THE AFL-CIO does not like wage guidelines, never has liked them and doubtless never will like them. Its loud and angry denunciation of President Carter's wage-price policy was not unexpected nor - fortunately - will it be fatal. But it certainly doesn't do much to improve the chances for getting through the coming year without serious economic trouble.
In 1964, during the previous attempt at voluntary restraint, the AFL-CLO's president, George Meany, told President Johnson that "they're your guidelines and not mine." Two years later and airline machinists' strike exploded them. In 1971, Mr. Meany denounced President Nixon's mandatory controls before, during and after they were in effect. Now the AFL-CLO condemns the Carter guidelines as "inequitable and unfair."
Mr. Meany's reasoning has not changed over the years. The evidence supports his view that restraints are much easier to enforce on wages than on prices because employers help the government keep wages down. As to profits, professional fees and executive salaries, guidelines are much harder to carry out. That's the imbalance that Mr. Meany is objecting to. But it's also true that inflation is very unfair in distributing its burden and losses. It is a great tax on people who work for wages, who save their money, who rely on future pension rights, who do not speculate for capital gains - the kinds of people that include most union members. It's a matter of alternatives. If labor doesn't like the Carter guidelines, what does it like?
The AFL-CIO says that it likes mandatory controls, legislated by Congress. That's a queer choice, in view of labor's experience and bitter protests under the Nixon controls. We take labor's current position on controls to be a purely tactical posture - a defense against future accusations of refusing to help curb inflation. In reply, labor will repeat that it supported the remedy that Mr. Carter declined to use.
There is more than one reason why Mr. Carter does not like mandatory controls. The first is procedural. The controls law has expired. If Mr. Carter went to Congress for new legislation, as the AFL-CIO says it wants him to do, every company in the country would immediately start raising prices, trying to get the jump on everyone else before the freeze came. Getting the legislation through Congress would not be easy or quick. In the meantime, the inflation rate would soar to Argentinian levels.
But there are deeper reasons not to use mandatory controls. As we have argued before in this space, they are a medicine to be used only in great emergencies and only for short periods.Nearly every industrial country has tried one kind or another of controls, and nobody has had satisfactory results. As the Nixon controls demonstrated, mandatory controls are anticompetitive; industries begin to move like cartels. They have inflationary effects, because they create shortages. Above all, they create inequities faster than the wage and price controllers can resolve them. You might think, from reading the AFL-CIO's demand for this kind of controls, that they were a guarantee of social equity. But if you remember what happened in 1971-73, you know better.
Mr. Carter's guidelines are not widely popular. People grumble about them, plead their specual circumstances and keep trying to catch up with prices. In Great Britain, in contrast, the labor unions have supported with extraordinary fidelity the government's fierce hold-down on wages. But that discipline took only after the inflation rate had soared above 30 percent for a brief but deeply frightening period of a few months. The question is whether this country can learn from others' experience and catch its inflation before, as in Britain, it approaches national disaster.