Outline






A. Sectoral Organizing and
the Trigger?
1. Union Membership and
Dues
2.Structure of Organized
Labor
3.Bargaining Structures
4.The Bargaining Process
5.Bargaining Subjects

Mandatory, Permissive and
Illegal


Returns
Review questions

Do more than 10 and I’ll
count the 10 highest grades
News of the Class

Railway Labor Act
governs airline
workers
 Note
current fight over
how union votes should
be counted

Labor Mural in Maine
sparks Controversy
Are we clear on these ideas: Taking wages
out of competition and triggers



5. Lerner argues that unions need to stop organizing workplace by workplace, and
begin organizing entire industries at once in order to “takes wages out of
competition.” Try to explain how organizing an entire industry at once “takes wages
out of competition,” being sure to discuss how this changes employer behavior
toward unions.
6. In his opening paragraph, Eimer suggests that SEIU has developed a strategy
that “seeks to organize whole labor markets at once using a trigger mechanism
which is sensitive to the competitive pressures employers face when confronted with
the costs of unionization(Eimer 2008: 1). After reading the article, please explain
what that statement means. Be sure to discuss what is meant by competitive
pressures and trigger mechanisms.
7. Eimer argues that trigger mechanisms reduce employer opposition to unions.
How? What evidence does he provide to support this assertion?
The Organizing Process


Collective Bargaining cannot take place until a
bargaining representative has been certified
To gain certification, unions pursue one of two paths

Path 1: Normally, a union must win an election to be
certified as the exclusive representative of the employees

Path 2: An employer may voluntarily recognize a union if the
union can demonstrate that it represents a majority of the
employees
NLRA and the Duty to Bargain

Since the NLRA was passed in 1935, Employers are
obligated to recognize and bargain if union is certified by
NLRB

1 year duty to bargain in good faith


After 1 year, employer can withdraw recognition if proves union
does not have majority support


About 50 percent of the time, no first contract is reached…
Decertification election
This is a problem for unions…which they are trying to address
legislatively through EFCA
One Important Subject of Bargaining is
Membership

Union shop
–

within set period of time after hire, employees required to join the
union as a condition of employment
Agency shop

Requires that all employees in the bargaining unit who do not join the
union pay a representation fee in lieu of union dues to help defray the
organizations expenses

–

Logic
Workers get benefits of unionization, so must help pay for the costs that
the union occurs in bargaining and enforcing the contract
“Right to work” laws


Workers can not be required to join union as a condition of employment
21 states adopt such laws…primarily in the South

WI’s new law
Right to free ride or Right to Work



Unions are only certified when
majority indicate desire for
organization
Unions are required by law to
represent all workers so all
workers should have to support
organization
Company rule about unions is no
different than a rule about
proper attire…If worker does
not like rule they are free to
work elsewhere or to work to
decertify the union


Individual workers should not be
forced to support an
organization that they do not
want to support
Decertification is a difficult
process
The Conflict in WI
The Conflict in Indiana: How would
you vote?
Union Membership Means Union Dues

Members Pay Union Dues To Local

Average dues are 2 hours of pay per month

Local unions keep ½ $

Spent on overhead, enforce contract, bargain, organizing, strike support
etc.

Sometimes for paid staff…

NJEA Sheet
Union Membership
Union Membership Means Union Dues

Members Pay Union Dues To Local

Average dues are 2 hours of pay per month

Local unions keep ½ $


Spent on overhead, enforce contract, bargain, organizing, strike
support etc.

Sometimes for paid staff…
Where does the other ½ go?
So you’re in a unit, where do those
dues go?

Local Pays Per Capita Dues to:
 Per-capita=
x dollars or cents per member
 State
Union- bargaining help, grievance help, research,
education, training, politics
New Jersey Education Association
Cherry Hill
National Education Association
So you’re in a unit, where do those
dues go?

