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PROGRAM EFFECTIVENESS AND ESTIMATED COST/BENEFIT EVALUATION

There is no question that the labor-management community is being well served when the need for mediation existe. Each year the Service receives hundreds of letters from representatives of both labor and management testifying to the effectiveness of the assistance given the parties in their negotiations. These unsolicited testimonials are a sound but nonstatistical indication of the effectiveness of the mediation program.

Endeavoring, however, to relate the cost of operating the mediation program to the benefits achieved to the economy, in terms of work stoppages shortened or averted, is quite complicated because of the many imponderables present. The Bureau of Labor Statistics, as stated in its "Handbook of Methods," does not attempt to measure the cost of strikes in terms of the amount of production and wages lost because of the many complex and interrelated factors for which information is not readily available.

Based on certain assumptions, however, a rough approximation of cost effectiveness may be attempted although obviously no precise validation is possible. The following data, therefore, are presented with this important qualification in mind.

A.

Wage Losses Eliminated or Minimized with Active
Mediator Participation in Dispute Mediation Cases

1.

Cases Settled Without Strikes as a result of
Intensified Mediation Efforts

In Fiscal Year 1977, strike deadlines were
postponed and/or joint meetings were held
on deadline dates (on the initiative of the
mediator) in 3,321 cases. In 2,580 of these
cases, involving over 717,000 employees in the
bargaining units, the additional time and inten-
sive mediation effort prevented any strikes
from developing. The potential strike time
loss avoided in these 2,580 cases was over 11
million man-days, calculated by the use of the
BLS average of 15.6 man-days lost per worker in
stoppages for calendar year 1976 (the latest
data available). Discounting this figure by
50 percent, on the basis that some postpone-
ments and subsequent settlements would have
been reached without a mediator, or that strike
duration would have been less than the BLS
average, a conservative figure of 5.5 million
man-days saved is estimated.

2.

Cases Settled Without Strikes Prior to Deadline
Date with Mediator Assistance
In Fiscal Year 1977, 5,213 additional active
cases with over 1.5 million employees in the
bargaining units were closed by FMCS mediators
without strikes and without the necessity of
postponement of strike deadlines and/or joint
conferences on the deadline date. It is a con-
servative estimate that strikes would have
occurred in 20 percent of these cases (involving
20 percent of the workers) without mediator
assistance, and that the work time lost, using
BLS average number of man-days lost (15.6 as in
1 above), would have been over 4.6 million man-
days.

3.

Strike Cases In Which Strike Time Losses were
Shortened Due To Mediator Assistance

That actual strike time losses are minimized
by mediator assistance is a fair assumption.
Referring to BLS data for 1975 for purposes of
greater accuracy (Bulletin No. 1940), Federal
mediators participated in the settlement of
1,805 strike cases involving nearly 684,000
workers and a total of 20,600,000 man-days of
idleness.

Assuming that these strikes would have per-
sisted for three work-days longer in the absence
of mediator assistance (a conservative assumption),
it is estimated that nearly 2.1 million man-days
of additional idleness were avoided.

B.

Summary of Savings Due to Program Effectiveness and
Estimated Cost Benefit Evaluation

In terms of man-days, estimated total year strike
time avoided is as follows:

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25-260 (Pt. 7) O - 77 - 45

FRIDAY, FEBRUARY 17, 1978.

NATIONAL LABOR RELATIONS BOARD

WITNESSES

JOHN H. FANNING, CHAIRMAN
JOHN S. IRVING, GENERAL COUNSEL
JOHN E. HIGGINS, JR., DEPUTY GENERAL COUNSEL
JOSEPH E. DESIO, ASSOCIATE GENERAL COUNSEL
WILLIAM LUBBERS, SOLICITOR
ROBERT VOLGER, ACTING EXECUTIVE SECRETARY
THOMAS W. KESSEL, CHIEF ADMINISTRATIVE LAW JUDGE
ERNEST RUSSELL, DIRECTOR, DIVISION OF ADMINISTRATION
LEE D. VINCENT, COMPTROLLER

Mr. NATCHER. The committee will come to order.

We take up at this time the request for the National Labor Relations Board and we have before the committee the Chairman of the National Labor Relations Board, John H. Fanning, along with Mr. John S. Irving, the General Counsel of the NLRB, and others.

Mr. Fanning, first, if you will, please tell us who you have with you.

Mr. FANNING. Immediately to my right, Mr. Lee Vincent, the Comptroller; to his right, Mr. John Irving, the General Counsel of the agency; and to his right, John Higgins, Mr. Irving's Deputy.

Mr. NATCHER. Thank you, Mr. Fanning.

Now, I have had an opportunity along with the staff to examine your statements; you have excellent statements. With your permission, we will insert these statements in the record in their entirety and take up the questions. The statements referred to follow:)

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