For fifth year in a row, unions accept smaller wage increases to protect jobs
Strong bargaining pressure on unions is continuing to hold down wage settlements. Many labor experts predict next year will be the sixth in a row during which labor unions accept smaller wage increases than in the preceding year. During the first six months of 1985, average wage adjustments in major labor settlements covering 850,000 workers were for 2.8 percent raises in the first year of new contracts, and 2.9 percent annually over the term of agreements. Settlements since June have followed that trend.
The Labor Departments' Bureau of Labor Statistics reported that settlements last year averaged 3.1 percent for the first year and 2.8 percent annually in longer contracts.
Typical of major contracts negotiated in 1985, General Electric and Westinghouse and their unions agreed to a 3 percent increase over projected first-year wages and an additional 3 percent for the following two years. General Electric spokesmen described the contract as ``outstanding'' and William Bywater, president of the International Union of Electrical Workers, called the agreements ``the kind of contract we can be proud of.''
On Oct. 3, railroads and their unions, traditionally militant in bargaining, signed agreements which railroad spokesman Charles Hopkins termed ``responsible.'' First announcement of the settlement, which is expected to set a pattern for agreements covering 350,000 workers in 13 unions, indicates wage increases of about 10.5 percent over 40 months.
Meanwhile, the International Brotherhood of Teamsters signed three-year contracts covering 200,000 workers, accepting wage cuts from $13.21 an hour to $11 an hour.
United Auto Workers locals in American Motors plants also accepted pay reductions to avoid plant closing. Just last week, United Steel Workers negotiators accepted pay cuts of up to 16 percent to end a long and bitter strike against Wheeling-Pittsburgh Steel Corporation.
Precedents count for a lot in collective bargaining. Electrical manufacturing, trucking, construction, auto, and steel settlements this year will be important in heavier bargaining in 1986.
The principle reasons for the continuing moderation of union demands during contract negotiations are:
Unions are increasingly worried over imports and the impact they have on US employers and on jobs. Foreign trade and protectionism are, perhaps, the biggest issues for labor today.
Unions are also concerned about unemployment, although government figures show that the rate of joblessness has stabilized at about 7 percent. Some economists predict the national jobless rate will drop as low as 6.5 percent next year, but labor leaders believe future job losses among blue-collar workers in basic industries are possible.
These bargaining factors are likely to keep the brakes on settlements in 1986. If this happens, it should help hold down inflation -- but it could further depress consumer spending and saving, and it may retard further growth in the national economy.