Study of New Union Contracts : Workers Get Smallest Pay Increases in Recent Years

Major union contracts in the first six months of 1986 are providing the lowest first-year pay boosts in recent history and are less than half the increases won by union workers in their last collective bargaining settlements, the government reported Monday.

And manufacturing workers--led by union pay and benefit cuts of $1.50 to $3.15 an hour in the crippled steel industry--saw their average 1986 wage levels actually decline under the new contracts, the Labor Department’s Bureau of Labor Statistics reported.

First-year wage increases in 261 major contracts negotiated so far this year in private industry--covering at least 1,000 workers each and nearly 1 million altogether--are averaging only 1.2%, the agency said.

That is less than half the average first-year raise of 2.5% won in the expiring contracts negotiated two to three years earlier and only slightly more than half the average first-year pay boosts averaging 2.3% in contracts negotiated in 1985.

Over the two- to three-year lives of the new contracts, the average annual increase rises to 1.9%, compared to average annual boosts of 2.7% in settlements negotiated last year and 3.1% in the expiring contracts signed two or three years ago, the Bureau of Labor Statistics said.

One-third of the 261 major contracts negotiated and more than half of those covering manufacturing workers included first-year wage freezes. Only 3% of the contracts included first-year pay cuts, but they were huge ones--averaging 7.7% to 7.8%.