Local Pays Per Capita Dues to:

National Union-bargaining help, grievance help, research, education,
training, politics, lobbying, organizing
National NEA
NJEA
Cherry Hill
NEA
So you’re in a unit, where do those
dues go?

Local May Also Pays Per Capita Dues to:

State & Local AFL-CIO- education, training, publicity, politics, lobbying
National NEA
NJ AFL-CIO
NJ NEA
South Jersey AFL-CIO
(Central Labor Council)
Cherry Hill
NEA
Cherry Hill NEA
Plumbers Local 1
Teamsters Local 2
So you’re in a unit, where do those
dues go?

National Union Pays Per Capita Dues to:

AFL-CIO: research, education, training, politics, lobbying,
organizing
National AFL-CIO
National AFL-CIO
National NEA
NJ AFL-CIO
NJ NEA
South Jersey AFL-CIO
(Central Labor Council)
Cherry Hill
NEA
Cherry Hill NEA
Plumbers Local 1
Teamsters Local 2
O.K…Back to the Local Union…

Remember… NLRB decides what the bargaining unit
will be on a case by case basis

Key: mutuality of interest in wages, hours and working
conditions


Greater the mutuality = greater likelihood that members will agree
on things, and thus CB will work better
Formal bargaining structure is defined as the employees and
employers who are legally bound by the terms of the
agreement

About 180,000-194,000 agreements exist in the U.S. (Katz & Kochan, 2002)
Bargaining Units Vary in Type


Need to be attentive to scope of union or
employee interests in the unit
These interests can be narrow craft
 Cops,

Firefighters, Teachers, Electricians
Broad industrial or multi-skill
 Grocery,

Katz & Kochan, 2002
Auto, Steel
Bargaining Units Vary in Type…


Need to be attentive to scope of employer interests in
the unit
Can be multiemployer (centralized)

Bituminous Coal Operators Association


Association of many coal operators
New York Realty Advisory Board
Centralized Bargaining for: Multi
Employer and Craft Union
Industry Wide Bargaining: Regional (West Coast)
Acme Shipping
Consolidated Shipping
Thrifty Shipping
Oversea Shipping
Pacific Maritime
Association
ILWU
Local 1
Local 2
Local 3
Local 4
Centralized Bargaining: Multi Employer
& Industrial Union
Industry Wide Bargaining: National
Piedmont Coal
Pittston Coal
Rockefeller Coal
Black Coal
BCOA
UMWA
Local 1
Local 2
Local 3
Local 4
Types & Examples of Bargaining
Structure
Multi-employer
(Centralized)
Craft (narrow)
Construction
Long shoring
Industrial/Multi Coal
-Skill
Grocery
(Broad)
Bargaining Units Vary in Type…

Need to be attentive to scope of
employer interests in the unit
 Can
be multiemployer (centralized)
Bitumionous
 Single-employer,
Ford
Coal Operators Association
multi-plant
operations in America
Single Employer, Multi Plant
Ford
United Autoworkers
Local 1: Detroit
Local 2: Chester
Local 2: Milwaukee
Types & Examples of Bargaining
Structure: Scope varies…
Multi-employer SingleEmployer(Centralized)
Multi-Site
Craft (narrow)
Construction
Long shoring
Industrial/Multi Coal
-Skill
Grocery
(Broad)
Airline
Teachers
Firefighters
State Troopers
Auto
Steel
Single Employer Multi Plant & Pattern
Bargaining

Pattern Bargaining

A national union strives to establish equal wages and
benefits from several employers in the same industry.

