Labor angered by plan to revise inflation index
Organized labor has added government plans to revise the Consumer Price Index (CPI) to its lengthening list of complaints against the Reagan administration. Union spokesmen charge that it is ''tampering'' and ''finagling'' with figures that directly affect the income of millions of Americans.
The Bureau of Labor Statistics, charged with measuring changes in consumer prices and other indicators of the economic well-being of the country, announced Oct. 27 a dramatic revision of the CPI intended to insulate the index against ''distortions'' caused by wide swings in housing costs.
The result is expected to be a slower rise in the CPI beginning in 1983 and eventually reduced increases in wages and pensions tied to the index.
Lane Kirkland, president of AFL-CIO, promptly charged that the change would ''undercut our most important measure of inflation.'' The United Auto Workers, the union that did the most to establish cost-of-living contract clauses tied to the index, said that the attempt to lessen inflation by changing the housing component is ''like trying to cure a fever by breaking the thermometer.''
The revised CPI will be first issued in January 1983, but those parts of the index used for cost-of-living adjustments under private and government wage contracts and for increases in social security and other government benefit programs will not go into effect until 1985.
If the revised housing component had been in effect in 1980, workers under cost-of-living contracts would have had smaller adjustments in hourly wages. Social security benefits would have risen 10.3 percent instead of 11.2 percent and monthly benefits for an average retiree living alone would have been $370.29 rather tha $373.31, a relatively small reduction that would have saved the government $1 billion.