How Do Labor and Management View Collective Bargaining?

Home , Collective bargaining

in labor-management relations. The re- The chief negotiator in the collective How do labor and sults are directly relevant to several criti- bargaining process was identified and management view cal public policy issues, including the interviewed. Among those not respond- role of striker replacements and the na- ing, 13 were not eligible, given the sam- collective bargaining? ture of bargaining in first-contract cases. pling criteria; 86 could not be located; 2 could not be interviewed due to language difficulties; 97 could not schedule an in- Joel Cutcher-Gershenfeld, The survey and sample terview during the time available for the Thomas A. Kochan, The data reported here are from the first study; and 82 declined to be interviewed. and John Calhoun Wells national random-sample survey of union The final sample therefore consists of 777 and management negotiators, conducted union respondents and 780 employer re- ince the passage of the National La- under the auspices of the Federal Me- spondents–a combined total of 1,557, or Sbor Relations Act in 1935, collective diation and Conciliation Service as par- a response rate of 74.6 percent. bargaining has been the primary means tial fulfillment of requirements under the To account for the oversampling of by which U.S. workers can collectively Federal Government’s National Perfor- large units and of users of the Federal 3 negotiate terms and conditions of em- mance Review initiative. In 1993, Presi- Mediation and Conciliation Service, as ployment with their employer. Currently, dent Clinton asked all Federal agencies well as the slightly different union and more than 100,000 contracts are in effect, to conduct a National Performance Re- management response rates, data were covering approximately 9 million workers view, designed to assess the needs of weighted by size, by users/nonusers of and their employers in the private sec- their customers and to ensure continu- the service, and by union or management 1 tor. (An additional 8 million workers are ous improvement in the delivery of ser- affiliation. The statistics are weighted so covered under labor agreements in the vices and products to these customers. as to increase the degree to which they public sector.) Despite the importance of A stratified random sample of 1,050 can be assumed to be reflective of the collective bargaining, the number of contracts was constructed from the 60- collective bargaining population as a workers covered under bargaining con- day contract expiration notices (90 days whole. tracts has steadily declined for nearly four in the health care industry) that are sent With some exceptions, the weighted decades. to the Federal Mediation and Concilia- sample (an average of union and man- While very little national, public de- tion Service, as well as the new bargain- agement responses) closely matches the bate has occurred regarding the future of ing unit certifications for first-contract industry distribution of unionized firms the institution of collective bargaining, a negotiations. A telephone survey was in the country (excluding railroads and less easily observed debate is occurring then administered by the Center for Sur- airlines), as shown below: in practice, as parties either explore co- vey Research at the University of Mas- operative innovations or resort to adver- sachusetts–Boston. A 3-year period– Industry Percent Percent sarial extremes. This report presents evi- from April 1, 1993 to April 1, 1996–was in sample in population dence that the “debate in practice” is far chosen because the average contract du- from resolved. It draws on a new national ration in the Federal Mediation and Con- Mining ...... 0.6 0.9 Construction ...... 8.6 9.2 survey of labor and employer represen- ciliation Service database is 34 Petrochemicals ...... 9 .7 tatives to provide a snapshot of current months. The 3-year period assures that Manufacturing ...... 45.0 4l.0 collective bargaining in the United contracts of different lengths would be Transportation ...... 2.9 4.0 States.2 This report examines the pres- included in the sample. The sample was Communications ... 2.5 1.6 sures affecting labor and management stratified by size (half the sample is drawn Electricity/ involved in negotiations, the issues most from contracts with 250 or fewer bar- natural gas ...... 3.0 1.6 frequently addressed in bargaining, the gaining units and half from larger units) Retail/wholesale/ role of the contract deadline, pressure and by whether or not the parties used services ...... 25.9 30.7 Maritime ...... 1 .4 tactics used by unions and employers to the mediation and conciliation service Health care ...... 8. 6.8 influence the process and its outcomes, for mediation in their most recent nego- Food manufacturing and the quality of the relationships, as tiations. Two-thirds were users of me- processing ...... 1.0 3.1 well as the direction and pace of change diation and one-third did not use mediation in their most recent round of Forty-five percent of the sample is in See authors’ identification on page 31. negotiations. manufacturing, which is both a large and

