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Major labor contracts in 1986
provided record low wage adjustments
In 1986, major collective bargaining settlements in private industry provided record low wage and compensation adjustments, reflecting both employers' and unions' efforts to curb labor costs. Their task was made easier by continued moderate upward pressures on wages from comparatively small increases in consumer prices. According to the Bureau of Labor Statistics' 19-year-old series on private industry agreements covering 1,000 workers or more,1 wage adjustments—the net effect of decisions to increase, decrease, or not change wages—under settlements reached during 1986 averaged 1.2 percent in the first contract year and 1.8 percent annually over the contract term. (See table 1.) The settlements covered 2.5 million workers.
This was the fifth consecutive year in which settlements produced average wage adjustments that were substantially below those registered prior to 1982. (See table 1.) Wage adjustments which were actually put into effect during 1986, stemming from settlements negotiated that year and those reached in prior years, also averaged a record low—2.3 percent.
The last time parties to 1986 settlements negotiated (usually in 1983 or 1984), they agreed to contracts that specified average wage adjustments of 3.5 percent the first year and 3.2 percent annually over the term. Total wage adjustments—those specified at the time of settlements plus any subsequent cost-of-living adjustments (COLA's)—averaged 4.0 percent a year over the contract term. This was the smallest on record, and occurred while the Consumer Price Index for Urban Wage Earners (CPI-W) was rising 3.5 percent a year (between December 1982 and December 1985).
This excerpt is from an article published in the May 1987 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 The major collective bargaining agreement series for private industry covers 6.5 million workers in bargaining units with at least 1,000 workers. For definition of terms, see Current Labor Statistics, "Wage and Compensation Data," pp. 53-55. Additional tabulations from this series appear in the March 1987 issue of the Bureau's Current Wage Developments.
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