(3 of 3)
Labor units at particularly distressed companies have accepted actual pay reductions. Employee groups at several airlines, including Pan American and Braniff, have agreed to a 10% wage slash. The United Rubber Workers union will forgo cost of living increases at a new Goodyear plant to be built in Akron.
But other labor negotiators have balked at making exceptional sacrifices. The Transport Workers Union, for example, has flatly rejected a proposed pay freeze at American Airlines. Says James Jackson, president of TWU Local 513 in Dallas: "Before I would consider recommending a pay cut to our members, I would have to see Al Casey and Bob Crandall [American's two top executives] waving tin cups on Main Street."
Most labor leaders feel that their union members, particularly the unemployed, are being unfairly drafted as foot soldiers in the fight against inflation. As a result, the labor officials have been loudly critical about the Administration's policies of budget cutting and tight money. In an attempt to ease tense relations between unions and the White House, Reagan last week invited the executive council of the AFL-CIO, headed by President Lane Kirkland, to the Oval Office for a quiet chat. As a gesture of reconciliation, Reagan suggested that he might allow some of the former air-traffic controllers who were fired during their strike last summer to reapply for Government jobs, though not at their old posts in control towers.
The union leaders, however, demanded much more from Reagan. They urged the President to call for an emergency antirecession offensive that would include public works programs, new housing projects, more Government jobs and a new Reconstruction Finance Corporation to revitalize industry. Predictably, the President did not indicate that he was about to change his economic policy.
Throughout his political career, Reagan has steadfastly believed that the key to prosperity is a dramatic curtailment in the Government's role in the economy. As the recession deepens and the unemployment rolls grow in the coming months, the President's hands-off resolve will be severely tested. —By Charles Alexander. Reported by Gisela Bolte/Washington and Patricia Delaney/Chicago