Monthly Labor Review October 1998 23 Collective Bargaining Process

heavily unionized part of the private sec- dents was virtually identical in small (un- “concern for the future of the union”– tor. The next three largest portions of the der 250 employees) and large bargaining were seen as heavy influences by the sample are retail, wholesale, and service units (10.4 percent and10.8 percent re- same or similar percentages of union and operations; health care; and construc- spectively). Overall, the sample contains management respondents. Interestingly, tion. The balance of industries or sec- a fairly even distribution based on years both parties rate domestic competition tors account for relatively small portions of experience as a labor or management as a fairly important factor (indeed this of the sample, just as they account for representative. Although there are more is one of the top two factors for manag- relatively small portions of the unionized management negotiators with more than ers), yet international competition is seen workforce. Thus, the sample reflects the 20 years of experience, note that the sub- as much less pivotal. While internal population of bargaining units on file at set of negotiators with more than 30 union and management disagreements the Federal Mediation and Conciliation years of experience has more union rep- were not generally seen as heavy influ- Service, with the proviso that manufac- resentatives than managers. These de- ences in negotiations, note that the re- turing and health care industries are mographics not only help interpret the sponses on these two items are exactly somewhat overrepresented and retail and findings, but also present a profile of the reciprocal—with union respondents dis- wholesale services are underrepre- lead negotiators in today’s labor-man- counting their internal disagreements sented. The stratification, by design, agement bargaining. and management respondents having over-sampled bargaining units with 250 the same response on their own internal workers or more and, therefore, the aver- disagreements. age size of the bargaining units in the Influences on collective These data indicate that no one fac- sample (554) is considerably larger than bargaining tor is pivotal in a majority of negotiations. the average bargaining unit (131) in the We begin with a look at the factors union Of the factors that are given relatively contract data base at the Federal Media- and management leaders say heavily in- high rankings as “heavily influencing” tion and Conciliation Service. fluenced their most recent round of col- negotiations, most center on the eco- Following is a demographic profile of lective bargaining negotiations. Respon- nomic context, which suggest that spe- participants in the study: dents were asked to choose whether each cific economic circumstances need to of 17 factors “heavily influenced,” “mod- be examined to understand any particu- Percent erately influenced,” “slightly influ- lar collective bargaining setting. “Low enced,” or “not at all influenced” the trust” is deemed important by suffi- Men ...... 89.5 collective bargaining process. This analy- cient respondents that it too should be a Management ...... 90.5 sis uses the percent of union and man- key factor to take into account during Union ...... 88.5 agement respondents who identified fac- negotiations. Women ...... 10.5 Management ...... 9.5 tors that “heavily influenced” their most Union respondents see almost all of Union ...... 11.5 recent negotiations. This method pro- the factors as more influential than do Age: vides insight into what union and man- their management counterparts. This Under 40 years ...... 11.0 agement negotiators see as the pivotal suggests that union and management 40–54 years...... 54.0 factors affecting bargaining today. negotiators are viewing the process 55 and older ...... 35.0 No single factor stands out as heavily through different lenses–a finding that Years of experience influencing bargaining by more than half is examined later in this report. It also as a representative: of the respondents and most factors were suggests that union leaders see them- Under 10 years ...... 28.7 only perceived as a heavy influence by selves as being under a broader range of Management ...... 29.1 less than 20 percent of the respondents. pressures, and that these pressures are Union ...... 28.7 10–20 years ...... 38.3 (See chart 1.) The top factors for union more severe than the pressures per- Management ...... 35.9 respondents were “fringe benefit pres- ceived by management counterparts. Union ...... 41.9 sure” and “falling real wages,” followed More than 20 years ... 32.9 by “low trust,” and “fear of job loss.” Management ...... 34.9 Union and management respondents Agenda items and Union ...... 29.2 More than 30 years: differed widely in their perceptions of agreement outcomes Management ...... 5.9 these four factors. However, the next Not all issues raised during the collec- Union ...... 10.3 three factors—“domestic competition,” tive bargaining process end up in the The distribution of female respon- “pressure for work rule flexibility” and resulting labor agreements. The types of

24 Monthly Labor Review October 1998 Chart 1. Union and management perceptions of factors heavily influencing negotiations, 199396 round of bargaining

Percent

0102030405060708090100

Fringe benefit pressure

Falling real wages

Low trust

Fear of job loss

Increased domestic competition Union perception Management perception Pressure for work rule flexibility

