The Carter administration's new campaign to prod labor unions into moderating their wage demands received its first visible setback yesterday as West Coast pulp and paper workers rejected a White House request to accept lower pay raises.
After a meeting in Portland Ore., with officials of the Council on Wage and Price Stability, union leaders said they would not back down on demands for wage boosts amounting to 30 percent over two years, which the White House has branded inflationary.
The union's defiance was a blow to the administration's wage-price program. Only hours before the session, Barry P. Bosworth, the council's director, had pointed to out-sized wage settlements as a major cause of the current round of inflation.
The council is beginning hearings this morning in Monterey County, Calif., on a contract involving members of the electrical workers' union that would provide wage boosts totaling almost 30 per cent or more over three years now were becoming commonplace among small unions and non-union workers. As a result, he said, "the rate of inflation is definitely accelerating on thr wage side."
Meanwhile, in a bit of good news for the administration, the American Telephone & Telegraph Co. announced that as a symbolic gesture to the anti-inflation fight, it would freeze general prices of Western Electric telephone equipment and avert all increases in xecutive pay this year.
The announcement was made by AT&T Chairman John D. DeButts following a meeting earlier this week with Robert S. Strauss, the administration's new anti-inflation czar. The lid on salary increases for AT&T exectives will affect some 430 persons.
The action came as, separately, the House Appropriations Committee voted to deny scheduled cost-of-living pay increases to some 16,000 federal exectives earning $47,500 a year or more - including President Carter, members of Congress and judges.
The measure, portrayed as an anti-inflation move, passed 22 to 8. President Carter has proposed limiting salary increases of all federal employees to 5.5 percent as part of his new anti-inflation program. The pay raises are scheduled to take effect next October 1.
Meanwhile, Arthur F. Burns, former chairman of the Federal Reserve Board, called yesterday for an even more stringent cut in federal salaries to about half the 6 percent target expected to be recommended by a federal comparability board.
Burns also urgd that the government eliminate its restrictions on agricultural production, relax minimum wage requirements and suspend the David-Bacon Act, which requires the government to pay that workers on federal contracts be paid the prevailing wage for their region.
In his meeting with reporters yesterday, Bosworth repeatedly emphasized the need for unions to cooperate with the adminstration's new wage-price programs. He warned that it simply was not practical to wait for evidence that prices were slowing first, as some labor leaders contend.
Bosworth also criticized what he called the seemingly hard-line "rhetoric" of the Federal Reserve Board, which he said had hinted repeatedly earlier this year it would relax its monteary tightening if the administration moved to reduce the deficit, but has not acted so far.
He also indicated he thought the administration "is going to have to find some way to respond to" the recent surge in meat prices, but offered no suggestins for a solution. Analysts expect meat prices to continue rising sharply for another few months before tapering off.