One company serves as model, others pushed to follow pattern


UAW typically targets most profitable firm at the
moment…cuts deal and tries to get other two to follow pattern


Treaty of Detroit as Example
Target Ford…get GM and Chrysler to follow
Becoming less and less common as unions become weaker
Bargaining Units Vary in Type…

Need to be attentive to scope of employer
interests in the unit
 Can
be multiemployer (centralized)
 Bitumionous
Coal Operators Association
 Single-employer,
multi-plant
 Ford
 Single-employer,
 Bronx
single plant (decentralized)
Motts Apple Sauce Plant and Local Union
Single Employer, One Union
Motts Plant
Retail, Wholesale and Department Store Union
Local 1
Types & Examples of Bargaining
Structure: Scope varies…
Craft (narrow)
Multi-employer SingleEmployer(Centralized)
Multi-Site
Single
EmployerSingle Site (Decentralized)
Construction
Long shoring
Airline
Teachers
Firefighters
State Troopers
Electricians in a
small plant
Lawyers for the
City of
Philadephia
Auto
Steel
State Govt.
Industrial Union
in a small plant
Chester Public
Sector Workers
Industrial/Multi Coal
-Skill
Grocery
(Broad)
Bargaining Units Vary in Type…

Need to be attentive to scope of employer interests in the
unit

Can be multiemployer (centralized)


Single-employer, multi-plant


Bitumionous Coal Operators Association
Ford
Single-employer, single plant (decentralized)

Eimer Blankets
 Which
model does Stephen Lerner argue allows
for stronger unions that can win better contracts
for its workers?
Katz & Kochan, 2002
The Decentralization of Bargaining Structure in the
United States

Compared to other countries, the U.S. has a highly
decentralized bargaining structure
 Multi-employer
bargaining is not common in US
 In
many European countries, contracts cover entire industries or
broad regions
 European
employers are now trying to change this…unions
are resisting
 Take
a look at the following slides…
Industry Wide Bargaining
with Inclusive Industrial Unions: Germany
LTV Steel
Waukesha Engine
Ford
GM
US Steel
Metal Industry Employers
Association
BARGAIN PERTAINS
TO ENTIRE
INDUSTRY
Metal Workers Union
Workers at
LTV Steel
Workers at Waukesha
Engines
(small machine shop)
Workers at US Steel
Workers at GM
Workers at Ford
Societal Bargaining with National Labor Federation
Comprised of Industrial Unions: Sweden for much of
20th century
Metal Industry Employers
Association
Transportation Industry
Employers Association
Construction Industry Employers
Association
Electrical Industry Employers
Association
National Employers Federation
BARGAIN
PERTAINS
TO
MOST OF SOCIETY
National Labor Federation
Metal Workers Union
Electrical Workers
Union
Construction Workers
Union
Transportation Workers
Union
The Duty to Bargain


Whether new union or existing union, bargaining must occur
in “Good Faith” …surface bargaining not permitted
Surface bargaining

going through the motions with no intent on reaching a deal

Both parties have an obligation to bargain in good faith with an
intent to reach an agreement

Parties don’t have to agree or be fair…but have to put forth a
serious effort

The New York Times reports owners have gone before the National Labor Relations
Board, claiming the players’ union did not bargain in good faith
The Three Stages of The Bargaining Process
Select Union
Preparation Stage
(Analysis and Planning) Negotiating Team
Select Management
Negotiating Team
Preparation
for Bargaining
Preparation
for Bargaining
Ground Rules
Union: rank & file,
Staff, representative of Exchange of Economic and Noneconomic Demands
Posturing, Exchange of Proposals and Counterproposals
membership
Management: Human
Resource Managers;
Legal staff
Agreement
Crisis
Ratification by Union
Impasse
Contract
Job Action
Hiring of
Replacements
(or)
Resolution of Impasse
Agreement
Ratification by Union
Contract
5-4
Bargaining…

