Business: LABOR’S OPENING FIGHT FOR HIGHER WAGES

UNITED STATES labor leaders have declared war on the Nixon Administration’s anti-inflation wage strategy, and the first big battle is the strike against General Electric Co. Last week a dozen unions representing 147,000 G.E. workers banded together and struck the company’s 280 plants in 33 states. It was the first nationwide strike against G.E. since 1946. There was some violence on the picket lines as union men scuffled with police.

In the Alice in Wonderland logic of inflation fighting, the Administration’s policymakers welcomed the confrontation. They feel that a tighter economy will force lower wage settlements. President Nixon says that he wants everybody to show “backbone” in resisting inflationary wage and price increases rather than relying on White House “jawbone.” General Electric, the fourth largest manufacturer in the country, is notorious among union men for its stiff take-it-or-leave-it negotiating tactics. Thus, G.E. seemed an ideal battlefield on which to Jet management and labor fight to a settlement while the Administration watched from the sidelines.

Olympian Unconcern. Union economists argue that the worker has been hardest hit by inflation and is the one who will get squeezed the most in a tighter economy. A.F.L.-C.l.O. President George Meany said last week that labor would not buy Nixon’s call for wage moderation. He promised labor will continue to press for more and more, as prices continue to rise. In major contracts negotiated through September, the median increase in wages and fringes has jumped to 8.1% as against 6.6% for last year; in the construction trades, it is 12.5%. These are the kinds of increases that Nixon hopes management will resist.

Paul McCracken, chief of the President’s Council of Economic Advisers, expects many strikes ahead, but is not too worried about their long-run effect on the economy. Indeed, some Administration policymakers profess a rather Olympian unconcern over the impact of strikes. Partly for that reason, the Administration is determined to stay out of labor disputes. Labor Secretary George Shultz emphasized its stand a week before the strike at a meeting of the Business Council, the elite group of 200 business leaders headed by G.E. Chairman Fred Borch. Briefing newsmen, Shultz predicted much labor unrest ahead, but declared that the Administration would not often intervene. Then he turned to Borch and said with a sort of locker-room bonhomie: “So, Fred, don’t you come around.” With a bit more edge in his voice, Borch shot back: “And don’t you come around.” Comments such as these provoked one of the strike leaders to charge that Shultz was partisan to G.E. and demand that he resign.

No matter what the strike settlement, it will set a pattern for future labor negotiations as major contracts expire. The confrontations will involve railroads in December, shipbuilding and trucking in March, and meat packing and autos in September.

The trouble with General Electric as the testing ground for the President’s hands-off policy is that the strike is as much ideological as economic. The enemy is what the unions call “Boulwarism,” a labor-relations strategy unveiled in 1948 by Lemuel R. Boulware, then a G.E. vice president and now retired. Boulwarism is based on two tenets. First, the company should make a “firm, fair” offer at the start of negotiations and refuse to budge from it. Second, the company should engage in vigorous “employee marketing” to sell the merits of its offer.

Union leaders have hated Boulwarism for years, but division between G.E.’s two big unions—the International Union of Electrical Workers and the United Electrical Workers—kept them from making a successful issue over it in the past. Now the entire labor movement is committed to the fight to kill Boulwarism. The strike has created an unusual alliance of twelve unions as disparate as the teamsters, the steelworkers and the autoworkers. Meany has pledged the entire A.F.L.-C.l.O. to support the war “until the hour of victory.”

“Patronizing Attitude.” General Electric offered wage increases of 6% to 10% in the first year of the contract, but nothing more than a promise to reopen talks in the second and third years. The unions want a firmer guarantee of increases: an average 10.8% in the first year, 8.3% in the second, 6.5% at the start of the third.

The unions may have a friend in court. The day after the strike began, a federal court in New York attacked Boulwarism. It ruled that G.E. had violated the National Labor Relations Act in 1960 by refusing to furnish information requested by the union, trying to deal directly with union locals and presenting a personal-accident-insurance program on a take-it-or-leave-it basis. Judge Irving Kaufman chided the company for its “patronizing attitude” and charged it with an overall failure to bargain in good faith.

G.E. intends to appeal, denying that the circumstances of the present strike are the same as those of nine years ago. Whatever happens in the current strike, however, G.E. can hardly lose. The day after the workers walked out,Chairman Borch told a stockholders’ meeting that prices of many products will be raised as soon as the dispute is settled. The company can then pass the price of the wage package right on to the consumers.