8 – A Major Project Leads to a Life-Changing Opportunity

So far as we knew, nowhere were agricultural workers included in any state’s unemployment insurance system.

In early 1953, the International Longshore and Warehouse Union announced that in forthcoming negotiations with the sugar industry, it would seek a contract to include a demand for a private unemployment insurance system for its member agricultural workers. So far as we knew, nowhere were agricultural workers included in any state’s unemployment insurance system. Nevertheless, to be certain, I was given the project to investigate if there were any public or private plans anywhere in the United States that provided such benefits. Although I traveled across the country and visited most state capitals where agriculture was important, I could find no state that covered agricultural workers in their unemployment insurance plans.

When I returned to Hawaii and reported my findings, I was asked to develop a concept for the sugar companies to consider regarding what the union might demand and how we could deal with their expectations. Note that while the companies were not overjoyed with the notion of such a plan being introduced—given that it would be costly during a time when the industry was struggling a bit—the industry was willing to consider something that was rational if it would smooth forthcoming negotiations.

Essentially, I proposed that we develop a database containing information for each of 27,000 sugar workers employed in the sugar companies along with data on their family members who might be covered by any plan that might be agreed to in negotiations. My proposal was that such data on age, service, earnings, dependents, and so on would be recorded on individual IBM punch cards for each worker. This approach would have enabled us to calculate the cost of any proposals that might be considered. The plan was that when labor and management negotiators came up with a tentative plan, we could cost out the plan under the assumption that all employees would get a certain number of weeks of company-funded private unemployment insurance. Because so many variables were involved in the costing, it was always difficult to get even an idea of whether one plan or another would cost more or less.

Therefore, it was necessary to do actual calculations to understand and evaluate the relative costs of any plan that might come under consideration.

At one point, one of the sugar company CEOs raised the question of whether “this kid,” meaning me, was proposing something that was more elaborate than was actually needed. The CEOs agreed to ask some organization in New York, which I had never heard of, called Industrial Relations Counselors, Inc. (IRC), to send one of its key people to Honolulu to see whether my proposal was realistic. At the time, IRC was a leader in research and design of pension and unemployment insurance systems. While I had never heard of IRC, I assumed that any reasonable critic would agree with my proposal. Howard S. Kaltenborn, who I later learned was the sole IRC vice president, arrived in Honolulu almost a week later. He immediately spent a long, grueling 10-hour day going over my plan and the logic and details behind it in preparation for a meeting scheduled for the next day with the sugar company executives. Based on the intensity of his many questions, I worried that he might
undermine my proposal or maybe even steal my ideas.

I was stunned at the meeting when he was asked his reactions to the plan, which by that time had taken on the name of “Beaumont’s Proposal,” and he said something like, “Dick and I spent all of yesterday on his proposal and I think it’s great, and it is probably the only way to come to a rational conclusion on what can be a very sticky negotiating matter.”

After observing him during the sugar negotiations, I found IRC Vice President Howard S. Kaltenborn to be an inspiration, and I wanted to know more about his organization. Finding out about IRC was no easy matter. It was 1953. We had no Internet or Google. I finally found some material on IRC buried in some corner of the Hawaii Employment Commission research library files. That was the first time I read of the history of the Ludlow Massacre and Rockefeller’s role in charting a new course for management and industrial relations. To me it was an amazing story that captivated my imagination and thinking about employee and labor relations. It also underscored the dynamics that were at work in enabling Rockefeller to not only take an interest in this matter but also take the opportunity to marshal the resources to change the course of history with respect to the field of industrial relations by developing IR centers in six universities and founding IRC to conduct research in this field.

Learning about this special organization with such renown in research and consulting was stunning and more than sparked my interest as a possible career development opportunity.

I was thrilled with Kaltenborn’s saying that he would keep in touch with me, especially when he learned that I was interested in moving back to the Mainland. Ultimately, I was invited to IRC to meet the professionals in their operation in New York City. Two years later, I was offered a job in the research side of IRC. This was when I started to learn about IRC’s importance not only because of its history, but also because of what it stood for in the development of the field, sharing important views and holding activities related to enhancing management, organization, and human resources.

(Image courtesy of the Library of Congress)