Phone workers may go on hold if contract doesn't answer inflation

Workers negotiating new contracts in two big industries this summer are fighting for cost-of-living provisions to help protect them from future inflationary bites:

* Some 39,000 copper workers on strike across the country are asking a cost-of-living pay adjustment, as well as a substantial hourly wage increase.

* The telephone industry is in the critical last weeks of negotiations covering 701,000 workers who want annual wage increases of more than 9.5 percent and a full cost-of-living adjustment (COLA) when prices rise.

Government inflation fighters see union wage demands as a threat to the expected drop in the US inflation rate this summer.But with the buying power of many workers trailing behind the sharp rise in the consumer price index over the past year, pressures are mounting for higher wages.

"We face a problem trying to keep the rate of wage increases from accelerating," says R. Robert Russell, director of the Carter administration's Council on Wage and Price Stability.

The consumer price index soared an unprecedented 13.3 percent rate in 1979, driven upward by large increases in energy costs and mortgage rates. Average hourly earnings rose by 7.9 percent.In the first quarter of this year, the price index went up at an 18 percent annual rate while pay increases averaged a fraction over half of that.

While wage gains generally have run between 8 percent and 10 percent for more than a year, many workers have received COLA increases due automatically under union contracts. This has eased bargaining pressures in steel, aluminum, and other issues; to unions with full COLA clauses, there is less urgency about demands for large "catchup" raises.

However, many unions have not been able to win contracts that link wages directly to living costs on an unlimited basis.

The strike that began July 1 in the copper industry is basically over cost-of-living adjustments.Copper usually follows a steel industry pattern. When the steel industry, with its serious financial problems, settled with the United Steel Workers (USW), the union agreed to give up 33 cents an hour due as a COLA payment to help pay for a three-year, 35 percent wage and benefits settlement.

But unions that deal with the copper companies, the most important of them USW, struck when the companies demanded a similar diversion of COLA money to pay for increased pension and other benefits. USW said steel was a special situation and a profitable copper industry has no basis for claiming "comparable economic woes."

The union wants wage increases of about 85 to 95 cents an hour over three years, along with benefit increases that would bring the settlement to 35 percent over three years. The industry is standing pat for a lower-cost contract. The strike could be a long one; some in the industry say for several months. Industrial demands for copper are low now and large inventories should be adequate to meet all needs this summer.

Telephone contracts run out Aug. 9 and Bell System companies and the Communications Workers of America (CWA) hope to reach a national economic settlement before then. The parent American Telephone and Telegraph Company insists that it must hold down payroll cost rises that would put Bell System companies at a disadvantage at a time when competition is growing in the industry.

CWA members are militant in demands for a settlement "close to the rate of inflation," an expected 12 percent to 13 percent this year. but they are at a bargaining disadvantage: Because the industry is highly automated, a telephone workers' strike does not seriously affect company operations.