2. Chaison notes that collective bargaining has two
faces: “it is first about getting agreement before
going to the bargaining table and then getting
agreement at the table.” Please explain what he
means by the first part of that sentence: “it is first
about getting agreement before going to the
bargaining table.” Be sure to provide an example
to illustrate your explanation.
The Three Stages of The Bargaining Process
Select Union
Preparation Stage
(Analysis and Planning) Negotiating Team
Select Management
Negotiating Team
Preparation
for Bargaining
Preparation
for Bargaining
Ground Rules
Gather info:
Union: Polls, meetings, Exchange of Economic and Noneconomic Demands
Review grievances, Posturing, Exchange of Proposals and Counterproposals
Economic research
Agreement
Crisis
Management:
economic
Analysis, grievance
review
Ratification by Union
Impasse
Contract
Job Action
Hiring of
Replacements
(or)
Resolution of Impasse
Agreement
Ratification by Union
Contract
5-4
The Three Stages of The Bargaining Process
Select Union
Preparation Stage
(Analysis and Planning) Negotiating Team
Select Management
Negotiating Team
Preparation
for Bargaining
Preparation
for Bargaining
Ground Rules
Bargaining Stage
Exchange of Economic and Noneconomic Demands
Posturing, Exchange of Proposals and Counterproposals
Where, when, how
long, talk to press?
Agreement
Crisis
Ratification by Union
Impasse
Contract
Job Action
Hiring of
Replacements
(or)
Resolution of Impasse
Agreement
Ratification by Union
Contract
5-4
The Three Stages of The Bargaining Process
Select Union
Preparation Stage
(Analysis and Planning) Negotiating Team
Select Management
Negotiating Team
Preparation
for Bargaining
Preparation
for Bargaining
Ground Rules
Bargaining Stage
Exchange of Economic and Noneconomic Demands
Posturing, Exchange of Proposals and Counterproposals
Agreement
Crisis
Ratification by Union
Impasse
Contract
Job Action
Hiring of
Replacements
(or)
Resolution of Impasse
Agreement
Ratification by Union
Contract
5-4
Bargaining


Exchange of economic and non-econmic demands
1. Briefly explain the difference between
distributive and integrative bargaining. Be sure to
provide an example of each.
Bargaining

1. Briefly explain the difference between distributive and
integrative bargaining. Be sure to provide an example of
each.

Distributive deals with distribution of scarce resources, usually pay
and benefits (Chaison 2007: 105)


Zero sum: meaning if workers get 3% raise, that’s money the firm loses
Integrative deals with areas in which “both parties gain together
because they integrate their goals to solve problems jointly (Chaison
2007: 105)


Freeman emphasized this…work together to solve staffing needs
Posturing, Exchanging proposals etc…

SEIU strategy on revealing its wage demand for Janitors in NYC?
Bargaining…

Posturing, Exchanging proposals etc…


SEIU strategy on revealing its wage demand?
“The union, Local 32BJ of the Service Employees
International Union, has inserted a big question mark
into the bargaining by announcing that it will not tell
management negotiators how large a raise it wants
until Dec. 27, five days before the contract deadline”
(Greenhouse 2007)
Subjects of Bargaining

1958 Supreme Court Case known as: Borg Warner

Established 3 Categories of bargaining subjects
 Mandatory,
 Let’s
Permissive, Illegal
examine each one…
Mandatory Subject

A party may insist on its
inclusion and the other party
cannot refuse to discuss it


Example Christmas Bonus



Wages, hours, working conditions
Employees see as wages
NLRB ruled it a mandatory subject
Legal impasse occurs when
parties can’t agree

Impasse?
Mandatory
Rates of pay
Wages
Hours of employment
Overtime pay
Shift differentials
Holidays
Vacations
Severance pay
Pensions
Insurance benefits
Profit-sharing plans
Christmas bonuses
Company housing, meals,
and discounts
Employee security
Job performance
Union security
Management-union relationship
Drug testing of employees
Subcontracting or relocating
union members’ work
The Negotiation Process

Impasse

Point of negotiation where no compromise appears
achievable.
(Katz & Kochan, p.461)

Dead-lock…stalemate

Further bargaining seems futile

Reasons for Impasse



interests of parties have not been reconciled
one party has no intention of settling
union membership rejects proposed contract
Permissive Subject
Permissive

a party must withdraw it from
bargaining if the other party
does not voluntarily agree to
discuss it




concessions seldom made on permissive
subject
Cannot bargain to impasse, or strike
Pensions for employees are
mandatory
Pensions for Retirees are permissive

