THE CREAKING AND GROANING noises that you may have heard recently in the vicinity of the White House are the sounds of wage-price guidelines being bent. The forthcoming Teamsters' wage increases are not likely to fit under any simple and rectilinear application of the 7 percent rule. That makes it necessary to do a little anticipatory bending. The White House is following the sound principle that a structure incapable of bending is very likely to break. It would be a disaster, and not only for the administration, if the guidelines collapsed in their first real test.
The immediate issue in the Teamsters' case is the fringe benefits. Characteristically, the Teamsters have made larger promises to their members about health and pension benefits than the present contributions will reliably support. Recent federal legislation is now forcing a higher level of funding. If the larger contributions were counted as wage increases-as the original guidelines would have done-any increase held to 7 percent would have left very little more cash in the paycheck. Nobody can seriously expect the Teamsters to settle for very little more cash in the paycheck. Whether the negotiations will stay within the guidelines, even in their present non-rectilinear form, is highly unpredictable. But the revisions of the past week have at least made it possible.
Is the administration wrong to massage the guidelines into a slightly different shape in the interest of enabling them to survive? Clearly not. The new pension and health benefit rules are a bit unfair, you might argue, to thos unions that have always run their benefit funds with great integrity and rigor. But the basic lesson here is that guidelining is a complex enterprise in which just about every case is special. The recent revisions are not likely to be the last ones.
But anything worth doing is worth doing badly, as G.K. Chesterton once observed. The guidelines are worth defending, even though it is going to have to be a defense with a lot of retreats and evasions. The value of voluntary guidelines is to provide the ountry with at least a rough measure of fairness in distributing the burdens of inflation and unexpectedly low economic growth.
Those burdens are growing. The Labor Department calculates each month the average weekly earnings of people whose jobs are below the supervisory ranks. It then adjusts these earnings are going up, of course. But when you take out inflation and federal taxes, the average has dropped three percent over the past year. People are now trying to push their wages up faster than inflation, to get their purchasing power back at least to last year's level. But some are in stronger positions than others to press that claim and the guidelines are, among other things, an attempt to persuade the strong not to push ahead at the expense of the weak.
Voluntary guidelines are an attempt at a social compact-an idea that has never enjoyed much support in this country, but one that could be extremely useful in the present circumstances. A social compact is difficult to maintain even in countries less sprawling and heterogeneous than this one. Britain's success with it now seems to be eroding. Last summer the British labor unions refused to continue their voluntary wage limits, and last week the government nearly fell when it attempted to impose sanctions on a company that had overstepped the line. Examples like that from abroad are frequently used in the United States to argue that guidelines never work. To the contrary, in our view they show that, while guidelines are never totally successful, they can be very helpful in the struggle to keep prices from rising and currencies from falling. To the extent that a country's guidlines work at all, they make it unnecessary to rely on other and harsher methods. Of all the responses to inflation, guidelines-broad agreements among working people and business to exercise moderation-is the only one that will not drive up unemployment.