What Made Meany Walk

WE will not be a part of the window dressing for this system of unfair and inequitable Government control of wages for the benefit of business profits." On that tendentious note, George Meany, autocratic boss of the AFL-CIO, followed through on a recurring threat last week and stomped off the Pay Board. Three other labor leaders walked out with him. Their immediate reason for resigning: the board's decision to override them and cut back the West Coast dock-strike settlement from a 20.6% first-year raise to 14.9%, which itself is more than twice the basic wage guidepost. The surprise departure of Meany and Presidents I.W. Abel of the Steelworkers, Floyd Smith of the Machinists, and Leonard Woodcock of the Auto Workers threatened briefly to overturn the Administration's painfully constructed controls on wages and prices.

President Nixon reacted swiftly to save his program. After hurried meetings with top aides, including Treasury Secretary John Connally and Budget Boss George Shultz, Nixon declared: "I shall not be deterred by the disaffection of a few union leaders who represent only 17% of America's 80 million wage earners." His solution was to continue controls under a rejiggered Pay Board. Instead of a tripartite panel made up of five members each from business, labor and the public, the board will now have five public members and one representative from labor and business. Ironically, Frank E. Fitzsimmons, president of the scandal-scarred Teamsters, who refused to walk out, is for the moment the panel's lone labor spokesman. "Fitz" owes a favor to the President, who commuted former Teamster Boss Jimmy Hoffa's prison term last year.

Politics First. Meany's opposition was inspired more by politics than economics. In the upper ranks of the AFL-CIO, the distrust and dislike of Richard Nixon is so intense that, as one Teamster officer says, it verges on "paranoia." Many months ago, Meany demanded wage-price controls while the President was still voicing an almost theological opposition to them. When the President turned around and embraced controls, Meany held out for a tripartite Pay Board with labor representation--and got it. Meany has not attended a board meeting since November, but he has sent his economist Nat Goldfinger, who for quite a while did all he could to block proceedings and sow dissension.

Even so, labor fared fairly well at the hands of the Pay Board. Four important pay cases came before it, and the board gave unions all they wanted in two of them; railroad workers got a 10% raise and soft-coal miners a 15% increase. But the West Coast dock workers were cut down, and the first-year settlement in the ailing aerospace industry was clipped from 12% to 8%. The unionists had their own way in many policy matters, such as lifting the limit on catch-up settlements to 7%.

Despite labor's spoiler tactics, the panel made progress, the economy picked up, Nixon's chances for re-election seemed to brighten. Thus Meany's position as a "team member" on the board became untenable. He has made no secret of his earnest desire to block Nixon's reelection. The rejection of the dock settlement was the last best chance to quit in high dudgeon, and Meany took it.

His exit is not likely to affect Pay

Board policy; the most difficult hurdles are now behind it. In the past two years, contracts covering about 4.75 million workers came up for renewal. This year the number is 2.8 million, and negotiations are in such noncritical areas as apparel, retail trade and transportation equipment. The major imponderable now is the reaction of Harry Bridges' West Coast dock workers, who have yet to approve or reject the Pay Board settlement. If they thumb it down, a real crisis could follow, and the Administration would have to go to Congress for new strike-restraining legislation to keep the wharves open.

Even Democrats sympathetic to labor's aims are puzzled by Meany's peevish departure. "Labor should be just as interested in price controls, unemployment and the general economic situation as anyone else," notes Senate Majority Leader Mike Mansfield. In abandoning the board, Meany and his union supporters now will become readymade scapegoats if the Administration's anti-inflation efforts fail. They have also provided the President with a potent election issue among the growing numbers of voters who view labor's incessant demands for ever higher wages as irresponsible and unfair.

The main focus of attention from now on is likely to be on the Price Commission, which must lead the fight against rising prices. So far, the commission has done well in curbing prices in areas under its control, especially manufactured goods. But utility rates and rents are only loosely controlled. As for food, the most critical item of all, the board can do practically nothing because unprocessed foods are exempt from controls.

Flyaway Food. The importance of putting some kind of rein on food prices is becoming painfully clear. The Labor Department reported that in February consumer prices jumped at an annual rate of some 6%, largely because of the fattest monthly rise in grocery prices in 14 years--almost 23% at an annual rate. Since the start of Phase II, the consumer price index has risen at a rate of 4.9%, v. 4.1% in the six months before Nixon imposed the freeze last August. Moreover, Council of Economic Advisers Chairman Herbert Stein expects another bulge in meat costs next month because of shortages. After that, he says, an increasing amount of meat coming on the market will push prices down.

Despite spreading public impatience and anger with flyaway food costs, the Administration has done next to nothing to hold them in check for fear of losing the farm vote. Indeed Agriculture Secretary Earl Butz regularly travels through the farm belt holding out promises of even higher prices to come. Most economists are wary about controlling farm prices because it could lead to shortages and rationing. Yet there are alternatives to price controls. The Administration could increase supplies by 1) loosening meat import quotas, 2) reducing some price supports and 3) releasing Government feed surpluses on the market. A start in that direction could well come out of congressional hearings next month that will look into the reasons for rising food prices. Said President Nixon last week: "If food prices don't start moving down, other action will have to be taken." As politicians are discovering, much of the battle of the ballot this year will be fought on the floor of the supermarket.

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