Bargaining Activity Light in Private Industry in 1985

By Borum, Joan D.; Schlein, David | Monthly Labor Review, January 1985 | Go to article overview

Bargaining Activity Light in Private Industry in 1985


Borum, Joan D., Schlein, David, Monthly Labor Review


Bargaining activity light in private industry in 1985

About 3.5 million of the 9.4 million employees under major collective bargaining agreements (covering 1,000 or more workers) in private industry and State and local government have their contracts slated for renewal or reopening in 1985. Bargaining activity in private industry will be relatively light, with negotiations covering 33 percent of the 7.4 million employees under major agreements. In State and local government, 55 percent of the 2.0 million employees under major agreements are subject to negotiations during 1985, the first year for which data are available for these contracts. 1

The light 1985 bargaining calendar in private industry follows 3 years of heavy bargaining. From the mid-1950's to 1983, bargaining over major contracts in private industry was on a cycle of 2 years of heavy activity, each involving about two-fifths of the workers, followed by a third year of lighter activity, involving about three-tenths of the workers. This 3-year cycle was broken when contracts between the United Automobile Workers and Ford Motor Co. and General Motors were negotiated in early 1982 to run for 2 1/2 years. They replaced contracts that were to expire in September 1982 that, had they then been renegotiated for the typical 3-year duration, would have expired in 1985. Thus, bargaining in autos was thrown into 1984, making it the third heavy bargaining year in a row, and making 1985 a light bargaining year.

During 1985, 537 major contracts in private industry, covering 2.4 million workers, and 288 major State and local government agreements, covering 1.1 million workers are scheduled to be negotiated. (See tables 1 and 2.) These negotiations will be influenced by both general economic conditions and the circumstances of the individual industries, employers, and unions involved in bargaining.

The recovery in the Nation's economy that began in 1982 continued into the third quarter of 1984. Key measures of the economic health of the country showed improvement over the previous year. For example, the unemployment rate of civilian workers was 7.4 percent in September 1984, compared to 9.2 percent a year earlier. The Consumer Price Index for All Urban Consumers (CPI-U) rose 4.2 percent during the 12-months ended September 1984, continuing the moderate rate of price increases that began in 1982. The Federal Reserve Board's total industry capacity utilization rate was 81.9 percent for September 1984, up from 78.6 percent a year earlier. The composite index of leading economic indicators, compiled by the U.S. Department of Commerce's Bureau of Economic Analysis to forecast movements in aggregate economic activity, suggests continuing, but slower, growth into 1985.

Despite the 1984 economic growth, major contract settlements reached in private industry during the first 9 months were historically low. They provided average specified wage adjustments of 2.5 percent in the first contract year and 2.8 percent annually over the life of the contract. This compares with annual figures of 2.6 and 2.8 percent, respectively, for all of 1983. In contrast, when the same parties to 1984 settlements previously bargained (about 2 or 3 years before), their contracts provided wage adjustments of 8.6 percent in the first-year, and 7.2 percent annually over the contract life.

The size of settlements in 1984 reflects attempts by the parties to adjust to the economic difficulties faced by many of them, including competition from abroad and from nonunion firms at home and declining employment opportunities. Many of the parties to 1985 negotiations face similar problems. How they deal with them at the bargaining table remains to be seen.

The bulk of contract expirations in the private sector will occur between March and September 1985. Negotiations are scheduled in several key industries including trucking, construction, men's apparel, rubber, women's apparel, electrical products, and for autoworkers at Chrysler Corp. …

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