US pay increases may hit 9 or 10%
Hourly compensation costs for nonfarm employees are expected to increase 9 or 10 percent in 1980, in what is expected to be a "heavy" bargaining year for labor unions, predicts Dr. Daniel Mitchell, director of the UCLA Institute of Industrial Relations and professor at the UCLA Graduate School of Management.
"Normally, inflation plays a major role in wage determination," Dr. Mitchell said. In 1979, the consumer price index will have risen about 11.5 percent, roughly a four- percentage-point increase over 1978. If even half this increase enters 1980 wage determinations, a substantial wage acceleration will occur, he said.
Of the 9.6 million workers under major contracts, about 40 percent will be negotiating in 1980. Many of the others will be scheduled for deferred increases.
While approximately 58 percent of workers in major unions were covered by escalator clauses in 1979 and will have their wages dictated by their previous agreements, those negotiating new contracts in 1980 will not be bound by previous commitments.
In 1980, major negotiations will include the petroleum and aerospace industries, steelworkers and nonferrous metals employees, telephone employees, and longshoremen.