They are no longer employees under the
NLRB
Management rights as to
union affairs
Pension benefits of retired
employees
Scope of the bargaining unit
Including supervisors in the
contract
Additional parties to the
contract, such as the
international union
Use of union label
Settlement of unfair labor
charges
Prices in cafeteria
Continuance of past contract
Membership of bargaining team
Employment of strike breakers
Employer child care benefits
Plant closings
Illegal Subject
Can not be bargained over
because it violates public
policy or is inconsistent
with NLRA
Hot Cargo
demand that union not
handle goods from
employer involved in a
strike
Illegal
Closed shop
Hot cargo clause
Separation of
employees by race
Discriminatory
treatment
The Three Stages of The Bargaining Process
Select Union
Preparation Stage
(Analysis and Planning) Negotiating Team
Select Management
Negotiating Team
Preparation
for Bargaining
Preparation
for Bargaining
Ground Rules
Bargaining Stage
Exchange of Economic and Noneconomic Demands
Posturing, Exchange of Proposals and Counterproposals
Resolution Stage
Agreement
Crisis
Ratification by Union
Impasse
Contract
Job Action
Hiring of
Replacements
(or)
Resolution of Impasse
Agreement
Ratification by Union
Contract
5-4
Outline


Impasse
Negotiating Wage
Adjustments
 Ability
to Pay, Productivity,
Comparison

Types of Wage Adjustment
 Lump
Sum, COLA, Profit
sharing
 News
of the class
Social Welfare Spending,
(as pct. of gross national product)
40
35
30
25
20
15
10
5
0
Sweden
Neth
Den
Fran
Germ
Italy
UK
US
Federal Budget
Funding the Welfare State: Household
Tax Wedge, 2003
Health Care Spending Compared
Union Help Facilitate the “Great Compression” &
the creation of the American Middle Class
Inequality is Highest in the US…

Ratio of Top 10% to Bottom 10%
Union Density
Compared

Union Density, 2002

US was 13.3%
The Three Stages of The Bargaining Process
Select Union
Preparation Stage
(Analysis and Planning) Negotiating Team
Select Management
Negotiating Team
Preparation
for Bargaining
Preparation
for Bargaining
Ground Rules
Bargaining Stage
Exchange of Economic and Noneconomic Demands
Posturing, Exchange of Proposals and Counterproposals
Resolution Stage
Agreement
Crisis
Ratification by Union
Impasse
Contract
Job Action
Hiring of
Replacements
(or)
Resolution of Impasse
Agreement
Ratification by Union
Contract
5-4
The Negotiation Process

Can either reach an agreement…
 Usually

goes to union members to vote up or down
If voted down back to bargaining table, or declare
an impasse.
Impasses Can Be Resolved 2 Ways

1) If an impasses is reached parties can go to mediation
or arbitration
 Have
an outside party try to broker an agreement
 Private
sector: voluntary
 Public sector: often mandated

2) Or..Management can implement its last offer to the union


Union must then accept it or strike
 “Love it or shove it!”
More on strikes, lockouts and such next week
Collective Bargaining

Broad Range of Topics
Are Negotiated







We’ll Consider Some
of the Big Areas
 Wages
 Health
Care
 Pensions
















Mandatory
Rates of pay
Wages
Hours of employment
Overtime pay
Shift differentials
Holidays
Vacations
Severance pay
Pensions
Insurance benefits
Profit-sharing plans
Christmas bonuses
Company housing, meals,
and discounts
Employee security
Job performance
Union security
Management-union relationship
Drug testing of employees
Subcontracting or relocating
union members’ work
Wages…A Bread & Butter Issue

For Employees Wages Involve:
 Standard
of living
 Ability to plan for retirement
 Measure of self worth

