Steel's Fat Pact

In one of the most important settlements in this year's negotiating calendar, the United Steel Workers last week won a contract that will raise labor costs of the nation's ten biggest steel firms 40% over the next three years. The pact dims any hope that the moderation that marked labor agreements last year --and kept some brake on inflation --will continue. It represents a high price for labor peace: bargaining was conducted under a year-old experimental pact that prohibits the union from striking, gives it a guaranteed minimum increase and the right to bargain for more, and pledges both sides to submit any differences to binding arbitration.

The new contract will lift the present average wage of about $5.80 an hour, an average of 5% a year, with the biggest boosts coming in the first year. The lowest-paid workers will get an 18.4% increase initially. In addition, each of the 352,000 workers covered will get a $150 cash bonus. The increases go into effect May 1--the day after wage-price controls are expected to die--though the current contract extends to Aug. 1. A liberalized and potentially expensive escalator clause will add a penny an hour to wages for each rise of three-tenths of a point in the consumer price index.

Fringe increases are even bigger.

Steelworkers now will be able to retire with full benefits at 62, rather than 65. Pensions will rise for those already retired--a minimum of 5% for workers retired since 1971, a maximum of 60% for those who retired before 1954. And all pensions will be lifted a further 5% in August 1976. In all, the contract is the most generous ever negotiated by the U.S.W., a pacesetting union for all American labor, and will undoubtedly spur a substantial rise in steel prices. Steelmen had been talking about a 7% to 9% price increase even before they agreed to the new pact.

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