Bargaining trends: gains in 1984; prospects for 1985

AFL-CIO American Federationist, The, March 30, 1985 by Neil Gladstein

Union members and their bargaining agents can expect 1985 to be similar to 1984. Unemployment will stay high, the overvalued dollar will continue to hurt export and import sensitive industries, the consequences of deregulation will still play havoc in transportation, and many employers will threaten workers with plant closings. However, unions showed in 1984 that despite these and other problems, economic and non-economic gains can be made. Worker solidarity and creativity turned 1984 into one of the more successful bargaining periods in the 1980s.

In 1985, about 3.5 million workers are covered by major collective bargaining agreements (defined as involving 1,000 or more workers) that are due to expire or to be reopened. Negotiations will cover about 2.4 million workers in private industry and 1.1 million state and local government employees. The sectors which will see some of the heaviest bargaining include rubber, electronic products, trucking, construction, clothing, and auto (Chrysler). There are also about 650,000 workers under contracts that expired or were reopened prior to Jan. 1, 1985, that need to be settled during this year.

Three-fifths of these workers still under negotiations work in rail transportation.

In the federal government, where bargaining rights are severely limited, workers are awaiting the outcome of the budget proposals under which President Reagan has asked for a 5-percent wage cut for federal employees. This wage cut proposal contradicts the spirit of federal law which requires the government to pay salaries equivalent to those in private industry. Last spring, the Bureau of Labor Statistics (BLS) reported that federal government workers earn 18 percent less than people working in the same kind of job in the private sector.

Collective bargaining agreements negotiated in 1984 contained a wide range of terms covering both economic and non-economic work related issues. Since many of these benefits do not have precise costs or values it is impossible to quantify them, and they are not reflected in most federal statistics.

BLS found that major private sector collective bargaining agreements reached in 1984 contained average wage increases of 2.4 percent for the first year. Included in this average are workers who had wage freezes and decreases. For the 77 percent of all workers covered by major contracts that did have wage improvements, the average first year increase was 3.8 percent. For major state and local government collective bargaining settlements in 1984 the average first year increase was 4.8. These figures do not include bonuses, profit sharing, stocks, lump-sum payments, cost of living adjustments (COLAs) or other financial payments.

The average effective wage adjustment for all workers covered by major settlements from 1984 or from previous years was 3.7 percent in the private sector and 5.0 percent in state and local government.

These figures by BLS show that the wage changes were close to the inflation rate. The inflation rate in 1984 was 3.5 percent from December to December as measured by the Consumer Price Index for Urban Wage Earners & Clerical Workers (CPI-W).

In 1984, about 700,000 workers, or one-third of those covered by new agreements, settled for some form of lump-sum or bonus payment. These payments are not included in the increases reported above. Employers refused to grant the same amount of money as wage increases. Employers prefer these payments because they are not added into the wage rate base and therefore do not increase the benefit levels for those programs that are tied to the rate base. Also, by being excluded from the rate base these payments will not be included in future wage increases.

Employers facing economic difficulties found unions willing to make wage and work-rule concessions if the companies were able to show real need and a willingness to negotiate on other options. Profit sharing and stock ownership plans were one form of trade-off for which unions bargained. These plans give workers a share in any future recovery that their concessions help bring about. They appeared mostly in contracts with the airlines and in meatpacking. In negotiations with United Press International, the Newspaper Guild also got a seat on the board of directors in addition to 6.5 percent ownership of the company in exchange for a wage decrease.

Two-tier wage structures which pay new employees less are an unfortunate concession that many employers fought for. These two-tier structures were allowed with much reluctance on the part of union members and often over the objections of their leadership. These systems should be eliminated as companies recover from their economic problems. One union has already done this: The Machinists in negotiations with Hughes Aircraft eliminated the two-tier structure that was in the previous contract.

The issue of pay equity or comparable worth is being raised increasingly in collective bargaining. Unions are fighting for increases to close the discriminatory wage gap between female-dominated jobs and comparable male-dominated jobs. To eliminate wage discrimination Service Employees (SEIU) members who are school employees in Vacaville, Calif., will receive increases ranging from 2.5 to 25 percent over a five-year period in addition to regular pay raises. SEIU members who are clerical workers for the city of Berkeley, Calif., will be compensated over a two-and-a-half-year period for past discrimination. Employees of the state of California belonging to SEIU working in female-dominated jobs will receive up to an additional 5 percent pay "realignment" to narrow the wage gap. And the State, County & Municipal Employees (AFSCME) won an agreement from the state of Iowa to end sex-based pay discrimination and to upgrade the pay of employees who have been victims of that discrimination.