Why wage settlements may be smaller in 1982
Union bargaining is likely to result in smaller wage settlements in 1982 because of a weak economy, high unemployment, and determined efforts by employers and major industries to slash labor costs.Skip to next paragraph
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The annual projection by a Conference Board panel of experts is for ''very moderate'' increases averaging 8.8 percent in wages and benefits in the first year of new contracts, down sharply from the 11.5 percent rate during the first nine months of 1981.
''The economic brakes will clearly be on next year,'' said Audrey Freedman of the Conference Board, an independent nonprofit business research organization located in New York.
Noting that wage freezes and reductions are taking place and that many major employers, including General Motors and Ford, are focusing on labor costs, panel members said they look for moderated union demands and stiffer employer resistance to increases next year.
One union president comments, ''Once you get below the major unionized companies, there is real wage erosion. There is a mood among employees that they will have to see the boss through the crisis.''
About 5 million workers will be involved in major collective bargaining next year in trucking, rubber, auto, electrical manufacturing, aerospace, construction, and other industries. Auto and trucking settlements usually have set patterns that were followed in other industries. Industries in '82 are expected to bargain more than ever on a basis of their own economic conditions.
Umemployment - and the competition for existing jobs - will be an important factor in bargaining: The jobless rate is expected to peak at 9 percent next April and average 8 percent for the year as a whole. With 9 million to 10 million jobless, unions are expected to stress demands for job security and employer-paid unemployment benefits more than for large wage increases when they bargain.
The ''soft economy'' will be another important bargaining factor, although the panel expects the inflation rate to ease somewhat, to an average 9 percent in 1982. High living costs will continue to bring pressures for more pay.
The personal income tax reductions in President Reagan's antirecession program should be a factor for a moderation in union demands. One panel member, Robert Newlan of Gould Inc., said a tax cut ''will have a dampening effect on wage demands since it will boost real earnings.''