Labor's Pussycat Year

Welcome though it is, the current slowing of consumer price rises leaves most of the nation's work force far behind in the race with inflation. During the past three years, living costs have soared 27.3%, but the average weekly pay of non-farm workers has risen only 18.8%. Unions thus are in a painful dilemma: they have a case for catch-up wage increases to restore lost purchasing power but little opportunity to win any. This year's bargaining calendar is relatively light; fewer leading unions have contracts coming up for renegotiation than last year. Those that do--including unions representing airline, utility, maritime and some construction workers--are finding that the current climate of high unemployment, factory shutdowns and shrinking corporate profits makes 1975 the hardest year in recent memory to win a big raise.

Although a few unions have managed to negotiate double-digit increases (settlements in the first quarter averaged 12.5%), WJ. (Bill) Usery, director of the Federal Mediation and Conciliation Service, says that "wage settlements seem to be moderating." The average 1975 raise, he predicts, will be under the 10% average provided for in the first year of contracts negotiated during 1974. That may be an understatement. Some groups of workers are even accepting pay cuts or other economic adjustments in order to prevent further layoffs and spread the available work.

Chicago warehouse workers, for example, have agreed to a six-month extension of their old contract with no wage increase. Operating engineers in Ohio and Pennsylvania, construction workers in Pittsburgh, and heavy-equipment operators in Arkansas have accepted pay reductions of $1.50 to $3.50 an hour. In Santa Barbara, Calif., painters have okayed a 25% cut.

Such self-abnegation has not yet been reflected at this year's most important bargaining tables. At last week's opening of negotiations covering 600,000 postal workers, whose contract with the Government-owned U.S. Postal Service expires July 21, union leaders insisted on higher pay increases and a stronger cost-of-living escalator clause to protect their members against future inflation. Five railway unions have rejected a hefty 41% wage and benefit boost offered by management, forcing the Ford Administration to order a 60-day postponement of a threatened nationwide rail strike.

Talk, however, is one thing; action is quite another. Last year Usery and his fellow federal mediators had to keep tabs on more strikes than at any time in history. But as of mid-April this year, unions had called 77 fewer strikes than a year earlier. Organized labor seems inclined to focus its hard demands on more job-security programs from companies and more Government action to provide jobs for the unemployed. In Washington last week a bevy of unions voiced such demands at a massive "jobs now" rally.

Difficult as it is for workers who are denied catch-up raises, this year's hard bargaining climate promises benefits for the economy as a whole. It augurs well for a recovery from the recession that would be relatively unhindered by work stoppages or excessive cost-push inflation. All together, says Usery, if a crowded bargaining calendar, many strikes and big wage boosts made 1974 "the year of the lion" in labor-management relations, 1975 could be "the year of the pussycat."

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