Organized labor is headed into a major new round of contract bargaining this year, with many unions publicly rejecting President Carter's latest anti-inflation program. The potential confrontation between labor and the White House has cast a shadow of uncertainty over the nation's economic outlook.
With approximately 3.8 million workers covered by major union contracts up for renegotiation this year, government labor relations experts already are predicting a sharp increase in strike activity as workers in key industrial sectors of the economy test the government's voluntary 7 percent wage guideline.
The outcome of this year's negotiations is particularly critical to the economy since it is the start of a new three-year bargaining cycle. Wage settlements this year will serve as the "pattern" for other unions through 1981.
In an apparent effort to avoid a direct showdown with labor at the bargaining table, the Carter administration already has eased its wage standard to accommodate some union critics.
The original wage standard proposed by the Council on Wage and Price Stability was the most rigid government wage standard in modern labor history. Of particular concern to the unions was the fact that the 7 percent limit applied to both wages and fringe benefits.
With inflation rising at double-digit rates and fringe benefits now accounting for as much as 30 percent of total compensation in major union contracts, the new standard would have limited "cash wages" to 3 or 4 percent a year. Wage increases could be even less, union officials argued, when the cost of simply maintaining existing benefits for such items as pensions and health care was taken into account.
Responding to this criticism, the White House excluded all costs for maintaining existing pension benefits and part of the health care costs from the 7 percent standard.
Key union leaders insist, however, that the government did not go far enough. As a result, many union leaders have called on their members to simply ignore the government anti-in-flation program.
United Rubber Workers President Peter Bommarite, in a New Year's message to his union's membership, says the URW will ignore the government program when it negotiates new contracts this spring with the Big Four of the rubber industry -- Goodyear, Firestone, Goodrich and Uniroyal.
David Fitzmaurice, president of the International Union of Electrical Workers, is equally direct in his instructions to union negotiators this summer in the electrical manufacturing industry.
"We've instructed our people to negotiate as if there were no guidelines -- to negotiate for the needs of their members and to strike, if necessary," Fitzmaurice says. Fitzmaurice calls the White House wage guidelines "unrealistic."
The key to this year's negotiations, however, does not rest with either Bommarite or Fitzmaurice. Both the White House and other major unions are looking to this year's Teamster negotiations for a new national trucking contract to set the tone for the bargaining cycle.
It was basically to accommodate the Teamsters and some of their specific problems at the bargaining table that the White House relaxed its wage standard. The union has a large pension liability -- no one is sure quite how large -- as the result of various legal actions against the management of the union's retirement programs by the Labor Department. In addition, the union has large funding liabilities as a result of the 1974 federal pension law.
The new wage standard will allow the Teamsters to exculde all the added pension costs from the 7 percent government guideline.
So far, Teamster President Frank Fitzsimmons basically has refrained from any major attack on the White House anti-inflation program. After initially attacking the 7 percent standard as unfair, Fitzsimmons has avoided fiery rhetoric both publicly and privately. Negotiators at the union's mid-December meeting with trucking management say Fitzsimmons was even more moderate during the closed bargaining session than he was in public.
Clearly, the biggest negotiations after the Teamsters are the talks between the United Auto Workers and the Big Three of the auto industry -- General Motors, Chrysler and Ford.
The outcome of this year's negotiations is particularly critical to the economy.