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Labor settling for less, but real test lies ahead

By Ed TownsendLabor correspondent of The Christian Science Monitor / July 16, 1981



Unions have been settling for less in 1981, a relatively light year for major collective bargaining, but the real tests for wage restraint remain a year away.

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Estimates for the first six months of 1981 indicate a significant drop from peak figures for wage hikes -- from close to 11 percent a year in late 1980 to just under 10 percent in union contract settlements and about 8.5 percent in nonunion employment now. The increases are still high but are considered a significant improvement over 1980 for the troubled economy.

If the trend continues and worker productivity figures improve further, economists see an "encouraging" easing of inflationary pressures. However, most are cautious about predicting that the trend will continue. Major labor contracts must be renegotiated next year -- including auto contracts that expire in 1982.

Jason Benderly, an economist for the Washington Analysis Corporation, recently noted that while "wage gains have been decelerating significantly this year," the moderation might prove short lived.

"If the economy strengthens significantly later this year," he warns, "you can probably say 'goodbye' to wage restraint."

Major labor contracts must be renegotiated next year and bargaining will involve some of the country's most militant unions and about 5 million workers who are alredy talking about their need for substantial wage increases.

Collective bargaining settlements in the first three months of this year produced average wage increases of 9 percent in the first year of new contracts and 7.7 percent over the whole contract term. Generally, settlements in the first two quarters were reported by unions at a higher 30 percent or more over three years. The settlements in the first half of 1981 reflected, in part, the less sharp rises in living costs.