Concern for the future of the union

Internal management disagreements

Union strike threats

Threats of plant closings

Increased international competition

Management inexperience

Adjustments to new technology

Internal union disagreements

Pressure to upgrade skills

Threat of moving, nonunion location

Union inexperience

01020304050607080901000

NOTE: Weighted data. Percent

Monthly Labor Review October 1998 25 Collective Bargaining Process

issues raised provide an insight into the the management respondents were al- negotiations, compared with 11 percent agenda of labor and management. The most twice as likely to report a wage for management respondents.5 Issues re- issues on which agreements are subse- freeze, compared with the tendency of lating to union security were on the table quently reached provide an insight into union respondents (21 percent versus 12 in slightly less than half of the negotia- the relative power of the parties, as well percent). This suggests that manage- tions, with a similar variation between as the areas of mutual agreement. The ment is putting its own agenda on the union (26 percent) and management (12 survey questioned respondents about table with some frequency, and is focus- percent) respondents. their experience with 13 issues—whether ing on reducing the rate of increase of each issue was discussed and, if so, was labor costs. Committees. Approximately 1 in 3 ne- an agreement reached. The responses Wage increases were proposed in vir- gotiations involved discussion related yield the total proportion of cases in tually all of the negotiations and achieved to joint labor-management committees, which the issue was “on the table” in in nearly all cases (more than 94 percent). with between one-quarter and one-fifth collective bargaining, and indicate the Benefit increases were also proposed in of the negotiations involving an agree- likelihood of agreement once an issue is the vast majority of negotiations (more ment about such committees. Joint ini- placed on the table. (See table 1.) than 92 percent), and were achieved in tiatives on health and safety were more On nearly all issues, union and man- about two-thirds of the cases. In fact, common, with the issue on the table in agement respondents are in close agree- union and management hold different about 60 percent of the negotiations. ment regarding discussions of items in views on this issue–union respondents Agreements were reached on health and their most recent negotiations. There are reported benefit increases in 70 percent safety committees in more than one-third some differences, however, in the degree of the cases, while management respon- of the negotiations. to which one party or the other reports an dents reported increases in only 56 per- issue as part of the final agreement.4 When cent of the cases. Other agenda issues. Much variation a gap exists between union and manage- exists in the degree to which new work ment responses, it is perhaps not surpris- Job/union security. Approximately arrangements are placed on the agenda ing that the party reporting a higher fre- half of the negotiations featured discus- and incorporated in agreements. Ap- quency of agreement on an issue is also sions of job security; however, far fewer proximately two-thirds of the negotia- the party for whom this issue is most fa- agreements were reached on this issue. tions involved discussions of changes vorable. For example, a higher proportion (See table 1.) Union respondents re- in work rules to increase flexibility (work of union respondents report agreements ported agreements in 28 percent of the rule flexibility), with agreements reached on job security, higher proportions of management respondents report agreements on work rule flexibility. Table 1. Union and management perceptions of issues discussed and incorporated in final agreements, 199396 round of bargaining [Weighted data in percent] Wages and benefits. Either labor or management may place wages and ben- Discussed Agreement efits on the agenda, generally, with labor Issue proposing increases and management Union Management Union Management Wages and benefits: proposing no increases or decreases.. Base wage reduction ...... 39 40 3 4 As table 1 shows, relatively few agree- Benefit reduction ...... 63 60 21 26 Wage freeze ...... 52 54 12 21 ments reported reductions in base wages Wage increase ...... 99 99 95 94 (3 percent for unions; 4 percent for man- Benefit increase ...... 94 91 70 56 agement), although more than one-third Employment security: of the negotiations discussed such re- Job security ...... 55 52 28 11 Union security ...... 43 39 26 12 ductions. Benefit reductions were discussed in nearly two-thirds of the nego- Committees: Labor-management committee ...... 34 31 23 15 tiations and were much more likely to be Health and safety committee ...... 59 60 43 29 incorporated into final agreements. Ap- Work arrangement: proximately 20 percent of agreements in- Team-based work system or cluded some form of benefit reductions. job rotation ...... 25 32 11 9 Worker participation ...... 34 33 14 16 Although there is close alignment be- Work rule flexibility ...... 58 63 22 39 tween union and management responses Pay for knowledge, profitsharing, or gainsharing ...... 34 35 13 12 regarding wage and benefit reductions,

