REALITY CHECK: US WORKERS GET BIG PAY HIKE; UNION RESOLVE GAINS
09:10 EDT 09/10 --Boeing Union Got 4% Hike Plus 10% Lump Sum In Just-Ratified Pact --Pacific Longshoremen Get Up To 71% Pension Increases for Retirees --Northwest Flight Attendants Rejected Pact Giving Them Up To 25% Hike --Steelworkers Get Around 2% Wage Increases But Big Lift In Pensions
By Gary Rosenberger
NEW YORK (MktNews) - U.S. labor unions appear to be reversing a decade of givebacks and eroding resolve as they are negotiate substantial wage and benefit packages, say labor and management sources.
Recently ratified collective bargaining agreements indicate strong wage gains, skyrocketing pension increases and no perceived givebacks on health care.
In at least one case, union members rejected a contract that had been recommended by their leadership and that would have given some in their rank 36% in wage hikes over the next five years.
Among the recently concluded labor contracts:
Boeing machinists got a 11% in wage increases over the three-year life of their contract (4% the first year, 4% the second year, 3% the third year, plus a lump-sum 10% ratification bonus that effectively hikes wages by 21% over the next three years. Workers also got a 25% increase in pension benefits and a guarantee of no layoffs due to subcontracting.
Pacific longshoremen accepted a contract that raises pensions for already retired workers by around 48% to 71%, with wage increases at a more modest 7.8% over the next three years.
Steelworkers are getting only about 2% annual increases over the five years of their recently concluded contract with four of the five major integrated steelmakers but got huge pension increases.
They fared better with Newport News Shipbuilding in July, following a four-month strike. But while the percentage increases were greater, their base wages and pensions were lower, say union officials.
Management justifies most of those increases as a reward for productivity increases and as an investment in labor peace.
Unions say a robust economy and tight labor markets have emboldened workers -- and sometimes their resolve is so intense, it catches union leadership by surprise.
That was the case with the Teamsters who were negotiating a contract for Northwest flight attendants, themselves without a contract for three years.
On the face of it, it appeared generous -- calling for an immediate wage hike of as much as 25% and an additional 11% to be spread out over five years. But it was rejected by the rank and file last week.
The Boeing-machinists pact, which covers 46,000 workers in three states, is considered among the heftier of recently ratified contracts. The union, in its website, termed it "high-flying" while management called the benefits package "the best and most comprehensive in the industry."
Machinists are to get 4% increases this year and next year and a 3% increase in three years, plus a 10% bonus upon ratification.
Boeing said the 21% in wage increases and ratification bonus will be offset by productivity gains and intangible but important benefits of labor peace.
"The union has proven that they're not afraid to walk out," said Peter Conte, a Boeing spokesman.
Conte noted that the company withdrew proposals for monthly medical contributions and to create more flexible work and production schedules, while paring down overtime -- neither of which the union would countenance.
Nevertheless, Conte argues that the overall contract is good for the company.
"The contract allows Boeing to move forward with its production recovery effort that are integral to its future financial performance and growth," he said.
"We believe those costs can be made up for with gains in productivity -- although the increases aren't really tied to productivity," he said.
Conte noted that the productivity gains have already been made with Boeing workers set to deliver a record 563 commercial aircraft this year and 620 in the works for next year.
U.S. steelworkers made due with more modest wage increases, but fared better with pensions and other benefits, said John Thomas, a spokesman for the United Steelworkers of America (USWA).
U.S. steelworkers recently concluded a contract that calls for a 50 cent and hour wage increase in 2000, an additional 50 cents an hour in 2001 and a dollar an hour increase in 2003 -- totaling $2.00 per hour in wage increase over the contract's five years, he said.
"If you consider the average base salary to be about $19 to $20 an hour, it comes to about 10% over the next five years -- and in this day and age that's not bad," Thomas said.
The contract has been ratified by four of the five integrated steelmakers in the United States and fifth is expected to ratify it soon, Thomas said.
"But the real priority and what took so long in getting the pattern estalished for U.S. Steel and Bethlehem was getting pensions," he said. Under terms of the old contract, retirees got $35 a month for each year worked, up to $1050 for 30 years of service.
That was raised to $52.50 a month per year worked (totaling up to $1,575 a month) and $56.25 a month per year worked (totaling up to $1,687.50 a month) in 2002.
That amounts to a 50% gain in pensions next year and 61% in two years over the old contract, according to Thomas. He added that for more than 30 years service, the contract spikes up to $70 per month for those additional years in 2000 and $75 per month in 2002.
Thomas said the biggest victory for USWA members this year belonged to workers at Newport News Shipbuilding, who struck for about four months in an effort "to break the plantation mentality in which you pay Southern workers less than you do Northern workers."
"Their pensions virtually doubled," he said, noting that average pensions are slated to increase from about $400 to $500 a month to between $750 and $900.
Wage gains were also substantial by local or any other measure, he said.
"The increases were between $3.00 and $3.50 an hour over the 58-month term of the contract, with the current base at around $11 to $13 an hour," he said, or on average of about 5% a year.
Autoworkers, who are still in the process of negotiating their contracts with the Big Three, declined to talk about the progress of their negotiations.
However, they were willing to make general observations about wage and benefits trends and about union priorities.
"Wages are clearly a priority, especially now that the economy is so strong," said Reg McGee, a spokesman for the United Auto Workers (UAW).
"Job security remains a priority, but we're also looking to make the workplace more family friendly, with better child care and parental leaves," he said.
On the benefits front, the union is looking to bolster pension plans and opposes "the shift to 401K plans."
On the question of wages, McGee said he doubted there would be any "surprises" arising out of the current talks -- but noted that recent agreements he has seen have tended to be "in the 3% to 5% range."
On pension matters, among the biggest gainers were retired members of the International Longshore and Warehouse Union (ILWU) who worked the Pacific Coast, according to a union official who asked that his name not be used.
"Our top priority was getting old folks those increases and they were significant -- they got between 48% and 71% increases," he said.
"Our second priority was medical benefits," he said, noting that management pays "100% of medical benefits on our PPO with no copay." (PPO stands for preferred provider organization, a more flexible version of an HMO.)
On wages, the recently ratified agreement calls for a $1.00 an hour increase in the first year, and 50 cent increases in each of the next two years, he said. That will lift average hourly wages to $27.63 from the current $25.63, about a 7.8% increase over three years.
Editor's Note: Reality Check stories survey sentiment among business people and their trade associations. They are intended to complement and anticipate economic data and to provide a sounding into specific sectors of the U.S. economy. |
