The 7 percent wage guideline in President Carter's new anti-inflation program is a lot tougher than it appears - assuming anyone pays attention to it.
Unlike previous peacetime experiments with wage guidelines and controls, the new pay standard covers all forms of worker compensation, not just wages.
And no one is more aware of this than organized labor. Even Teamster President Frank Fitzsimmons understands.
As a result, labor appears headed for a major confrontation with the White House next week when the Council on Wage and Price Stability is scheduled to issue its initial regulations for enforcement of the wage guidelines.
Fitzsimmons already has conditioned any support for the new incomes policy on the need for a few "adjustments" on the wage standard, and the AFL-CIO Executive Council is expected to make similar demands when it meets next week to decide how to react to the new program.
But Labor Secretary Ray Marshall already has rejected any attempts by labor to modify the 7 percent standard. Marshall said the program would be reviewed at the end of 1979, but claimed "there won't be any immediate change in the standards."
The outcome of the upcoming rules battle probably will determine the outcome of the entire anti-inflation program.
During both the Kennedy-Johnson guidepost era and the Nixon controls program, fringe benefits such as health plans and pensions programs basically were untouched by government anti-inflation efforts.
Since the advent of the 3.2 percent guideposts of the Kennedy administration nearly 20 years ago, unions have more often than not found themselves negotiating contracts under some form of government anti-inflation program.
This, and the fact that most fringe benefits are tax free, has resulted in a growing trend toward fringe benefits as a form of compensation. Today, the government estimates that approximately 30 percent of union compensation is in the form of fringe benefits.
For the Teamsters, who lead off next year's round of major contract bargaining, there is an added dilema.
The union is under tremendous government pressure to pump millions of dollars into its pension program to meet federal funding requirements. Although no one is quite sure just how much money is needed, sources close to the union and the trucking industry claim it could add as much as a full percentage point to the size of the settlement.
Thus the possible arithmetic involved in the Teamster negotiations is politically depressing for Fitzsimmons and other top Teamster officials.
If you assume that the Teamsters are probably in the 30 percent bracket when it comes to fringe benefits, and then add an additional percentage point for the cost of meeting government funding requirements for the union's giant pension fund. Teamster members would be entitled to less than a 4 percent wage increase under the White House guidelines. And if the union members take the entire 4 percent in direct wage increases there is no room for cost of living protection.
With the cost of living currently climbing at a rate of approximately 9.5 percent, it's easy to see why Fitzsimmons is urging "adjustments" in the wage standard.
But Fitzsimmons isn't the only labor leader worried about the impact of the 7 percent standard. At the AFL-CLO officials are quick to argue the need for an easing of the wage guideline.
"Take a look at the way pension plans are funded," a union official says. "Most companies purchase stocks to meet their pension funding requirements. But every time the stocks go down they have to buy more stocks and this is included as 'employe compensation,' but the worker doesn't get any additional benefits."
He said unions and employers were faced with the same problem in the health insurance area.
And the United Auto Workers union, which generally is being counted on by the administration to try to cooperate with the new program, is reportedly faced with a need to direct 9 cents an hour out of every worker's paycheck in the auto industry to meet federal pension requirements.
The Carter administration, for its part, has been warning labor for more than a year that workers who have been receiving the biggest pay increases in recent years will be asked to make the biggest sacrifices under the anti-inflation program.
Administration officials, who publicly have cited the need to break the "wage momentum" that has been building in the economy in recent years argue that the tough pay curb is totally justified.
But government officials admit that the toughest fight is still ahead of the White House. If the administration bows to labor's adjustment demands, they argue, the weaker standard could jeopardize the anti-inflation program.
Without some accomodation, however, the government appears guaranteed a confrontation with labor at bargaining tables next year.