26 Monthly Labor Review October 1998 in approximately one-third of these years, there has been evidence of nego- more than 30 days after contract expira- cases. (See table 1.) Management was tiations continuing long after contract tion. The pattern is similar among man- more likely to report such agreement (39 expiration dates and of a diminished im- agers, with 1.7 percent of agreements percent), than was labor (22 percent). pact associated with strike threats.6 At within 30 days of expiration involving a Other agenda issues include team-based the same time, employers have become strike and 2.9 percent of settlements af- work system or job rotation, increased more pro-active by threatening to use re- ter 30 days involving a strike. worker input in management decisions, placement workers or threatening to re- These data indicate that from one- and alternative pay systems (pay for locate or close operations if a strike oc- quarter to one-third of negotiations con- knowledge, profitsharing or gainshar- curs.7 The role of these delays and tinue more than a month past the con- ing). All of these items were on the threats is discussed below—with re- tract expiration without a strike. These agenda in approximately one-third of the spect to contract renewal cases and first- cross sectional data do not allow us to negotiations. Agreements were reached contract negotiations. determine whether the uncoupling of on worker participation in about 14–16 contract deadlines and settlements is a percent of negotiations, with agreements Delays and strikes. About 59 percent new development. However, a study, on new pay systems in 12–13 percent of of union respondents and about 53 per- using the Bureau of Labor Statistics the negotiations and agreements on cent of management respondents report sample of bargaining units with 1,000 or team-based work systems and job rota- that settlements occurred within 1 month more employees, reported a 13-percent tion in 9–11 percent of the negotiations. of the contract expiration date. Approxi- rise in the number of negotiations settled Thus, these three aspects of new work mately one-third of the union respon- past the contract expiration date in the systems are put on the table less fre- dents and about one-quarter of the man- 1980s (from that in the 1970s), and that quently than traditional economic and agers report settlements were reached 23 percent of the negotiations are settled work rule issues and agreements are more than 30 days past the contract ex- more than 1 month after the contract ex- reached in less than half the instances in piration date. The balance is divided piration date without engaging in a which these items are discussed. among early settlements (3.6 percent strike.9 Still another recent study, involv- Agenda items and agreements regard- union; 5.7 percent management) and first ing data from the central Michigan re- ing traditional wage and benefit in- contracts (6.9 percent union; 9.0 percent gion during the 1987–91 period, found creases generally span all or nearly all management).8 Traditionally, the ap- that 55 percent of negotiations lasted negotiations in the collective bargaining proaching contract deadline was pre- longer than 30 days past the contract ex- process. Further, a number of manage- sumed to help focus negotiations, be- piration date.10 Thus, whether or not ment concessions are on the agenda in cause movement past the deadline these delays are a recent development, at least half of the negotiations, with introduced the risk of a strike. However, the three studies suggest they are rela- agreements in about one-quarter of the the data suggest that there may be some tively frequent occurrences during the negotiations. The same pattern holds for uncoupling of strikes, deadlines, and collective bargaining process. job security, suggesting that both man- delays. agement and labor are proposing items A total of 4.0 percent of union and Threats and use of replacement work- that the other party would probably pre- management respondents report strikes. ers. The threat and use of replacement fer not to have on the agenda. Elements The frequency of strikes is higher in first- workers has been an important, contro- of new work systems are on the agenda contract situations, with 6.1 percent of versial issue among practitioners, pol- in about one-third or fewer negotiations, union respondents and 11.4 percent of icymakers, and academia. Employers with agreements on these matters in only managers reporting strikes in first-con- view replacement workers as a necessary about 9–16 percent of the cases. The pic- tract cases (in contrast with 3.8 percent workforce that will maintain business ture that emerges features pockets of in- of unions and 3.1 percent of managers operations during a labor stoppage; novation, along with a high proportion reporting strikes in renewal situations). unions and their members perceive re- of traditional activity. While we do not know the exact dura- placement workers as a fundamental vio- tion of strikes, a fairly high percentage lation of a presumed social contract in of the strikes were resolved within 30 the workplace. Agreements and impasses days of contract expiration. Among In assessing the role of striker replace- Historically, the threats of a strike and union respondents, strikes occurred in ments in the bargaining process (like the the imminent contract expiration dead- 2.9 percent of all settlements that were role of the strike itself), it is important to line have been central features motivat- within 30 days of contract expiration. consider both the threat and the actual ing the parties to reach agreements in This compares with strikes erupting in use of replacements in negotiations and collective bargaining. But in recent 3.2 percent of settlements that occurred during a work stoppage. Union respon-

