Page 2-Thursday, February 8, 1979-The Michigan Daily
SA YS INFLA TION PROGRAMS WON'T WORK
Bosworth attacks Carter
WASHINGTON (AP) - A top ad-
ministration inflation fighter said
yesterday that without public
cooperation, President Carter's
"voluntary" wage and price guidelines
"I'm ready to admit right now that
under a voluntary program, if everyone
wants 'to lie and cheat, you can't catch
anybody," said Barry Bosworth, direc-
tor of the Council on Wage and Price
BUT BOSWORTH added that lack of
cooperation would undermine even a
"mandatory program of wage and price
controls, and he cited evidence of broad
business and public support for Car-
"An anti-inflation program only
works if the people of this country want
the program to work," he told the
House Government Operations sub-
committee on commerce,' consumer
and monetary operations.
Bosworth also said the council did not
need a large increase in staff to monitor
prices and wages because it would be
receiving economic reports from other
government agencies and data
gathered for the consumer price index.
BUT HE ADDED that the council's
most effective tool in enforcing the
guidelines will be the requirement that
companies certify that they are in com-
pliance in order to obtain government
contracts of $5 million or more.
Bosworth said companies are
'unlikely to lie about their compliance
because that would leave them open to
substantial penalties under the terms of
the government contracts.
The President's program, announced
last fall, asks companies to hold wage
hikes to seven per cent and price in-
creases to 0.5 per cent below their
average price hikes for the previous
two years, or limit them generally to an
average of 5.75 per cent. Beginning in
March, the administration plans to
publish the names of firms that violate
that standard. .
AS PART OF his prepared testimony,
Bosworth said 41 companies had
requested exceptions from the wage
guidelines and five from the price stan-
Most of the firms asking to raise
wages above seven per cent cited
"acute labor shortages" for specialized
employees and "tandem" contract set-
tlements. "Tandem" settlements would
apply in industries where historically
workers at different companies had
received -the same wage and where
some contracts were signed before an-
nouncement of the wage guidelines.,
Bosworth.said five exceptions have
been granted on wages, all under the
"tandem" rule. He said the other
requests were under review, but added
that no company had yet been found in
violation of the guidelines.
THE GUIDELINES formally take ef-
fect Feb. 15. Alfred Kahn, chairman of
the wage-price council, announced
Tuesday that more than 200 of the
nation's top 500 corporations had
agreed to meet the guidelines. He ad-.
ded that most of the others had asked
Meanwhile, Special Trade Represen-
tative Robert Strauss asked Congress
to renew the President's authority to
waive so-called countervailing duties
In testimony before the House Ways
and Means Committee, ,Strauss said
enactment of the legislation is crucial
to the success of multi-national trade
negotiations nearing completion in
COUNTERVAILING duties are im-
posed by the United States to offset the
effect of foreign subsidies on imports
reaching this country. However, the
President occasionally used his
authority to waive the duties, often af-
ter negotiating a reduction in the
foreign subsidy. That authority,
however, expired last month and the
automatic rise in duties has become a
sticking point in the trade talks.
In other economic developments,
Herbert Stein, who was chief economic
adviser to the Nixon administration,
said a steady slowdown in the economy
is "the essential step to reduce the in-
Stein told the Joint Economic Com-
mittee that last year's economic growth
of 12 per cent, unadjusted for inflation,
should be cut to about six per cent over
the next five years.
'U' may limit pay
hikes to 7 per cent
j (Continued from Page 1)
Actually, Governor William
Milliken's slim $10 million increase in
University funds slotted in his proposed
1980 budget will make it nearly im-
possible for the University to afford
more than a seven per cent faculty hike
anyway, according to Interim Univer-
sity President Allan Smith.
The regents' budget request for the
next fiscal year, sent to the Governor's
office last October, called for a $24
million increase over last year's
allocation, citing over a 10 per cent
faculty increase as one of the necessary
Administrators said they had hoped
large boosts would help equalize salary
raises for the faculty, which had in-
creased less than those of faculty
members at comparative schools in
WITH THE University's budget in-
crease request slashed by 60 per cent,
however, Smith said there is "just no
way" increases over seven per cent are
Shapiro said the guidelines are still
not clearly defined, but he said it seems
as though compliance with them is
becoming more mandatory.
According to Brinkerhoff, there is
presently a courtcase which will test
whether the government can refuse to
fund an institution due to non-
compliance with a "voluntary"
Along with salary guidelines, Carter,
in his speech last October 24th, called
for price hikes of no more than half of a
peI, cent less than the average in-
creases of a given institution's 1976 and
According to Brinkerhoff, this would
allow next year's tuition to be increased
about 9.5 per cent..Last year's tuition
was raised about nine per cent.
BUT BRINKERHOFF added that,
University officials "won't know about
tuition increases until after the state
budget is finalized," probably in early
The administrator alsor said the:
University's 6.9 per cent increase,'
which has been proposed by the
Housing Division is within the economic,
Vice-President for Academic Affaris
Harold Shapiro said the University.
would probably comply with the
guidelines despite possible requirement
because "on the whole, the program is
in the. . . best interests of the coun-
Shapiro added that during a trip to
Chicago last week he was told by of-
ficials from other Big 10 schools that all
the schools in the division would~
probably work within Carter's plans.
LATE LAST month, Brinkerhoff ap-
pointed a committee of nine faculty
members to keep abreast of the
guidelines and to keep him informed.
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ANN ARBOR PLASMA CORPORATION
City response mixed
to inflation guidelines
Doily Photo by ANDY FREEBERG
Guest Viewpoint lecturer Mike Harrington, chairman of the Socialist Organizing
Committee of the Democratic Party, addressed a crowd of over 400 last night
'cruel inn ocence'
(Continued from Page 1)
(Continued from Page 1)
Bandkau, manager of Discount
Records said, "Retail is probably one of
the lowest paying jobs there is. You're
just penalizing the people that can af-
ford it least."
