Johnson Names Dunlop To Strike-Review Panel

President Johnson last week named John T. Dunlop, chairman of the Economics Department and an outspoken critic of the Administration's economic guidelines policy, to a three-man Emergency Board which will try to avert a threatened strike against American Airlines.

American is the largest airline not affected by the 25-day-old strike of the International Association of Machinists which has paralyzed 60 per cent of the nation's air traffic.

The Transport Workers Union, representing mechanics and other ground service workers at American had called a strike for 12:01 a.m. last Thursday. By creating the panel, Johnson made it illegal for the union to strike until a 60-day cooling-off period expires.

Under the provisions of the Railway Labor Act, the Board will hear the positions of both parties and within 30 days make recommendation for an agreement to the President. The two parties are then expected to work out a settlement based on the recommendations during the next 30 days. After this second period, the union is again free to strike.

Dunlop declined yesterday to discuss the issues in the American Airlines dispute. Asked if he might use the contract finally worked out in the current strike as a model for the Transit Workers dispute, he commented, "I wouldn't tell that to my mother."

Goes to Washington

Dunlop will go to Washington D.C. Wednesday to meet with the other two members of the board: Bay Lisa Manning, dean of the Stanford University School, of Law, and J. Patterson Drew, a Washington D.C. lawyer.

In an interview last month, Dunlop cited the machinists' strike as one more example of the failure of the economic guidelines as an "effective policy." In highly mechanized industries such as the airlines, he explained, productivity increases rapidly, and workers are unwilling to accept settlements based on average increases in productivity for the economy as a whole.

If everyone adhered to the guidelines, all workers would receive pay increases based on the average increases in productivity -- about 3.2 per cent per year

One of Dunlop's associates, Gerald D. Rosenthal, assistant professor of Economics, claimed yesterday that the government had let the airline industry turn itself into a "sitting duck for labor trouble."

Record Profits

"Because the Civil Aeronautics Board has not forced major fare reductions," he said, "industry profits have been at a record high -- and the unions know it. You're not going to get people to settle for 3.2 per cent when profits are much higher than that and the cost of living is rising as quickly as it is."

Rosenthal noted that the government, having neglected its regulatory responsibilities, was likely to complicate the issues by further intervention. He cited the machinists' refusal to accept the contract worked out Friday and backed by President Johnson, as "proof that you can't really impose a settlement from outside."

If Congress tries to end the strike with legislation, Rosenthal said, the results would probably be disappointing -- and perhaps expensive for the companies. He quoted Dunlop's dictum that "you can withhold more from the working place than your labor."

There is a lot of pressure on the negotiators to end this thing," he said, "but I don't think the men will go back to work until the company makes the pot a little sweeter."

The proposed contract with Eastern, National, Northwest, Trans World and United Airlines called for benefit and wage increases that were estimated by sources close to the Administration at 4.3 per cent a year.

Union sources claimed that contract represented a pay raise of some 72 cents an hour above the current average hourly wage of $4.15--an increase of between six and seven per cent.

Above Guidelines

Both of these estimates exceed the 3.5 per cent increase suggested by the Presidential Board, similar to the one just established, which studied the dispute.

Though all of these proposals exceed the guidelines, Rosenthal did not think the policy could be completely discounted as a dead letter. "At the very least," he said, "we'll be talking about them for some time.