Monthly Labor Review October 1998 27 Collective Bargaining Process

dents may be slightly more likely to per- out in first-contract negotiations than in to operate in the shadow of plant-clos- ceive a threat of replacement workers renewal negotiations. This suggests that ing threats. Among union respondents, than are management. Far more impor- these negotiations operate in a much 47.0 percent reported a heavy (or moder- tant, however, the data point to a con- more adversarial and volatile context. ate) influence of such threats in first-contrast between first-contracts and contract Note as well that the threat of a strike is tract negotiations, compared with 25.0 renewal negotiations, as shown in the much less likely in a first-contract situa- percent in renewal situations. Among following tabulation (in percent): tion. As a result, we conclude that first- managers, 15.9 percent reported threats contract negotiations are more likely to of plant closings in first-contract nego- Union Management be conducted under the shadow of very tiations as having a heavy (or moderate) serious management threats and the risk influence, while only 8.7 percent reported Threats: First contracts ...... 14.3 12.9 of at least some of the threats being car- this threat in renewal negotiations. Renewal contracts ... 14.6 10.6 ried out is substantially higher. By contrast, the threat to move to a Use of replacement nonunion location is a less likely factor workers (if Threats to close or move. While the in first-contract negotiations than in re- threatened): threat to use replacement workers has newal negotiations. Only 6.3 percent of First contracts ...... 28.6 25.0 Renewal contracts . 4.2 14.9 been a key source of debate, it is not the union respondents reported that this Threat of strikes: only threat that employers use in nego- threat had a heavy or moderate influence First contracts ...... 4.1 2.9 tiations. Management threats to close a on negotiations in first-contract situa- Renewal contracts . 12.6 4.1 facility or to move to a nonunion operations; 12.7 percent reported the same tion are similarly controversial. Among degree of impact in renewal negotiations. Approximately 14 percent of union the union respondents, 7.9 percent re- Among managers, this threat was not a respondents perceive that contract report that threats of plant closing heavily factor in any of the first-contract nego- newals involve the threatened use of re- influenced negotiations, compared with tiations, but it was reported in 5.9 per- placement workers and about 13 percent 5.0 percent of managers who responded. cent of the renewal negotiations. of managers report such threats. The (An additional 17.5 percent of union re- The above findings suggest that man- pattern is similar in first-contract situa- spondents and 5.7 percent of managers agement threats are clearly a part of the tions, with 15 percent of union respon- report that such a threat moderately in- current collective bargaining landscape, dents reporting such threats and 11 per- fluenced negotiations.) This means that but variation exists in the situations for cent of managers doing so. 1 in 4 union negotiators sees some de- which these threats are utilized. Among While the threat to use replacement gree of threat along these lines, while those negotiations in which both parties workers is similar in first contract and only 1 in 10 managers reports making reported the threatened use of replace- renewal situations, the actual use of re- such a threat or implying that such a ment workers, none featured either a placement workers in first contracts is threat exists. threatened plant closing or a threatened substantially higher. In first-contract situ- When it comes to threats to move to a move to a nonunion location. Also, first- ations in which the use of replacement nonunion location, 3.6 percent of union contract negotiations involve distinct workers is threatened, union respon- respondents reported that such a threat patterns of management threats. Com- dents reported the actual use of replace- heavily influenced negotiations, and an pared to renewal negotiations, first con- ment workers in approximately 29 per- additional 7.7 percent reported that this tract negotiations are more likely to in- cent of the negotiations. This contrasts threat moderately influenced negotia- volve threats to use replacement workers with only about 4 percent of the cases tions. Among employers, just 1.1 percent or to close the plant and less likely to reported by union respondents in re- reported the threat to move to a non- involve a threat to move to a nonunion newal negotiations. For management re- union location as a heavy influence and location. spondents, the contrast was in the same an additional 3.9 percent reported a mod- direction, but not as strong: nearly 15 erate influence. Thus, the threat to close percent reported use of replacement a plant is more common than the threat Experience with interest- workers in renewal situations, and 25 to move to a nonunion location, and based bargaining percent reported such use in first-con- union representatives are more likely than So far, the analysis has focused on union tract negotiations. employers to perceive that such threats and management threats, but the U.S. The data in the above tabulation indi- are being made. collective bargaining landscape is not cate that the threat of replacement work- If first-contract and renewal negotia- dominated solely by power dynamics. A ers is at least twice as likely and possibly tions are compared, we see again that number of high profile negotiations have as much as 7 times as likely to be carried first-contract negotiations are more likely featured various forms of formal prob-

