The pay of unionized construction workers crashed through the Carter administration's annual 9.5 percent wage ceiling in first-year settlements negotiated during the first six months of 1980.
Average annual construction wages rose to 12.4 percent, up from 8.8 percent for the same period last year, according to a Labor Department report released yesterday.
The construction pay boost significantly affected the average pay raise figure for all major labor contracts -- those covering unions with 1,000 or more members -- signed since last January.
For example, unionized workers in all industries outside of construction won average first-year increases of 7.6 percent. The figure goes up to 8.5 percent -- up from the 7.4 percent average raise negotiated in all settlements last year -- when construction wages are included.
None of these pay increase figures included additional cost-of-living and other benefits that could increase total labor costs to 10 percent a year, the report said.
A spokesman for the Council on Wage and Price Stability said yesterday that the council is "quite concerned" about the escalation in construction wages -- the steepest hike in the industry since the early 1970s, when construction workers were getting average annual hikes of 17 percent.
John T. Dunlop, president of the Pay Advisory Committee, has been asked to look into the matter by COWPS Chairman Alfred Kahn, the president's top inflation adviser, the spokesman said. He said the council is trying to find ways "to encourage wage restraint" in the construction industry.
However, in a recent interview with the Washington Post, Robert A. Georgine, president of the AFL-CIO's building and construction trades department, said the pay increases won by his members this year "are understandable."
"This is a grass roots phenomenon," Georgine said. "It's largely due to the talk about a deepening recession.
"You have to understand that construction work is seasonal. The workers don't get paid these "annual" wages all year long. They know they are only paid when the work. They know they can be laid off. The workers themselves are very frightened," Georgine said.
The union leader added that construction workers also "feel cheated" because even with a 12.4 percen increase, they are still laboring under a 7.7 percent loss in real income after the value of the dollar is adjusted for inflation.
The Labor Department report speaks to this point generally.
Fifty-eight percent of the workers covered by major contracts settled since last January received cost-of-living allowances (COLAs) designed to help workers recoup purchasing power lost through price increases. That's the same proportion of COLA agreements negotiated during the first six months of 1979.
However, the report said the COLA agreements negotiated so far this year only made up for an average 53 percent of the inflation rate for the same period.
A spokesman for the Bureau of Labor Statistics said yesterday that workers already covered by COLA agreements tended to demand smaller dollar raises than those whose contracts were not sweetened with the benefit.
For example, first-year wage settlements in contracts with a COLA averaged 6.6 percent, compared with 11.1 percent for contracts without such a provision, for the first half of this year.
"The people already with COLA were relatively confident that they would get some kind of a raise" during the life of their contract, the BLS spokesman said. "Those who had no COLA pushed for bigger dollar increases because they were not as confident."
The department report also seemed to support the maxim that there is power in numbers. Contracts covering 5,000 or more workers yielded first-year pay increases averaging 9.6 percent, up from an average 9 percent for the same period last year. Smaller unions usually got less.