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May, 1988, Vol. 111, No. 5
Wage adjustments in contracts negotiated in private industry in 1987John J. Lacombe II and Fehmida R. Sleemi
Average wage adjustments under major collective bargaining settlements in private industry were somewhat higher in 1987 than the historic lows of 1986. Specified adjustments (the net effect of decisions to increase, decrease, or not change wages) for the 2,049,000 workers under 1987 settlements averaged 2.2 percent the first contract year and 2.1 percent a year over the contract term. (See table 1.) These adjustments were next to the lowest ever registered by the Bureau of Labor Statistics' 20-year-old series on major contract settlements covering 1,000 workers or more in private industry.1 This was the sixth consecutive year in which settlements provided record or near-record low adjustments. (See table 2.)
The 2.1-percent average annual wage adjustment specified over the term of 1987 settlements was the same as in the contracts they replaced, which typically had been negotiated in 1984 or 1985. This is the first year since this comparison was introduced in 1981 that settlements did not call for lower adjustments than the contracts they replaced. (See table 2.)
The Bureau also measures compensation (wage and benefit costs) adjustments in settlements covering 5,000 workers or more. In 1987, compensation adjustments average 3.0 percent in the first contract year and 2.6 percent annually over the contract term. (See table 3.) these adjustments also were higher than the record low averages in 1986.
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1 The major collective bargaining agreement series for private industry covers 6.3 million workers in bargaining units with at least 1,000 workers. For definition of terms, see "Current Labor Statistics" section of the Monthly Labor Review. Additional tabulations from this series are in the March 1988 issue of the Bureau of Labor Statistics periodical Current Wage Developments, which also contains data from a similar series for state and local government.
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