The most popular post on our blog in 2016 dealt with trends in Labor-Management relations and collective bargaining. Since its publication in March 2004 it has been one of the most often read articles every year.
It is time to update the article. This week, let’s take a look at some of the current trends we see in labor-management relations. We will continue to examine the trends in an upcoming blog post.
An increase in real wages was seen in 2016 and should continue in 2017. Hourly pay jumped 2.9 percent from a year earlier. Increased hiring made it more difficult for some employers to find workers, forcing some businesses to pay more to attract and retain employees. As a result, paychecks rose in December at the fastest pace in more than seven years. (http://www.postandcourier.com/business/obama-s-final-jobs-report-big-pay-gain-slower-hiring/article_4c1d63ee-d45a-11e6-9bb8-bf89f9c4d3ba.html). In the public sector in Ohio, negotiated wages rose 2.02% in 2015, the highest rate since 2009 (http://www.serb.state.oh.us/sections/research/reports/Wage_Settlement_2015.pdf).
Combined with a low rate of inflation, these gains resulted in one of the first increases in real wages in years (although it was only 0.8%) (http://www.bls.gov/news.release/pdf/realer.pdf). These pressures should continue to result in wage growth in 2017, although it is likely to be small.
The pressure for “Right to Work” will expand. Since the original article in 2014, many states have enacted do called “Right to Work” legislation. While it is not the purpose of this article to discuss the reasoning behind these laws or their impact on workers, we believe these attacks on unions will increase in 2017.
Labor relations will become more contentious. In spite of the obvious advantages of labor-management cooperation we have discussed in numerous posts, it is likely cooperation will be more difficult in 2017. Emboldened by political victories and declining labor membership, those favoring adversarial labor-management relationships are likely to act in a more strident manner. This has the potential to do long-term damage to workplace relationships.
Contract negotiations will become more difficult. As labor relations become more difficult, declining union strength resulting from right to work laws and decreases in the unionized workforce may also embolden management to take a harder line against unions and their members and seek concessions from them. This could threaten contract terms members have assumed would always remain in their agreements.
For example, defined benefit pension plans continue to disappear from the workplace, something that would have been viewed as unfeasible 20 years ago. They have been replaced by “defined contribution plans”, which limit the expense to employers while placing worker pensions at the mercy of the fluctuations of the stock market. Other provisions, such as health benefits, workplace protections, or single salary structures will also be under attack.
Worker gains resulting from executive orders by President Obama are in jeopardy. Since Congress was unwilling to consider workplace reforms proposed by President Obama, he issued executive orders to implement many of his ideas. “We’re not just going to be waiting for legislation in order to make sure that we’re providing Americans the kind of help they need,” he told his Cabinet members. “I’ve got a pen, and I’ve got a phone.”
He issued orders to raise the minimum wage for workers under federal contracts and guarantee the, pad sick leave. He changed overtime rules to guarantee more workers the right to receive time and a half pay when they work over 40 hours in a week. The administration also took steps to protect retirement savings from financial advisors who charge large fees or direct investments into plans that favored the advisor over the investor. (http://www.huffingtonpost.com/entry/barack-obama-workplace-rules_us_586bfbfbe4b0d9a5945cc204?kgq6icoea4lwyiudi)
Any gain workers made through executive orders is in jeopardy due to the change in administration. President Trump has already begun to dismantle many of these orders, and more are likely to come. As a result, workers will be hurt.
The National Labor Relations Board will become more business-friendly. The tone of the NLRB swings from labor to businesses whenever the administration changes from Democratic to Republican. President Trump is likely to appoint more conservative members to the NLRB. It is likely to be string or summer before he makes his nominations to fill vacancies on the Board. Some even speculate he will make no appointments at all, causing the NLRB to be unable to achieve a quorum and make any decisions. Either way, Obama administration efforts such as changes in union election procedures and the ability for unions to organize could be in jeopardy.
In an upcoming blog we will continue to look at current labor-management and collective bargaining trends, such as unemployment, automation, the minimum wage, and communications. In the meantime, we would like to hear your thoughts on these trends or others you see coming in 2017 and beyond.