28 Monthly Labor Review October 1998 lem solving and collaboration. Confer- familiar with negotiation that is “inter- be required before there can be broad ences and seminars offering training in est-based bargaining,” which is some- acceptance of this approach. innovative, integrative approaches to times referred to as “win-win” or “mu- Table 2 compares ratings of interest- collective bargaining have become very tual gains negotiating” (the quotes based bargaining with those of traditional popular. indicate the specific terms used in the bargaining among respondents who A number of specific agreements survey questionnaire). were aware of interest-based bargaining. demonstrate new approaches to bargain- For union respondents, a combined to- ing. In 1998, for example, all of the major Perceptions of innovative bargaining. tal of 31.1 percent rated it as “excellent” health care facilities in the Minneapolis Both union respondents and manage- and “very good,” compared with a com- area used a problem-solving approach ment respondents report an awareness bined total of 40.3 percent for the man- to bargaining with the nurses to reach of interest-based bargaining techniques, agers. By contrast, 37.8 percent of union an agreement on critical issues involv- as shown in the following (in percent): respondents rated traditional bargaining ing staffing and professional develop- as “excellent” and “very good,” while ment. Similarly, a multi-employer consor- Union Management only 22.4 percent of managers rated tra- tium of San Francisco hotels and their ditional bargaining in these ways. These unions used an interest-based bargain- Aware of interest- findings suggest a bipolar landscape in ing approach to address key issues re- based bargaining ...... 76.1 61.9 which negotiator preferences cluster Ever used interest- garding customer satisfaction, staffing, based bargaining ...... 47.3 35.2 around either traditional or interest- and pay. American Eagle (the commuter Prefer interest- based bargaining approaches. In fact, subsidiary of American Airlines) and the based bargaining the ratings of the two processes are sig- Air Lines Pilots Association (represent- (among those who nificantly different for both union and ing the pilots) used a problem-solving report having management respondents (above the previously used it) .. 55.8 80.1 approach to hammer out a 15-year agree- 0.001 level for two-sided Pearson Chi- ment that tackled complex issues about Square test). Among union leaders, only Among the subset of the sample who career paths for pilots and labor peace 0.4 percent gave “excellent” ratings to are aware of these new approaches, a for the employer. At a James River facil- both processes and just 10.3 percent strong majority report having used them ity in Naheola, Alabama, the interest- rated both processes as “very good.” (62.7 percent of union respondents and based bargaining process has enabled Similarly, among managers, none rated 57.5 percent of managers). the parties to effectively implement a both processes as “excellent” and just Awareness and reported use of inter- team-based work system. 4.1 percent rated both processes as “very est-based bargaining scored high among The examples of innovative bargain- good.” union and management respondents, but ing approaches are important, but it is a smaller percentage reported it as their also useful to know how widespread preferred method. In fact, even though these approaches are in bargaining situ- awareness and use are higher among Relationship after ations. Are these examples the leading union respondents, an even higher pro- settlement edge of institutional innovation or are portion of managers report a preference Overall, 90.3 percent of managers and they isolated special cases? In an attempt for this approach. Among those respon- 92.6 percent of union respondents re- to answer this question, the survey dents who report having used the inter- ported reaching agreement in their ne- asked respondents whether they were est-based bargaining approach, 55.8 per- gotiations. Because all of the cases in cent of union the sample are drawn from closed cases, respondents and the balance represents plant closings (re- Table 2. Union and management ratings of traditional and interested-based bargaining, 199396 80.1 percent of man- locations or firms going out of business), round of bargaining agers report a prefer- union decertifications, or accretion into [Weighted data in percent] ence for it. Given this other bargaining units. Among unions Traditional Interest-based sharp contrast in and managers reaching settlements, bargaining bargaining Rating preferences among more than one-third report very coop- Union Management Union Management negotiators who re- erative relationships (38.7 percent of port experience with managers and 35.3 percent of union lead- Excellent ...... 7.4 4.3 10.0 14.7 Very good ...... 30.4 18.1 21.1 25.6 interest-based bar- ers). (See table 3.) A slightly larger group Good ...... 39.5 42.9 38.8 35.7 gaining, it suggests in each case report somewhat coopera- Fair ...... 17.5 22.1 22.1 18.1 Poor ...... 5.2 12.6 8.1 5.8 that some adjust- tive relations (44 percent of managers ment in practice will and 38 percent of union leaders). Over-

