Word: wages
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Dates: during 1970-1979
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Carter's advisers fear that the 1979 negotiations in the trucking, auto and construction industries will lock the economy into a cycle of 10% wage and benefit boosts in each of the next three years, to be followed by jarring price rises. The President has exhorted workers and managers to hold wage-price increases below the average for the past two years, but aides now think that the "deceleration" program is too vague. Many want Carter to urge that all wage settlements be held to 8% or less...
...increases that truck lines might seek in order to pay for a high settlement with the Teamsters; let in more lower-cost imported steel if American mills raise prices too much. Government officials are talking about administering the 1931 Davis-Bacon Act in a way that would hold construction wages down rather than pushing them up. The act commands that contractors pay the "prevailing" area wage on federally aided construction jobs, but gives the Administration wide latitude in defining what that prevailing wage...
Another idea is to delay for a year increases in the federal minimum wage-from $2.65 an hour to $2.90-and in Social Security taxes scheduled for January. Miller last week urged Congress to do just that, and he has allies in the Administration who calculate that the delays would knock a full percentage point off next year's inflation rate. But the delays would so anger-labor and old people that the Administration is not expected to ask for them. Most likely it will merely pass the word that it is not opposed to delays and hope that...
...final possibility is TIP (for Tax-based Incomes Policy). This is a long discussed plan either to impose penalty taxes on employers who raise wages too much, or to give tax cuts to workers and companies who keep wage and price boosts moderate (see box). Carter may introduce a TIP plan in the next session of Congress...
...wage-price controls are unworkable, and presidential jawboning too easy to defy, and balancing the budget takes too long, and tight money threatens recession, what is left to fight inflation? The answer, Washington officials are reluctantly concluding, just might be to use income taxes as a stick to beat or a carrot to lure workers and companies into holding wages and prices down...