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April, 1986, Vol. 109, No. 4
Wage restraints continue
in 1985 major contracts
For the fourth consecutive year, major collective bargaining agreements in 1985 provided record low or near-record low wage adjustments, as measured by the Bureau of Labor Statistics' 18-year-old series on private industry agreements covering 1,000 workers or more.1 Pressures to restrain labor costs dominated major negotiations during the year, and are evident in the size of settlements. First-year wage adjustments (the net effect of decisions to increase, decrease, or not change wages)2 averaged 2.3 percent, the lowest since the series began in 1968. Wage adjustments over the life of the contracts3 averaged 2.7 percent annually, next to the lowest. Wage adjustments actually put into effect during 1985 averaged 3.3 percent, also a historic low.
For almost all the settlements in 1985, the year marked at least the second or third round of bargaining since the average size of wage adjustments in settlements started to fall during 1981. (See chart 1.) The last time the parties to 1985 settlements bargained, usually in 1982 or 1983, they agreed to average specified wage adjustments of 3.9 percent in the first contract year and 3.7 percent annually over the contract life.
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1 The major collective bargaining agreement series for private industry covers 7 million workers in bargaining units with at least 1,000 workers. For definitions of terms, see Current Labor Statistics, Wage and Compensation Data, p. 65. Additional tabulations from this series appear in the April 1986 issue of the Bureau's Current Wage Developments.
2 Adjustments under settlements reached in the period and effective within 12 months of the contract effective date.
3 Adjustments under settlements reached in the period expressed as an average annual (compound) rate over life of contract.
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