Union Wage Increases Fall Short of 2016’s Modest Increases

Report: Union wage increases are lower than last year.

Unions often attempt to lure non-unionized workers into unions by promising higher wages or benefits if workers opt to unionize.

While it sounds enticing, the fact of the matter is, unions are not faring any better than non-union workers when it comes to wage increases negotiated into collective bargaining agreements.

According to surveys taken last year, salaries of non-unionized workers were expected to rise by three percent in 2017, reported the Society for Human Resources Management (SHRM).

While three percent may seem like a modest increase to some, it is more than the average first-year wage increase in union contracts.

Those union increases—at 2.6 percent—fell short of projected non-union increases by .04 percent, according to information compiled by Bloomberg’s BNA (and reported here).

An analysis of data compiled by Bloomberg BNA through March 20, 2017 showed that the average first-year wage increase for all settlements was 2.6 percent, down from the 2.7 percent average increase that was reported for the same year-to-date period in 2016. The median first-year wage increase for settlements reported to date in 2017 was 2.4 percent, and the weighted average was 2.5 percent, both the same as last year.

Data from a Bloomberg BNA survey conducted in October and November 2016 among 142 eligible employers that have collective bargaining agreements expiring in 2017 shows that employers are confident they will achieve their bargaining goals. According to the report, most employers will seek to negotiate three-year contracts, and the bargaining climate this year remains “tough” for labor unions overall. The study shows that this year’s bargaining plans suggest a greater willingness among employers to boost pay, but wage increases will likely be relatively modest. Additionally, health care and insurance benefits will remain a leading target for concessions by employers. [Emphasis added.]

Of course, none of these figures reflect the percentage of union dues taken from the wage increases.

Union dues often range from a low of 1.25 percent of pay to a much higher percentage.