For Employers Wages Involve:
 Largest
Single Cost Factor
 Competition with other firms
Negotiating Wage Rates



Within context set by law, unions and firms negotiate wage
rates…
Good bargaining requires good information about financial
status and position of firm
Employer has access to financial data about firm


Ostensibly knows its situation
Union at a Disadvantage…may or may not have financial
information


Knows needs of members
Often less sure on status of firm…Can get complicated
Negotiating Wage Adjustments

Getting Financial Information


Publicly Trades Firms file 10ks with Securities and Exchange
Commission



Firm is Unable to Pay vs. Firm Does not Want to Pay
Union negotiators can access to determine health of firm
If firm has 1 plant no problem…22 plants problem
Privately Held Firms file no financial reports



Can be trouble
Trade Press…Insider who will help
Liability Suits that required financial info
Wages: What’s Fair?


3 Major Approaches Used By Union
1) Ability to Pay: Company can afford raises so it
should pay them



Base claim on financial information
Company is very profitable, they can pay more
Firm’s response?
Wages: What’s Fair?
3 Major Approaches Used By Union
1)
Ability to Pay: Company can afford raises so it should
pay them




Base claim on financial information
Company is very profitable, they can pay more
Firm’s response?
Just because we can doesn’t mean we should


Money to shareholders, not to workers
Money best used elsewhere
Negotiating Wage Adjustments
2) Productivity: employees should share in increased profits
caused by greater productivity



Labor, machinery/equipment, managerial ability create
profit
Employees entitled to fair share of increased profit
Poses Interesting Problems for Unions


What is fair? How calculate contribution of each?
Measuring Productivity can be tricky?
 Easy in Auto: output per hour= value of goods produced
divided by hours of labor
 Teacher, Sheriff, Nurse…Me? How measure?
Negotiating Wage Adjustments
3) Comparison to Other Workers: demand wages be
adjusted to match those in similar workplaces

Easiest argument for union to make


Especially for local union leaders
But all sorts of questions emerge…like what should
basis of comparison be?
Negotiating Wage Adjustments

Occupational Comparison …but to what?


Unionized Pepperoni Factory vs. other Unionized Pepperoni
Factory

…or maybe to non-Unionized Pepperoni Factory

…or maybe to other factory in same Pepperoni Company
Firefighter in NYC to Teacher in NYC

Is this legitimate…
Negotiating Wage Adjustments

Geographical Comparison…but to where?

Teacher in town A to Teacher in town B

Pepperoni Factory workers to other workers in area

Pepperoni Factory in WI vs. Pepperoni Factory in NJ…or AL

Garment Factory in Philly vs. Garment Factory in Honduras
Geography and Union Density

Manufacturing…a global economy puts some unions in
a bind…


Service Sector is different…


Firm’s must meet the “China price” and many will try to do it
by reducing labor costs
Walmart or Aramark can’t hire people in China to do
work…nor can they move their operations
If unions can raise density in a smaller geographic
region, they can increase their power…
Geography and Density

“Nowadays we represent 70 to 90 percent of building
service workers in these cities (Boston, Denver,
Washington). That means a lot in terms of bargaining
power.”


Stephen Lerner, SEIU
Question…again. How does a high level of union
density in an industry in a particular geographic region
permit the SEIU to bargain better wage increases and
better benefits?
Union Density Matters

Higher Union density in an industry & region translates
into increased bargaining power for union

During bargaining, the low wage example does not exist
 If
basis of comparison is unionized, union is at an
advantage

Level playing field means employers all firms will incur
the same costs
Density Matters for Collective
Bargaining Nursing Homes
California: Bay Area and Los Angeles
Union Density
52%
Bay
Area
Los
Ange
les
Wages
$12.17
8%
Source: SEIU, “United We Win.”
$8.75
Density Matters for CB:
Commercial Building Services
Los Angeles
Union Density
80%
1983
1986
Wages
$7.07 + insurance
10%
$4.50, no insurance
2002
Source: SEIU, “United We Win.”
80%
$9.00 + insurance
Retail (Acme, Shoprite, Walmart)

