Wages of Clout

Teamsters crack guidelines

The big long-distance rigs were barreling along U.S. highways last week in near normal numbers. The powerful Teamsters union and the trucking industry had agreed on a new master contract, ending a ten-day strike and lockout that drastically curtailed transportation of goods and threatened many manufacturing industries. In all, the union and the industry estimate that the contract will give 270,000 drivers and warehouse workers an increase of more than 30% in wages and fringe benefits over three years. That is well above the Carter Administration's wage-guideline limit of 7% a year. But the Council on Wage and Price Stability, by tortuously twisting the guideline rules, pronounced the agreement acceptable. Chief Inflation Fighter Alfred Kahn admitted that the Administration's official position verges on fantasy. Said he: "You can say with honesty that there has been bending of the standards."

Union members, who had earned about $9.75 an hour, will collect 800 more in the first year and 350 in each of the next two years, bringing them up to $11.25 per hour in 1981. They will also get an additional $1.09 for benefits, like health insurance. Assuming an average inflation rate of 6% over the next three years, as the Administration optimistically does, the cost of living payment would add another 830 and bring the total wage and benefit increase for the contract to $3.42 an hour.

Of this amount, 570 is not included in the guideline calculations because of various exemptions granted by the Administration. For example, since retirees have no voice in the ratification and are technically not part of the bargaining, the White House agreed to exclude the cost of increasing their pension benefits. If these exemptions were included, the wage-and-benefit boost would come to 27%.

On top of that, 220 in living-cost payments will be deferred until the three-year contract expires and thus will not be counted. If inflation over the next three years averages not 6% but 8.5%, as the companies and union predict, the increased cost of living payments will swell the settlement to 31.5%. The truckers quickly got permission from the Interstate Commerce Commission to raise freight rates by up to 5.7%, and the industry will seek additional increases.

Despite Administration efforts to picture the contract as a victory for restraint, the Teamsters' fat settlement could whet the appetite of other unions in this year of heavy labor bargaining. The United Rubber Workers' contracts expire this weekend, and, says Union President Peter Bommarito, "Our settlement will have to go over the guidelines.''

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