BORDERS MANAGER Jo Gable
said, "It seems to me patently absurd
to apply those wage increases to
someone in a book store who isn't
pulling in $10 per hour." But he also
said Borders' wage increases generally
fell within that range anyway.
White Market's George Robinson
said, "It (the wage guidelines) doesn't
affect us whatsoever. If they (em-
ployees) deserve a raise, they get it."
An exception to this sentinient is
Jacobson's. A spokesperson from the
store's headquarters indicated that
Jacobson's management hopes to com-
ply with the guidelines. The spokesman
said the guidelines were based on a
gross margin, which is the difference
between what Jacobson's pays out and
what it charges. The spokesman said
that Jacobson's would wait until the end
of its fiscal year to take action on any
increases in its gross margin.
ANN ARBOR'S restaurant business,
is in the same position as most retail
outlets. Bicycle Jim's recently in-
creased prices but this was to keep up
with rising meat costs, an increased.
minimum wage and the state's new
drinking law. According to manager
Suzanne Philp, prices are controlled by
how much the public will pay rather
than guidelines. "They only pay so
much for a certain item. It's more what
the traffic will bear."
Ernest Harburg, co-owner of the Del
Rio Bar and the Earle, said price in-
creases are "based on the reality of
business and the market place out
there." This also applies to wages, he
The local housing market also seems
unlikely to comply with Carter's plan.
McKinley Associates' Michigan
Regional Manager Don Taylor in-
dicated that the company would try to
stay within guidelines but added, "if
taxes and utilities have gone up ten to 12
per cent, which they have, then we'll'
have to remain viable."
ACCORDING TO Mayor Louis
Belcher, the city government has, so
far, ,emained within guidelines regar-
ding wage increases but 'he said he
could not determine if rate increases,
have gone beyond those guidelines.
Belcher indicated that the city was,
"Certainly going to use the President's
guidelines in labor relations. We have
several unions in City hall and we're
going to negotiate new labor contracts
He indicated, however, that the suc-
cess of maintaining the guidelines
depended on the results of contract
negotiations with city labor unions.
Belcher said he has ordered City Ad-
ministrator Sylvester Murray to
prepare background information, on
rate increases in subcontracting and
supplies for City .Council's con-
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The workers have "something to lose
other than their chains," according to
Harringlton, such as pension guaran-
tees, Social Security payments and the
like. Such radical solutions are just not
feasible, he said.
"We try, to stand on the left wing of
the possible," proclaimed Harrington.
The author listed several examples of
possible legislation to help alleviate the
current situation. Since many multi-
national'corporations rely on the Over-
seas Private Investment Cor-
poration-essentially a unit of the
government-to insure their invest-
ments abroad, he said, certain stan-
dards could be set for any corporation
which wished to receive the coverage.
Such guidelines, which include bans on
discrimination by the companies,
currently exist in Sweden, according to
HE SAID REFORMERS must be
patient, realizing the current world
economic situation has been 400 years"
in the making and is so firmly entren-
ched that it is unlikely to change soon.
After the lecture, which lasted only
an hour, Harrington fielded questions
from the audience. After dealing with
several charges that his policy was not
sufficiently radical, he said he did not
want to emphasize the "quarrels of the
Left," but instead wanted to attempt to
'realistically assess the probable
solutions for the oppressed conditions of
the Third World.
He said people interested in reform
must live with the fact they will
probably not live to see any drastic
changes result from their efforts.
Harrington concluded by stating the
U.S. and the rest of the Western nations
must work" in every way possible "to
step being cruelly innocent, and start
being decent to the world."
Soviets consider moving
art exhibit to Ohio State
-Aalph Herbert-Nancy Hodge
Saturday, Feb.,10-8 p.m.
Museum of Art
Adi ssion Complimentary
(Continued from Page 1)
Shapiro, the University's represen-
tative to the Committee of Institutional
Cooperation (CIC)-the group that
originally planned the festival-also-
believes the University acted accor-
"The purpose of the festival is to
promote various aspects of Russian art
and culture," Shapiro said. "It is most
appropriate that writers like Brodsky
and Solzhenitsyn are included in the
SHAPIRO SAID the University made
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\ SU NDAY F EBRU A RY 11; 1979
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* Exhibits on the Latest in Wedding Gifts,
D fn r - - v'l~ r- a n Tr aalF i nn
the festival program public nearly two
months ago, but it wasn't until two
weeks ago that the Soviets launched
their first objection.
He said, "We didn't have any inten-
tion of offending anyone and I didn't
think having Brodsky participate in the
festival would lead to this reaction.
OFFICIALS SAID that although art
and culture lovers would suffer-in the
short run, the image of the Soviet Union
was the real loser in the decision to
cancel the art exhibit.
"It would have been a very nice thing
to have," said Shapiro. "And I regret
very much that the exhibit was can-
celled. But it was even more important
for the University to retain it's freedom
in planning activities. Under the cir-
cumstances, we did the only thing we
"It is a loss to a lot of people in the
University community," said Smith,
"and I am one of them."
"The public will be deprived of the
opportunity of seeing some interesting
paintings," said Waller, "but the thing
that saddens me is the image of the'
Soviet Union as a government that acts
humanely has been tarnished."
OFFICALS WOULDN'T specuflate as
to the future of Russian art on the
"I don't think we'll be- trying to get
another too soon," said Metha. "I think
it was a very dumb thing that it was
cancelled. It's just a senseless act."
THE MICHIGAN DAILY
Volume LXXXIX. No. 108
Thursday. February 8; 1979