The most dramatic shake-out in the economy is the one in the Farm Belt, but the more important one continues to be the shake-out that is taking place at the bargaining table. The pilots' strike at United Airlines yesterday morning was a further reminder of this. The pilots union does not evoke universal sympathy, either in or out of the labor movement. A senior pilot at United can earn as much as $150,000 a year, and the pilots have not always respected the picket lines of other unions.
But United's dispute with its pilots is very much a part of the concessional labor history of the last several years. Most markedly with the "givebacks" in some basic industries during the last recession, but in many smaller ways as well, labor has given important ground. That has helped reduce inflation, and in the long run workers like everyone else may gain from it. But in the short run some workers have lost.
The issue in the United case is a two-tier wage system. The airline, the nation's largest, wants to create two pay scales for its pilots. The existing pay progression would remain in effect for those already employed. A lower progression would apply to those hired in the future. Just as in other concessional contracts, the company would reduce future labor costs, but not at the expense of current employees. The current union members could make the concession but not feel the pain.
A number of troubled industries have turned to variations of this two-tier system in recent years. The postal contract was last year's leading example; the aerospace industry has been another. But the newly deregulated airline industry, where previously unheard-of price competition is exerting enormous pressure on companies to cut costs, is where it has turned up most. United wants two tiers for its pilots in part because a different union agreed to a two-tier system for American Airlines pilots in 1983.
Economists say that labor costs are the main determinant and best measure of the underlying inflation rate in the economy. In each of the four years 1981 through 1984, labor costs per hour rose less than the year before. In 1981 they rose 9.4 percent; last year only 4.2 percent. Labor has responded to the travail of the last few years by reducing its demands on the economy. That is important -- and it is what the United strike continues to be about.