Early in 1977, John T. Dunlop, the crusty veteran labor mediator, tried vainly to interest the newly installed Carter administration in establishing a tripartite committee of labor, management and government officials to tackle inflation and other key economic problems.
The idea was to create a high-level forum in which the three major partners in the economy could work out some sort of consensus that would lead to a moderation of wages and prices. But the administration, suspicious of any such arrangement, ultimately rejected the plan.
Now, 2 1/2 years later, Dunlop finally has the mandate he was seeking in the administration's new plan for a second year of wage-price guidelines. Carter has agreed to set up a three-part Pay Advisory Committee to deal with wage problems. But there's more question than ever over whether it can work.
On the surface at least, the second-year wage-price plan is undeniably a victory for the administration. Along with the pay board, Carter and organized labor agreed on an impressive-sounding "national accord" in which the union leaders promised to cooperate with the anti-inflation program.
The deal was a simple one: The White House promised to consult labor more regularly on key economic issues, and also abandoned its threat to impose sanctions against wage-guideline violators -- a cudgel the administration never used, but which irked union leaders visibly.
In return, labor agreed to participate in the pay board, with implied support for the entire wage-price program as well. The arrangement would be on labor's terms: The panel would have the power to set and enforce the wage standards as it saw fit. But the board still was the key.
For an administration that never has been particularly close to labor, the pact was something of an achievement. Carterites exuded hopes that labor's presence in the program would help prevent the price surge from "spilling over" into wages. And the unions' support would give Carter a political boost.
But there also were some hitches in the arrangement:
A closer look showed that the new "national accord" was primarily a political gesture, with little beyond symbolism to offer either labor or the administration. The agreement was so vaguely worded that neither side had to give any ground on substantive issues.
Carter's pledge for more regular "consultations" with labor did little more than make formal a monthly meeting with labor leaders that Vice President Mondale had been conducting anyway. Officials say the major difference now is that its recommendations will be forwarded to the policymakers involved.
The tripartite Pay Advisory Committee won't be dealing with broad policy questions, as Dunlop's 1977 plan envisioned, but rather will confine itself to relatively technical wage-guideline issues, blunting any hope that such a panel might hammer out a consensus on more basic economic problems.
There are serious questions whether Carter can win business's backing for the plan -- a factor officials concede is essential if the pay board arrangement is to work at all. White House planners admit they didn't consult adequately with corporate leaders before announcing the plan. The issue still is up in the air.
If business can't be coaxed into cooperating, the whole plan could shatter overnight. Without a fully tripartite mechanism, both labor and Dunlop would fly the coop. "It's a three-legged stool," one key official said. "You have to have all three legs or the thing will collapse."
There could be a clash between the pay panel and Carter's economic advisers if the two disagree over board decisions.Although labor views the committee as free to recommend any wage policies it wants, White House anti-inflation officials insist they can veto any that they find objectionable.
The issue was a major bone of contention in negotiations leading up to last week's announcement. White House officials remonstrated so loudly against the notion of an "unfettered" board that they almost prodded the labor representatives into dumping the program. The dispute isn't dead yet.
The arrangement could be hampered by the current "sunshine" laws, which require the pay committee to hold public meetings despite the sensitive nature of its negotiations -- a mandate that neither Dunlop nor his labor and management colleagues have felt comfortable with in the past.
Finally -- and perhaps most discouraging of all -- Carter officials concede that no matter how well the new pay board performs over the next few months, there's little hope that it can bring about much dramatic improvement in the overall inflation rate.
For one thing, while inflation has been virulent over the past 10 months, the surge hasn't stemmed from wages, which have behaved remarkably well. And the guidelines program doesn't cover food, energy and housing costs, where the problem really lies.
Presidential inflation adviser Alfred Kahn said in an interview last week that he personally would be satisfied if the pay board were able to hold the increase in wages and fringe benefits next year to 8.5 percent -- the same pace it reached during the first six months of 1979. That still would imply a decrease in the inflation rate to between 9 percent and 10 percent from 13 percent now.
For all these uncertainties, however, perhaps the most frustrating question was why the administration waited so long to push for such an accord. A year ago, it might have added substantially to the guidelines' success. Today, with only 14 months left in Carter's term, it hardly seems worth the trouble.
As AFL-CIO Secretary-Treasurer Lane Kirkland remarked ascerbically last week, labor would have been ready to negotiate a similar arrangement more than a year ago if the administration had been willing, but White House officials were so aloof that unions leaders felt they were being left out.
The latest effort sprang up almost spontaneously last summer, when Labor Secretary Ray Marshall suggested the notion during planning for the second year's guidelines program. Incoming Treasury Secretary G. William Miller seized on the idea and handled most of the negotiations.
For all of last week's fanfare, the new program so far has gotten off to a slow pace. As of late Friday, the White House still did not have all the payboard's members named, and the committee was waiting in limbo for Miller's return from the International Monetary Fund meeting in Belgrade.
Sources speculate that the pay panel is unlikely to meet its Oct. 31 deadline for revamping the wage guidelines entirely, as the administration has asked. Instead, officials say, the committee may issue decisions on only two or three key points, and leave the rest until later.
Nevertheless, the machinery now is in place, and it remains to be seen whether the administration -- and its new partners -- can make it all work. Dunlop has agreed to serve as pay board chairman at least long enough to get the program started, and labor seems anxious enough to go along.
Carter's relations with labor have been stormy enough that the arrangement still is a precarious one, with doubts on both sides over how long the accord can last. A lot has gone by the boards since 1977. No doubt even Dunlop must be less enthusiastic than he was before.