Tuesday, February 22, 2011

Reagan’s Confrontation with PATCO as a Model for Governors in 2011 (Part 1): A Brief Historical Overview

In light of the showdown with public sector unions across the country, it would be wise for state and local executives to review President Reagan’s handling of the famous 1981 Professional Air Traffic Controllers’ Organization (PATCO) strike.  Since its founding in 1968, PATCO had engaged in—and gained concessions from—six separate “job actions.” As Reagan took office, PATCO began threatening to up the ante by calling for a general strike.  Three different factors made such actions illegal and immoral.  First, statutory law prohibited federal workers from striking.  Second, prior to being hired every controller had taken an oath not to strike.  Third, a 1970 permanent federal court order prohibited PATCO from striking.

Nevertheless, flushed from triumphs over Nixon, Ford, and Carter, and misreading Reagan’s sympathy for weakness of will, PATCO elected to reject the administration’s offer of an 11% pay raise, extra pay for night work, a 37.5 hour work week, modernized equipment, severance packages for medically-discharged controllers with five or more years of service, and a formal consultative role in FAA decision-making.  A strike was narrowly-averted in June 1981 when a tentative agreement was reached providing each controller a $4K raise (above what Congress had decreed for all federal employees) time-and-a-half for 36 hours a week; 14 weeks severance in case of medical disqualification, a 15% night differential and other minor concessions.

PATCO’s response to this second olive branch was to up their demands—specifically, they wanted a $10K raise for all controllers—at a time when many union jobs paid only $10-$15K a year), a 32 hour week, and a much more generous retirement package. When Reagan refused, a strike was called for August 3, 1981.

Once PATCO threw down the gauntlet, Reagan fought to win—permanently and decisively.  In an August 3rd briefing he declared: “Dammit, the law is the law and the law says they cannot strike…Suspension, hell.  If the law says they can’t strike and if they then go on strike, then they’ve quit.  Period.”

In the end, PATCO simply picked the wrong man to play chicken with. 
In part two, we will consider the lessons of PATCO and how they might be profitably applied today.

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