The Guidelines Pass a Test

Settling for less than 7%

The Administration seemed to chalk up a qualified victory last week in the first major union settlement under President Carter's wage guidelines. After tense talks, the oilworkers finally wrapped up an agreement with Gulf Oil and Amoco. The deal more or less stays within the White House wage standard, which calls for a limit of 7% on pay and new benefit increases over the life of a contract.

The pact would give more than 60,000 of the members of the Oil, Chemical and Atomic Workers Union (OCAW) a 73-c--an-hour pay boost in the first year, which is an increase of 8%, and a 5% raise in the second year. That averages out to just under 7% annually, but there is also a clause allowing a reopening of contract talks in the second year.

Company contributions to the medical insurance plan would climb $12 a month per family, to $84; the percentage rise exceeds the guidelines, but the amount of money involved is small--less than workers had demanded. Union members were expected to approve the settlement, and it will probably serve as a model for the 98 other firms involved in the industrywide bargaining.

Union and company negotiators agree that without the guideposts the settlement would have been bigger. The President was particularly eager to hold the line on the oilworkers agreement because, as the first settlement under the guideposts, it may also set a pattern for this year's heavy calendar of labor talks. The Teamsters, whose contract expires March 31, will provide the next big test. Though they are expected to put up a tougher fight than the OCAW, the oil settlement is bound to have some restraining influence.

Carter got some other good news on the labor front last week. Seeking to narrow the wide rift that has developed between the Administration and labor, the President met at the White House with a delegation of top union leaders headed by A.F.L.-C.I.O. President George Meany, who has been brutally critical of the wage-price program. After the session, Meany indicated that he would soften his objections over policy, making it easier for the Administration to deal with unions one by one.

The President, however, faces much less success with his proposal for "real wage insurance." Under it, groups of employees who settle within the wage guidelines would get income tax credits if inflation were to rise above 7% this year. The measure goes to Capitol Hill this week, but so many Congressmen believe that the plan would be an administrative nightmare that it is virtually dead.

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