have and knowledge of government who was responsible for the same way when schultze did. years lasted about two when we were in the ford administration and things returned to the model we had gotten earlier. >> i can tell an anecdote about the white house labor. i was a staff member for a year and then larry offered the the job of collective bargaining

commission. i would work halftime at sea day and half time at labor. -- cea and half time at labor. we drafted a memo to send the secretary of labor outlining a different way to administer the act. some specific suggestions. i take this job and go to the labor department. he sent this down to me. [laughter] >> speaking of davis-bacon, it struck me, it was clearly amazing action at that time. nixon was not strong.

did he have that in his back pocket at that time? >> i was a little more involved than that. that was designed to get their attention. >> is that why he was not often the meeting? >> we were talking about that earlier. he did not like confrontation. these were some of the people supporting him. cambodia an invasion, the vietnam policy, that may have led him to not be as tough as he was supposed to be. davis-bacon has been suspended twice since then. after hurricane andrew and after katrina. in national emergency grant. >> when i was labor secretary, i wanted to understand erisa.

i never got there. i think there is a difference of opinion. bill, you are at the creation -- >> after the first nixon term, we did not want any standards for pensions. we wanted to put in the legislation that would develop a a petrol fiduciary standard. we did not want moral hazard and we were afraid if we put in any regulation we would produce incentives to create new pension programs. so we thought it was a foolish initiatives. except for the fiduciary standards which were different laws which were confusing about

what standards applied to trusties. when i left, left wing types like bill got involved and they pushed through this legislation. >> actually the first term nixon proposal in 1971, larry is partially right. you did have the tradition -- fiduciary standards. that was a little bit of organized labor. and the individual retirement account came about. that was and i did in the first term. there was a study done about termination insurance. it was a result of that study that we decided it made sense to support determination insurance

proposal. the president reversed us. the issue that went to the president was, where should be located? that is the administration position that we took. >> did brandyn ever get involved on any of these policy discussions >> he got involved in minimum-wage and the huge differential proposal. he had a serious problem because he had no communication with the afl-cio. that was one of the major reasons he was appointed. he did get involved. that issue and selective others where he felt he had some knowledge to contribute.