Monthly Labor Review October 1998 29 Collective Bargaining Process

percent success rate). Similarly, there Table 3. Union and management perceptions of their Impact of were eight strikes reported by manage- bargaining relationship, 199396 round of strikes bargaining ment respondents and only two ended [Weighted data in percent] As mentioned earlier, in agreements (hence the 25.0 percent strikes are more likely success rate). Even in renewal situations, Relationship Union Management to occur during first- however, we still see that only 72 per- contract negotiations Relations: cent of union leaders report negotiations Very cooperative ...... 35.2 38.7 than during contract involving strikes that also conclude with Somewhat cooperative ...... 38.8 44.0 renewal negotiations. Somewhat adversarial ...... 17.1 11.2 an agreement and even fewer agreements Very adversarial ...... 5.5 4.0 Furthermore, the like- (55 percent) are reported by managers. lihood of reaching Nature of change: We conclude that there is a strong nega- Improving ...... 29.2 28.7 agreement is reduced tive impact of strikes on the likelihood of Staying the same ...... 64.2 62.4 when both first-con- Getting worse ...... 6.6 8.9 reaching agreement and that this effect tract negotiations and is further exacerbated during first-con- Pace of change: strikes are involved. Very quickly ...... 8.2 5.7 tract negotiations. Quickly ...... 33.2 27.8 Specifically, among Slowly ...... 53.2 56.6 union respondents, Very slowly ...... 5.4 9.9 final agreements were not reached in 5.8 Collective bargaining at the all, management was significantly more percentof renewal negotiations. By con- crossroads likely to view the labor-management re- trast, 28.6 percent of first contracts did The data provided in this report provide lationship as somewhat or very coopera- not end in an agreement. Among manag- a picture of the pressures, issues, and tive after settlements were made. At the ers, the pattern is the same, with 7.7 per- results dominating collective bargaining other extreme, 4.0 percent of managers cent of renewal negotiations not reach- in the United States today. The results and 5.5 percent of union leaders report ing agreement and 21.4 percent of suggest that a rekindling of discussions very adversarial relations, while an addi- first-contract negotiations ending with- is necessary, at policy and practitioner tional 11.2 percent of managers and 17.1 out an agreement.11 This suggests that levels, about the future of collective bar- percent of union leaders report some- approximately 1 in 4 first-contract nego- gaining as an institution. Although the what adversarial relations. tiation will not end in an agreement—a cross-sectional nature of the data make Slightly less than one-third of the re- troubling situation for proponents of col- it inappropriate to infer trends, the respondents (28.7 percent management lective bargaining. sults paint a sufficiently clear picture to and 29.2 percent union) indicated that The impact of strikes is even bleaker warrant further discussion. the relations between them were improv- for parties just beginning collective bar- While strike threats by labor have ing, while nearly two-thirds of the re- gaining relationships, as indicated in the long been a feature of collective bargain- spondents (62.4 percent management following tabulation of contract success ing, the data suggest that management and 64.2 percent union) reported that rates: threats regarding replacement workers their relationship was not changing. A and plant closings are now a key part of much smaller share of respondents (7.9 Union Management the collective bargaining landscape. percent of managers and 5.8 percent of Awareness of innovative approaches to union leaders) perceived things as get- Agreement without bargaining is high, but preferences dif- ting worse. a strike: fer sharply between labor and manage- However, among those reporting Contract renewal .. 96.7 93.8 ment along these lines. The nature of First contract ..... 71.7 85.5 change, a majority of union (58.6 percent) Agreement with a bargaining over first contracts is particu- and management (66.4 percent) repre- strike: larly troubling. Almost one-quarter of sentatives reported that the rate of Contract renewal 72.0 55.0 these negotiations do not produce an change was slow and very slow. Thus, First contract ..... 66.7 25.0 agreement. In general, and especially in despite the pressures on collective bar- these first-contract situations, the data gaining, the majority of labor and man- Overall, there were a small number of show that strikes and use of replacement agement representatives report that their strikes, so these data need to be treated workers are extremely volatile tactics that relationships are not changing and, with caution. For example, there were increase the likelihood that no agreement among those who do report change, the three strikes reported by union respon- will be reached. Those parties who do majority indicate that the pace of change dents in first-contract situations and only reach an agreement are likely to start off is slow. two ended in agreements (hence the 66.7 with highly adversarial relationships.

