The Carter administration yesterday publicly exhorted two key labor unions - the postal workers and railroad employes - to hold down their contract settlements in 1978, cautioning that too large an increase in either case could spur inflation and prompt other unions to follow suit.
In a formal report, the Council on Wage and Price Stability noted that postal workers' wages already have climbed to 45 per cent above the average for urban workers and warned that unless labor costs "taper off significantly," postal rates will have to rise.
The council did not comment directly on wages of railroad workers, but it suggested pointedly that any upcoming settlement would be decidedly less inflationary if the railroad workers agreed to compromise on three existing work rules that are adding to labor costs.
The report marked the first time the administration has taken a stand on a major labor union settlement in advance of actual bargaining - and a step-up in the White House's use of moral suasion to try to influence wage and price decisions.
Meanwhile, Robert S. Strauss, the administration's new anti-inflation czar, announced the White House would soon begin a new regional "education" program in which key officials would make personal appearances around the nation to help sell the wage-price program.
And separately, Fieldcrest Mills Inc., the towel manufacturer, announced it was rescinding a 6 per cent price increase scheduled for its basic line of towels next Sept.1 in an effort to cooperate with the president's program. The increase was announced in April.
Strauss also told the Senate Banking Committee yesterday and administration is planning a "strong and vigorous" effort to hold down the fiscal 1980 budget, for which planning began last week.
At the same time, however, he also cautioned against expecting any dramatic results from the new wage-price program, particularly in the short run. Although there may be "some results" within a year he warned, "our program is directed at . . . progress over a 30-month period."
The wage-price council's warnings to the postal and railroad workers were contained in a report on inflation during the first three months of this year in which the agency conceded there were some "disturbing" developments but asserted that "does not mean . . . inflation is again on the rampage."
Echoing recent predictions by other officials, the council forecast that inflation would average about 7 per cent of 1976 and 1977, but below the 9.3 percent place of the January-March period.
It also noted that wages have been rising sharply, too, but attributed most of the increase to the coal miners' settlement and the higher minimum wage that took effect last January. The agency said that with the coal pact excluded, the increases generally parallel those of 1977.
The council's pronouncements concerning the postal and railroad workers were aimed at key issues in both sets of negotiations. The climb of the postal workers' pay to 45 percent above that of urban workers as a whole is up from a 27 percent margin in 1971.
The work-rule issues in the railroad case include the size of the train crews and a requirement that railroads strictly separate the use of over-the-road and switchyard crews. Although the industry currently is bargaining over the issue, negotiators say privately the talks are bogging down.
Although the council placed special emphasis on the contract talks involving the postal and railroad workers, it also cited nine other basic industries in which it said wages have outpaced those of most workers - coal, iron ore, trucking, railroads, telephone, steel, aluminum, autos and tires.
Strauss told the Banking Committee that despite the president's endorsement of the 39 percent wage increase after the miner's strike, "We cannot let coal be any sort of an example" for other unions to follow. He asked the senators to watch instead the handling of the postal contract.
At another point, Strauss essentially agreed with a comment by George Meany, president of the AFLCIO, that it would be unfair to expect labor unions to accept smaller pay rises until after they see evidence that prices are slowing down.
Strauss suggested a partial compromise on that point may lie in the use of cost-of-living "escalator" clauses, which tie pay increases directly to a portion of the past year's rise in prices. He said he thought wide use of such a system would give unions "some insurance."
Strauss' comments came as, separately, the administration urged Congress not to pass legislation that would further restrict meat imports, arguing that imposition of new quotas would only spur inflation. The meat-quota bills are being considered by a House Ways and Means subcommittee.
Earlier, the Banking Committee heard debate over a set of proposals to use the tax system to penalize or reward companies and unions depending on how well they cooperate with anti-inflation guidelines. However, the panel reached no conclusion on the issue.