Union Density in retail, 1993: 26%
Members of retail union twice as likely to have health
insurance
 Members of retail union more than twice as likely to have
pension
 Retail Union Wage Premium is 28%


But…Wages & Benefits Directly Related to Density in
Region
10-20% union density: .03 to .36 cent wage premium
 60 to 70% union density: $1.89 to $2.35 wage premium

Other Forms of Wage Adjustment

Cost of Living Adjustments (COLA)?
Adjusting Pay: COLAs

Cost of Living Adjustments (COLA)?

Negotiated compensation increase given an employee based
on the percentage by which the cost of living has risen

Typically a cents per hour increase (4xs a year)

Measured by CPI… “market basket of goods”



usually CPI-U
(captures 80% workers)
Consumer Price Index Home Page
COLA

Main benefits of COLA for workers?
COLA

Main benefits of COLA for workers?
 Changes
 Why
 Pegs
is this important for workers?
pay to inflation
 Raises

base pay…
become real raises
Main problem for Employers
COLA

Main benefits of COLA for workers?

Changes base pay…

Why is this important for workers?
Pegs pay to inflation
 Raises become real raises


Main problem for Employers

Doesn’t take firm’s performance into consideration

Must pay COLA even if firm is having financial trouble
COLA Trends

Use of COLA decreased over last 25 years
 Decline
of COLA…from 60% to 28% of agreements
Other Forms of Wage Adjustment
One time Lump Sum Payment
Increasingly popular with management. Why?
Adjusting Pay: Lump Sum
One time Lump Sum Payment
Increasingly popular with management. Why?
Total cost during the contract is easier to predict
Do not increase hourly wage rates
Workers Accept, but problems?
Adjusting Pay: Lump Sum
One time lump sum payment
Workers Accept, but problems?
Does not effect base pay
$100,000 = 2% raise = $102,000 and next year
starting base pay is $102,000
$100,000 = lump sum of $2000 = $102,000 BUT next
years starting best pay is still $100,000
Adjusting Pay: Profit Sharing
•
Workers receive a lump-sum payment in addition
to regular wage

Payment is based on negotiated formula
Can get complicated…a problem for local unions

Found in 10% of CB agreements

•
Management favors profit sharing
payments…Why?
Adjusting Pay: Profit Sharing
Management favors profit sharing payments
because…Why?
Profit Sharing

Payment does not get made if company did not make a profit

Not tied to inflation …a measure which doesn’t take company’s
performance into consideration

Provides incentive to make company more profitable

Lump sum, one time payment…Again…why is this good for
employer?
Adjusting Pay: Profit Sharing
Problems for Workers

Lump sum does not go into base pay

Profits may stagnate or decline in their firm while prices
around them go up


Saturn and UAW
Wages stagnate, but kids college costs up 10%
Public Employees


Many Aspects of bargaining are the same…but complicated by fact
that workers are public employees
Budgets funded by tax dollars so can be a source of tension


Public Sector Unions often politically active


School board, city council, governor
Often very well organized and actively lobbying for increased budgets
Adjustment Arguments Become More Complicated



Ability to pay impacted by willingness to raise taxes?
Comparisons to other districts? Union wants richer one, city a poorer one
Comparisons to non union workers? $60,000 vs. $25,0000

Turnpike workers yesterday
A Lot Going On….


Indiana: Governor took away the right for public
sector workers to unionize
NJ: Christie obtained 2 percent property tax cap
 Will
limit ability to raise property taxes, thereby limiting
money for police, fire, teachers, city workers

WI:
 “public
employees will only be able to collectively
bargain over wage increases no greater than inflation”
3/16/11)
(BW
Next…

Collective Bargaining Subjects
 Pensions


& Health Care
Grievance Procedures
Strikes