Trends In Bargaining Perspectives. In the past, most union-management bargaining situations were characterized by union demands for dramatic increases in wages and salaries. A secondary Issue was usually increased benefits for members. Now, however, unions often bargain for different benefits, such as job security. Of particular interest in this area is the trend toward relocating jobs to take advantage of lower labor costs in other countries. Unions, of course, want to restrict job movement, whereas companies want to save money by moving facilities—and jobs—to other countries.
As a result of organizational downsizing and several years of relatively low inflation in this country, many unions today find themselves fighting against wage cuts rather than striving for wage increases. Similarly, as organizations are more likely to seek lower health care and other benefits, a common goal of union strategy is to preserve what's already been won. Unions also place greater emphasis on improved job security. A trend that has become especially important in recent years is the effort to improve pension programs for employees.
The Future of Unions. Despite declining membership and some loss of power, labor unions remain a major factor in the U.S. business world. The 86 labor organizations in the AFL-CIO, as well as independent major unions such as the Teamsters and the National Education Association (NEA), still play a major role in U.S. business. Moreover, some unions still wield considerable power, especially in the traditional strongholds of goods-producing industries. Labor and management in some industries, notably airlines and steel, are beginning to favor contracts that establish formal mechanisms for greater worker input into management decisions. Inland Steel (www.inland.com), for instance, recently granted its major union the right to name a member to the board of directors. Union officers can also attend executive meetings.
Collective bargaining is an ongoing process involving both the drafting and the administering of the terms of a labor contract.
The collective bargaining process begins when the union is recognized as the exclusive negotiator for its members. The bargaining cycle describes the process of negotiations between management and unions. It includes such steps as:
1.meeting management representatives to make agreement on the contract between management and unions;
2.both sides present their demands;
3.identifying bargaining zone;
5.ratification of new agreement.
The labor contract itself can address an array of different issues. Most of these concern demands that unions make on behalf of their members. The categories of issues that are typically most important to union negotiators: compensation, benefits, and job security. Although few issues covered in a labor contract are company sponsored, we also describe the kinds of management rights that are negotiated in most bargaining agreements.
Compensation The most common issue is compensation. One aspect of compensation is current wages. Obviously, unions want their employees to earn higher wages and thus try to convince management to raise hourly wages for all or some employees. Of equal concern to unions is future compensation: wage rates to be paid during subsequent years of the contract. One common tool for securing wage increases is a cost-of-living adjustment (COLA). Most COLA clauses tie future raises to the Consumer Price Index (CPI), a government statistic that reflects changes in consumer purchasing power. The premise is that as the CPI increases by a specified amount during a given period of time, wages will automatically be increased. Almost half of all labor contracts today include COLA clauses.
Wage reopener clauses are now included in almost 10 percent of all labor contracts. Such a clause allows wage rates to be renegotiated at preset times during the life of the contract. For example, a union might be uncomfortable with a long-term contract based solely on COLA wage increases. A long-term agreement might be more acceptable, however, if management agrees to renegotiate wages every two years.
Benefits Employee benefits are also an important component in most labor contracts. Unions typically want employers to pay all or most of the costs of insurance for employees. Other benefits commonly addressed during negotiations include retirement benefits, paid holidays, and working conditions.
Job Security Nevertheless, the UAVV's top priority in its most recent negotiations with U.S. automakers has been job security, an increasingly important agenda item in many bargaining sessions today. In some cases, demands for job security entail the promise that a company not move to another location. In others, the contract may dictate that if the workforce is reduced, seniority will be used to determine which employees keep their jobs.
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