Nearly two million union workers covered by major collective bargaining contracts reached in the first half of this year accepted pay raises averaging 3 percent, a dramatic decline from previous contract gains, the Bureau of Labor Statistics reported yesterday.
Nearly three-fifths of the 1.9 million workers will receive no specified wage increase, and the wages of a few will decrease, reflecting the impact of the recession and widespread layoffs in the auto, trucking and other depressed industries.
The workers' average increase was 3 percent for the contract's first year and 2.7 percent over its life, compared with 7.7 and 6 percent respectively under the last contracts signed by the same parties two to three years ago.
Nearly all workers who are not receiving scheduled pay increases are likely to receive increased compensation through cost-of-living (COLA) clauses. But these too will be lower than in prior contracts because of the decline in inflation, which determines the amount of the cost-of-living adjustments.
The BLS does not include COLAs in the wage calculations because they result from unpredictable changes in the consumer price index.
If workers who received no increases are left out of the calculation, the remaining workers received pay gains averaging 7 percent for the first year and 6.2 percent for the life of the contract.
The largest groups among those receiving specified increases are the construction and apparel workers.
The construction industry settlements were the smallest in four years, the report noted. Their first-year wage adjustments averaged 6.6 percent, compared with 11.1 percent when the same parties bargained previously and 13.5 percent for other construction groups who settled last year.
The figures might have been even lower, except that most union construction work is on commercial office buildings or roads, which have not suffered the severe hardships of the housing construction industry, a BLS analyst said.
The Labor Department figures are "worker weighted," so that the larger the number of workers covered by a contract, the more that contract counts in the calculations. Only those covering at least 1,000 were included.
Earlier in the year, almost all of the workers who negotiated no increases were in autos and trucking, but in the last three months that trend has spread to include workers in rubber, farm implements, steel production, food processing and some construction, the analyst said.
The BLS report showed a marked contrast between contracts that included cost of living adjustment clauses (COLA) and those that didn't.
In COLA contracts, the specified first-year wage adjustments (separate from the COLA increase) averaged only 1.4 percent, compared with 7.2 percent wage increases in non-COLA contracts. Three-fourths of the workers covered by COLA contracts will receive no specified wage increase other than COLA.
The above statistics do not include changes in fringe benefits, which showed an average first year increase of 2 percent.
Some 8.7 million private sector workers are covered by major collective bargaining contracts, or about one out of every eight private sector wage and salary workers.
Private industry agreements negotiated last year by a different set of industry groups averaged first year wage increases of 9.8 percent.