Nixon Strikes Bargain On Wages, Prices With Construction Industry

Contractors and construction leaders accepted a system of "self-regulating" wage boards signed into existence by a Presidential executive order yesterday, ending a two-and-a-half month dispute over wage-price controls.

In return, Nixon reinstated the Davis-Bacon Act. which guarantees union wages on government building projects. Nixon suspended the act on February 23 when a 30-day deadline for the industry to come up with its own proposals expired. The arrangement is based on the recommendations of a Presidential committee headed by Dean Dunlop.

Mutual Understanding

The effectiveness of the allegedly anti-inflationary system depends largely "on the mutual understanding of labor and management in an industry whose future is now being undermined by its own excesses," Nixon said yesterday. The construction industry's average wage increases in 1970 were over 18 per cent and reached 16.5 per cent in the first three months of 1971.

The wage boards will be set up by each craft within the industry to determine whether future wage agreements fall under a set of recommended criteria aimed at restoring a pattern of six per cent increases.

A 12-member "stabilization committee" consisting of representatives of government, management and labor will supervise the boards. The federal government will make public any contracts which exceed the stated guidelines.

Before taking office, Nixon rejected wage-price limitations and maintainedthis position until shortly before he consulted Dunlop, construction management and labor leaders about a temporary wage-price freeze on February 16.

Nixon's suspension of the Davis-Bacon Act was covered under provisions of the Economic Stabilization Act, due to expire in about two months.

The new system, due to go into effect within three weeks, will affect a total of 1400 contracts due to be negotiated by October 31, 1971.