Charley: Here's a story I yanked off the N.Y. Times wire today. I am not posting it to firm up a point I made. The story simply takes a look at the state of contracts/bargaining in America a week after Labor Day. Also, link me to your Trumka post, if you please. I must have missed it when you posted it. Thanks, Flap.
With Some Victories in Hand, Battered Labor Flexes Muscle
September 9, 2000
By STEVEN GREENHOUSE
NEW YORK TIMES
It has been a big month for big labor, judging from the bargaining
results at some of the nation's best-known companies.
Bridgestone/Firestone, the embattled tire maker, averted a strike
earlier this week by granting its 8,000 workers raises that will
run from 15 percent to 30 percent over three years ˜ raises that
are far above the inflation rate.
At United Airlines, the 10,500 pilots have won an immediate raise
of 21.5 percent or more to make up for lagging wages, and that does
not include annual wage raises, totaling 16 percent over four
years.
And when 86,000 telephone workers ended their recent two-week
strike at Verizon, the new name of Bell Atlantic, they boasted that
their contract calls for a 4 percent raise each year for three
years, along with stock options and profit sharing expected to be
worth at least 1.5 percent more a year.
Those workers also made major strides on noneconomic issues ˜
their contract addresses some of the job stress gnawing at workers
in the new economy by, for example, restricting mandatory overtime.
"These are definitely lucrative contracts," said Richard Hurd, a
Cornell University professor of labor and industrial relations.
"They are the result of the good economy and of unions becoming
more sophisticated in their negotiations over the past 20 years."
While it remains unclear whether these settlements will set a
pattern for other contracts, what is clear is that labor unions are
doing much better at the bargaining table than just a few years
ago, when much of corporate America was demanding ˜ and winning ˜
major concessions on wages and benefits. And these newly bargained
contracts, along with others negotiated over the last year at auto,
steel and aircraft companies, show that in many unionized
industries wages are beginning to soar after years of relative
stability.
To be sure, in many contracts in which unions obtain major wage
increases, they compensate by agreeing to concessions on fringe
benefits. But in the latest contracts, there were large increases,
not decreases, in benefits as well. In the Firestone contract
negotiated by the United Steelworkers of America, pensions are to
increase 22 percent to 50 percent.
Union leaders assert that these contracts will serve as a pattern
for other unionized workers, a notion that worries many economists
and corporate executives, who fear that soaring wages will spur
inflation and cut profits.
"We're going to be seeing other impressive union contracts," said
Richard Bank, director of the A.F.L.- C.I.O.'s center for
collective bargaining. "Union settlements are running higher than
they were several years ago."
But some academics and business leaders said the impressive gains
at Firestone, United and Verizon would not be widely imitated
because they resulted from one-of-a-kind situations that forced
management to be more generous than it otherwise would have been.
United was in a poor position to withstand a strike because many
customers were already seething over its many flight cancellations
and delays in recent months. For Firestone, it was hard to imagine
a worse time to weather a strike because the company faces a
serious crisis over defective tires and needs to replace millions
of recalled tires as soon as possible.
Several labor experts said that because unions now represent less
than 10 percent of all workers in the private sector, it will be
hard for workers throughout the economy to clinch the large gains
made at Firestone, Verizon and United.
"In the broader work force, the level of insecurity and
uncertainty that was happening in the economy remains substantially
high, so you will not see an explosion of wage increases as a
result of these contracts," said Paul Osterman, a professor of
management at the Massachusetts Institute of Technology.
But these contracts are already having undeniable effects. Pilots
at American Airlines are suddenly looking less kindly at their own
tentative agreement and several of them say they are more likely to
vote it down now that they have seen how much better United's
pilots did than they. And Delta Air Lines pilots, emboldened by the
United contract, plan to begin demonstrating this week because they
are unhappy about long-stalled efforts to negotiate a new contract.
Union leaders representing 18,000 workers at Goodyear and 4,000
at Uniroyal said they hoped the Bridgestone/Firestone agreement
would serve as a pattern ˜ and inspiration ˜ for them.
The impressive Verizon, Firestone and United contracts have one
thing in common: they were negotiated in heavily unionized
industries. In other words, these contracts show that even though
the percentage of unionized workers in the labor force has declined
steadily for four decades, labor still has a lot of influence in
industries where most workers are unionized.
It is not at all clear, labor experts say, that the strong wage
gains in steel, autos, rubber and airlines will be imitated by
unionized employees in the public sector or by unionized employees
in industries like health care, where only a small percentage of
the workers are organized.
Nowadays, unions feel emboldened because the unemployment rate is
near its lowest point in four decades and the economic expansion
keeps breaking records for longevity.
"Traditionally, when unemployment is low, unions do well because
employers realize that the threat of a strike is more serious,"
Professor Hurd said. "In that situation it's much harder for
companies to keep operating by hiring temporary or permanent
replacement workers. And in boom times, demand is greater so
companies have more business to lose."
All this is a far cry from the 1980's when workers in heavily
unionized industries like steel, rubber and automobiles took it on
the chin ˜ and made concessions ˜ because of recession and a deluge
of imports. And in the 1980's many unions were cowed into
submission after Phelps- Dodge miners and federal air traffic
controllers lost their jobs when their employers replaced them with
permanent replacement workers.
But unions have developed more sophisticated tactics. Even though
Bridgestone/Firestone used 2,300 replacement workers during a 10-
month strike that began in 1994, the steelworkers' union was able
to pressure the company into signing a contract because union
members picketed tire dealers and speedways across the country to
urge drivers to boycott Firestone tires.
Bernard Kleiman, one of the steelworkers' chief negotiators, said
another reason that wages had risen strongly in the recent
contracts is a social compact between unions and major industries.
He said unions had agreed to cooperate with companies to help them
cut costs and restructure to make them more competitive.
"In industries like steel and rubber," Mr. Kleiman said, "we're
globally more efficient than the rest of the world, and in return
we demand job security and good wages, and that's the responsible
way to go."
Largely because of the low unemployment rate and booming economy,
unionized workers and nonunion workers alike have received greater
pay increases over the last year or two. Employers have felt
pressure to pay more to keep their employees from jumping to
competing employers.
In the first 36 weeks of this year, according to the Bureau of
National Affairs, a research group, union contracts called for 3.7
percent wage increases in the first year, up from 3.4 percent in
the 1999 period.
But some economists say there may be little need to worry that the
higher wages will translate into inflation.
"We're having greater productivity growth, so I wouldn't worry so
long as these wage increases come in areas where there is nice
productivity growth," said Richard Freeman, a Harvard University
labor economist. |
