Forecasts of slower economic growth in 1985 and increasingly intense foreign competition are keeping a brake on labor costs. Already, a new contract in the rubber industry and talks under way between General Electric and its major electrical manufacturing unions suggest that the trend will continue into the second quarter.
According to the US Labor Department, annual pay increases negotiated during the first quarter of 1985 averaged 2.8 percent for the first year and 3 percent annually during the life of new agreements.
In the first quarter of 1984, wage increases averaged slightly lower, 2.4 percent in the first year and 2.3 percent annually over two- or three-year contract terms.
The first quarter '85 figures include settlements in the railroad, trucking, construction, and airline industries. While these pacts involved only about 47 major contracts covering 173,000 workers, they may be an indication of what lies ahead for other unions negotiating new contracts this year.
After hard bargaining, major companies and the United Rubber Workers (URW) settled within the last three weeks on moderate terms, including a 43 cent-an-hour raise over three years and quarterly cost-of-living adjustments (COLAs).
URW president Milan Stone estimated that the raises and initial COLA gains would yield $2.42 an hour through the first quarter of 1988 if inflation averages 5 percent a year.
The URW first chose Goodyear Tire and Rubber Company as a target for a pattern settlement. Goodyear has 16,000 workers under URW contracts. Negotiations bogged down, and the union switched to B. F. Goodrich, which has 7,200 workers under contract. Goodyear and Firestone Tire and Rubber Company, the latter with 8,500 under contracts, quickly signed similar pacts.
Rubber company managements cited foreign competition as the reason for their stubborn resistance to larger union demands. This is expected to be the basis for hard bargaining in other industries this year.
The competition issue also looms important in electrical manufacturing.
General Electric and its major electrical manufacturing unions opened contract talks May 14.
In an opening statement in New York, William G. Angell, GE's top negotiator said the unions' concerns would be given ``our full consideration'' but that ``any changes in pay and benefits must be considered in parallel with the ability of the businesses to be competitive in the years ahead.''
He predicted ``give and take bargaining'' will lead to a satisfactory settlement before contracts expire June 30.
United Electrical Workers (UEW) president James M. Kane called for wage increases, more cost-of-living protection, improved job security, and other gains.
The UEW is an independent union that represents 8,600 workers.
A coalition of a dozen AFL-CIO unions led by the International Union of Electronic and Electrical Workers, which itself represents 47,300 workers, is also bargaining with GE and, starting June 4, with Westinghouse Electric. The coalition's opening statement in GE bargaining also demanded a share of GE's prosperity and stressed that job security and improved pensions will be key concerns.