The government reported yesterday that first-year wage increases in major labor contracts negotiated this year have averaged 2.5 percent, one of the lowest rates on record and well under the rate of inflation.
The preelection figures confirm the trend of the last two years, in which unions, particularly in such industries as autos, steel and construction, hard hit by recession and competition, have lacked leverage at the bargaining table and often have given back past gains.
By the broadest measure the government publishes -- per capita income after taxes and inflation -- Americans continue to be better off. This basic per capita figure was $4,487 in 1977 dollars in 1980, the last year of the Carter administration. By last year it had risen to $4,670, and this year has jumped higher.
But that counts all income, interest and benefit checks as well as wages. Per capita income also has been lifted over the years by an increase in the number of two-earner households.
By contrast, wage rates have been flat in recent years when adjusted for inflation. The Labor Department's inflation-adjusted hourly earnings index -- perhaps the best measure of the buying power of an average hour's work -- was 94.3 in September, the last month for which figures are available. It was 93.5 in 1980, President Jimmy Carter's last year in office, and 100.0 in 1977, his first.
Labor, therefore, has lost some ground. The other side of the economic coin is that labor costs are a major element in production costs, and, therefore, in the inflation rate.
The new numbers also reflect another shift. Business and labor economists say that wage gains for larger unions, traditionally the pacesetters for the economy, are lagging behind those for smaller unions and nonunion employes.
The Bureau of Labor Statistics report for the first nine months of 1984 shows that yearly wage increases averaged 2.5 percent in the first year and 2.8 percent over the life of contracts negotiated by unions representing 1,000 or more private-sector workers. Inflation has risen by 4.2 percent in the last 12 months.
The BLS examination of 1,700 collective bargaining agreements shows the current raises are less than one-third the average 8.6 percent raises negotiated by the same unions and companies during their last contracts, generally two to three years ago when inflation was considerably higher.
A broader indicator of wages, the employment cost index, which includes overtime, cost-of-living adjustments, and other compensation, shows that wages paid to all union members by private sector employers increased by 4.2 percent, while the nonunion increase, which includes supervisory employes, averaged 5 percent for the 12 months ended in June.
"Profits have recovered very well since the recession, but wages have not kept pace," said Sar Levitan, professor of economics and director of George Washington University's Center for Social Policy Studies, "Unions have usually been the catalyst for raising wages throughout the economy, but unions now are not in a position to push."
Major union settlements consistently exceeded the inflation rate or were very close to it until 1982 when a downward trend took hold, partly because of the rise of "concessionary" bargaining, according to Alvin Bauman, chief of the BLS's labor-management division. Of the workers covered in 1984 settlements, 27 percent received no first-year pay raises, including 6 percent who took pay cuts. Those figures are roughly identical to 1983.
Despite the trend, the wages and benefits of the approximately 20 percent of the unionized work force remain substantially higher than nonunion workers, according to an AFL-CIO analysis of BLS data, which shows that union wages averaged $2 per hour higher, and $4.45 per hour higher when fringe benefits are included.
Average gross earnings reached an all-time high of $8.40 per hour and $296.52 per week in September for production and nonsupervisory workers. But when adjusted for inflation, hourly "real earnings" declined slightly in the last 12 months. With the economic recovery, however, the average number of hours worked increased in the past year, yielding a 0.6 percent increase in overall real weekly earnings, according to BLS.
The latest real earnings are 94.3 percent of 1977, BLS' base year. This means that when inflation is taken into account, wage earners have taken a 5.7 percent pay cut in the last seven years. The August and September hourly real earnings figures also were the lowest since the 1981-82 recession.
A variety of factors affects the overall downturn in union wage settlements. Lower-wage foreign competition has dramatically undercut salary demands in basic unionized industries such as steel, autos, machine tools and others. Deregulation has increased competition in the airline, telecommunications and trucking industries, opening the way for nonunion firms and pushing union wages downward. Inflation also is substantially lower now than the last time major contracts were negotiated, resulting in more moderate wage demands.
The political climate also has dampened union wage demands, according to labor officials, who contended that President Reagan's 1981 dismissal of 11,000 striking air traffic controllers and his appointment of conservatives to the National Labor Relations Board have resulted in an antiunion tone at the bargaining table.
Another factor is the "deindustrialization" of the economy, the permanent loss of nearly 2 million manufacturing jobs in heavily unionized sectors during the last recession, and the growth of lower-wage "service" jobs in health care, food services and clerical work.
"Wage increases are decidedly more moderate now because of some very fundamental changes in the labor market," said Jerry J. Jasinowski, chief economist for the National Association of Manufacturers. He said that with the value of the dollar up by more than 50 percent in the last three years and U.S. labor costs the highest in the world, U.S. exports are suffering.
"It is primarily because workers are looking at this increased competition that the concern has risen about job security," Jasinowski said.
Job security has in many cases replaced wage demands as a major concern of some unions.