Two small towns in rural central Minnesota have become the site of a jobs experiment that is widely viewed as a prototype for a major portion of President Carter's welfare revision proposal.

The enormous difficulties and stern opposition encountered by the experimental Work Equity Project could portend serious obstacles for the national effort.

Funded by a $6.8 million Department of Labor demonstration grant, WEP has taken two years to get under way, instead of the few months its designers foresaw. It has been resisted and criticized by welfare recipients' groups. Lawyers have searched (unsuccessfully to date) for ways to challenge it in court.Unions have fought to alter it, fearing a threat to members' job security. Local welfare boards in two counties scheduled to take part in the experiment voted it out of their jurisdictions. The administrator who opened WEP on July 24 was the seventh person to try to manage the project.

"Any problem you could think of to delay or threaten this project, it's occurred." said Robert Fodor, creator of the idea of WEP and deputy administrator of the joint Labor Health, Education and Welfare work incentive program.

In many ways WEP, although billed as unique, is no more than a composite of portions of existing government attempts to put the unemployed and welfare populations into jobs.

It operates primarily under the same guidelines and regulations that govern the Comprehensive Employment and Training Act program for public service jobs and the WIN program for training and placement of welfare mothers.

The distinguishing feature of WEP, and one of the major sources of contention, is the mandate that anyone deemed able to hold a job accept work or lose benefits. Extensive efforts by federal, state and local governments to make enough jobs available also set it apart.

Unlike a program is Utah, the only state previously authorized to deny federally funded benefits for refusal to work, WEP combines the recipients of the three largest assistance programs nationally in an attempt to treat them with "equity." Food stamps, Aid to Families with Dependent Children (AFDC) and General Assistance, the completely statefunded program for singles and childless couples, have been placed under a single administrative authority.

"The basic idea is to divert people from coming into welfare," said Thornas Bruening, Department of Labor coordinator for the project in Washington. "If the staff and administrators feel the person is suitable for a job, there is a procedure for making that person ineligible for certain welfare benefit."

Thus, in the tiny settlement of Becker and the medium sized town of Buffalo, located in Minnesota's Sherburne and Wright counties, respectively, all "employable" applicants for the three kinds of aid will be place in a job, sent on job search or trained. Eight or nine other Minnesota counties will be added soon, state officials said.

"To what extent can people be forced to work?" asks Barbara Boyle of the 5,000-member Minnesota Recipients Alliance, who asserts that "polls have shown that the poor have as high a work ethic as the middle class in this country."

Another concern expressed by Boyle's group along with the 60 unions, social activists and community action workers who formed a coalition last year to stop or modify WEP, is the rationale for testing this method in Minnesota.

She pointed out that the state has higher rates of employment, education and job skills that many parts of the country more burdened by welfare populations.

In May, Minnesota's unemployment rate was 3.5 percent, compared to the national level of 6.1 percent. It ranked 13th last year among states in expenditures on AFDC, the largest federal income support program, spending $150 million.

WEP's critics, among them officials of the counties that rejected the experiment, say they suspect the federal government is trying to use Minnesota to test a program that might not be acceptable elsewhere, to make points that would improve the congressional prospects of Carter's proposed Better Jobs and Income Program.

"Those people down in Washington thought they were going to bring a program in here and we'd be a rubber stamp," said Keith Maurere. Stearns County commissioner and member of the welfare board that voted unanimously to reject WEP.

Labor Department officials who created the WEP idea say it is neither a true test of the Carter proposal nor an attempt by the federal government to use a state experimentally.

WEP was actually several years old as an idea and well on the way to implementation in Minnesota when Carter revealed his welfare revision plan.

"We didn't solicit Minnesota," said Fodor. He said state officials heard about the work equity plan and sought Labor funds to try it out.

Whatever the intentions of its creators, WEP has become closely associated with the administration's plan, in the opinions of its supporters and detractors alike.

Rep. Richard M. Nolan (D-Minn.), who said he has been a "facilitator" between the state, federal and county officials trying to sort out authority for running WEP, characterized it as "clearly the intention . . . that it be a test of the president's welfare reform program."

Jodie Allen, special assistant to Labor Secretary Ray Marshall and an early proponent of the work equity idea, said the administration will be "looking at the Minnesota project for early experience in what we may later be starting" for welfare revision.

A Labor Department summary of the Minnesota project said it was intended to show the job readiness of the welfare population, "to allow better estimates of the number of jobs that would need to be created under BJIP [the Carter proposal] and thus the overall cost of the BJIP jobs component."

State officials said the experiment, although temporary, will raise the skills and employability of some Minnesota residents, but county authorities said the two-year limit on WEP would put participants out of a job and again on assistance after the two-year grant runs out.

Stearns County's Maurer said he objected also to special advantages given WEP registrants over those in other employment programs. They are eligible for up to $30 a week in bonuses for going to school, relocation money if they find a job in another area and "a grivance procedure that makes the United Mine Workers agreement took weak," Maurer said.

Among other criticisms and concerns leveled at the WEP project, the public employes union, the American Federation of State, County and Municipal Employes, fought, successfully, to have participants paid prevailing wages rather than the minimum rate of $2.65 an hour.

"We've been working so hard to bring the pay in state institutions up to decent living wages," AFSCME's Minneapolis spokeswoman Carol Flynn said, "If WEP paid anything less than that they'd clearly be depressing the local labor market."

Meanwhile, the program will soon open at its only urban test area in Minnesota, the St. Paul center. In the first two weeks of operation at Becker and Buffalo, the program registered 35 welfare applicants and placed two of them in jobs, WEP administrators said.

The Carter administration has at least 15 additional welfare revision demonstrations in its plans, according to Jodie Allen. Each test area will get 200,000 to $300,000 to plan the projects.

The administration has asked Congress to approve $200 million in the fiscal 1979 budget for implementation of the welfare demonstration grants.