The Carter administration has reached tentative agreement with organized labor to create a tripartite board of business, labor and public members to help shape wage restraint guidelines for the coming year.
The accord represents a major political effort by the administration to win over the AFL-CIO, which was so strongly opposed to the existing 7 percent wage standard that it took the administration to court in an unsuccessful effort to block enforcement of the guideline program.
The plan, developed in intensive negotiations between top administration and AFL-CIO officials, is to be presented to a special meeting of the labor federation's Executive Council Friday.
Sources, noting that AFL-CIO Secretary-Treasurer Lane Kirkland was labor's chief negotiator in developing the plan, indicated that they expected it to be approved by the council.
The plan is reported to envision broad advisory powers for the board in drafting and modifying the government's wage standards, along with providing a forum for hearing appeals for exemptions.
It is understood to resemble the tripartite Pay Board created in the Nixon administration to administer wage controls, although in this case the wage limits would be voluntary. The idea is to win greater cooperation from business and labor by involving them directly in the process. Labor bitterly opposed the current 7 percent guidelines for wage and benefit increases , claiming that it had no voice in its development.
While the program would remain voluntary and the board's powers would be advisory, organized labor's voice would be enhanced by its ability to torpedo the whole effort by quitting. The board would be "advisory with a capital 'A'," said one government officials. "It would have clout," he said.
The second year of the guidelines program starts Monday. It is understood that new guidelines will be announced shortly, subject to modification after review by the pay board.
Implementation of the pay board plan also hinges on business cooperation. "That side of the equation simply hasn't been nailed down," said one government official. An official of the U.S. Chamber of Commerce said the chamber has misgivings about the whole guideline program and is taking a wait-and-see approach.
Meanwhile, the government's Council on Wage and Price Stability moved on at least three fronts to adjust its guidelines program. The council:
Allowed the B. F. Goodrich Co. to compensate for a wage guideline violation by agreeing to hold the line on future price increases, the first time the council has allowed such a wage-price tradeoff.
Agreed to let companies give workers a slightly larger wage and benefit increase this year if they held to the 7 percent standard last year and did not pay cost-of-living increases or seek other guideline exceptions. Such workers would be eligible to receive 1 percent more than the new guidelines will allow.
Said companies that came in under the wage or price guidelines last year can carry over "unused allowable . . .increases" into the current year.
The Goodrich settlement resolves a knotty problem for both the administration and the rubber industry. The industry faced loss of hundreds of millions of dollars in federal contracts for exceeding the wage guideline in a contract with the United Rubber Workers, but the administration was reluctant to go as far as to buy tires and related products from foreign producers.
Under the Goodrich settlement, the company agreed that "the portion of the [URW] agreement that exceeded the allowable pay standard would not be passed on to consumers in the form of higher prices." This means it agreed to a "price limitation in the second year that is more restrictive than is otherwise imposed by the price standard," the council said. The council is negotiating with other rubber companies along similar lines.
CWPS calculated the Goodrich contract at 26 percent over three years, well above limit envisioned by the standards.
The council's action on the wage standard was in line with an earlier policy decision to permit higher wage increases for workers, estimated at 90 percent of the work force, who do not receive automatic cost-of-living adjustments. The 1 percent will be added to whatever standard the administration sets for wages for the coming year.