Seeking A Pound of Flesh

American industry has been blessed lately with a rare interlude of labor peace. The average wage-and-benefit increase granted by big employers last year was 7.6%, compared with the Nixon Administration's 6.2% guideline, and latest figures on the number of days lost to strikes are the lowest since 1964. Now, however, union leaders and company negotiators are bracing for a rough year of bargaining. Last week Labor Secretary Peter Brennan, a former construction-union chieftain, gave a hint of the future. "Workers are entitled to a fair share of the spoils," he said. "Workers will be looking for their pound of flesh --and I'm not saying they are wrong."

Contracts covering some 5,250,000 workers, about a half-million more than last year, come up for renegotiation this year in major industries: steel, aluminum, coal, aerospace, communications and railroads. Workers will be trying to catch up with the speediest inflation since the end of World War II. Consumer prices increased by more than 8% during 1973, and toward the end of the year they were roaring at an annual pace of nearly 10%.

Lost Ground. As a result, many workers are worse off in real terms. Some will have to press for wage increases simply to restore ground lost last year to rising prices; all would need a raise of 7% or so to insulate them against this year's expected inflation. "It's going to be a busy year because we have a lot of catching up to do," says Jerry Wurf, president of the half-million-member American Federation of State, County and Municipal Employees. "The American worker has waited patiently while the Nixon Administration has whittled and diddled with the economy. We're through waiting."

Union men were caught flat-footed by the magnitude of last year's inflation.After a relatively moderate 3.3% rise in consumer prices during 1972, they felt it safe to play along with the Administration's wage-and-benefit guidelines.Unions did not want to take the rap if the Administration's policies failed, and any large wage packages ran the risk of being cut down by the Cost of Living Council. Instead, labor concentrated on noneconomic issues--limiting compulsory overtime and improving plant conditions--and lobbied in Congress for pension reform and federally sponsored health insurance. For many unions, those noneconomic issues will probably become a lower priority this year.

In many industries, workers are looking for contract provisions that will protect them against energy-related layoffs. The Teamsters will likely push for a reopening of its not-yet-expired contracts with trucking companies, now that the 55-m.p.h. nationwide speed limit threatens to reduce truck drivers' incomes. The Air Line Pilots Association has threatened work slowdowns if more members are laid off due to the jet fuel shortage.

Probably the most significant negotiations of the year will begin this month between the United Steelworkers, headed by I.W. Abel, and ten big steel companies. In an experiment that could change the future shape of collective bargaining, the union has agreed in advance not to strike. The companies, in return, will pay every worker a $150 bonus this year, grant an additional 3% pay increase for each year of the new contract and continue an unlimited cost-of-living escalator clause. Any issues left unresolved by April 15 will be submitted to compulsory arbitration by a panel of one union representative, one management man and three mutually agreed-upon outsiders.

Less Stockpiling. Abel wanted that novel arrangement because, when contract talks approached in the past, steelmakers and users typically amassed huge stockpiles as a hedge against a strike. When an agreement was won after anything less than a walkout, thousands of workers were laid off until the stockpiles were depleted. Steel executives were also eager to end that pattern of speedup and slowdown. Their furnaces were not being used efficiently, and customers were turning more and more to foreign steel to help build pre-strike stockpiles.

Leaders of other labor unions view the Steelworkers' agreement with a mixture of hope and caution. AFL-CIO President George Meany is opposed to an absolute no-strike promise, but would favor a temporary strike-free period after a contract expires. If major issues remain unresolved after, say, a year of further bargaining, then the union would be free to strike. "When you get a strike, you got a hell of a lot to lose," he says. "I think the Steelworkers' plan is really a breakthrough."

The outcome of the rest of this year's bargaining load still depends largely upon the fate of the Administration's economic controls. If formal wage guidelines are ended or greatly eased, some unions may try to press for much more than a catch-up raise. The year's labor peace will also be affected by the health of the economy. If, as expected, there is a pronounced downturn in the first half, union men could be less willing to back up hefty demands with a strike. Yet the recession of 1970 had little moderating effect on either wage settlements or strikes. And after a year of near-record inflation, it may take more than a dose of downturn to keep workers from trying to win back the money that has been slipping through their fingers.

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