30 Monthly Labor Review October 1998 This does not bode well for the future of in bargaining on a wider array of issues ties of interest? The survey results pre- collective bargaining. and are less enthusiastic about interest- sented here do not provide answers, but Throughout the data, significant dis- based bargaining than are employers. they do highlight the need for intensi- parities are apparent between labor and Can we expect an institution to innovate fied discussion among those concerned management perceptions. For example, and revitalize itself in the face of such about the future of collective bargaining union leaders perceive more pressures disparate views between the major par- as an institution.

Footnotes AUTHORS’ IDENTIFICATION: Joel Cutcher- sponsible for assisting the parties in the pri- gic Negotiations (Boston, Harvard Business Gershenfeld is a visiting Associate Professor at vate sector (excluding the railroad and airline School Press, 1994). the Olin Graduate School, Babson College, industries) and improving the processes of col- 7John F. Schnell and Cynthia L. Gramm, “The Babson Park, Massachusetts, and at the Sloan lective bargaining and labor-management rela- Empirical Relations between Employers’ School, MIT, Cambridge, Massachusetts; Tho- tions. A complete report of the findings is avail- Striker Replacement Strategies and Strike Du- mas A Kochan is the George M. Bunker Pro- able from the authors through Thomas Kochan, ration, Industrial and Labor Relations Review, fessor of Management at the Institute for Work Sloan School of Management, MIT, 50 Memo- vol. 47, 1994, p. 189. and Employment Research, Sloan School, MIT, rial Drive, Cambridge, MA 02139. Cambridge Massachusetts; and John Calhoun 4To observers unfamiliar with labor-man- 8Note that the higher percentage of first Wells is the former Director of the Federal agement relations, it might seem odd that there contracts among management respondents is Mediation and Conciliation Service and is now could be disagreement on whether agreement an important factor to consider when compar- serving as a third-party neutral with Calhoun was reached on a given agenda item. In fact, ing other union and management responses. and Associates. hundreds of labor arbitrators are kept busy on a 9Peter C. Cramton and Joseph S. Tracy, “The 1Bureau of National Affairs, Labour Data daily basis with just such disagreements. Determinants of U.S. Labor Disputes,” Jour- 5 Book (Washington, DC, 1997). On the issue of employment security, it is nal of Labor Economics, no. 12, 1994, pp. important to note that an earlier study of a 181–209. 2The William and Flora Hewlett Foundation sample of 491 Federal Mediation and Concili- 10 provided support for this research. ation Service cases from the central Michigan Joel Cutcher-Gershenfeld, Patrick McHugh, and Donald Power, “Collective Bargaining in 3This report contains the findings for the region from 1988 to 1990 featured only 3 per- Small Firms: Preliminary Evidence of Funda- major part of the survey pertaining to labor cent with any language on job security. While mental Change,” Industrial and Labor Rela- and management views in the collective bar- the data are not fully comparable, it is at least tions Review, vol. 49, 1996, p. 195. gaining process. The survey also explored the suggestive of an increased frequency of con- priorities held by labor and management re- tact language on employment security. 11In both cases, the differences are signifi- garding the Federal Mediation and Concilia- 6Richard E. Walton, Joel Cutcher- cant at the 0.001 level (two-sided Pearson Chi- tion Service, the designated Federal agency re- Gershenfeld, and Robert B. McKersie, Strate- Square test).

Fax-on-demand available Users of data from the Bureau of Labor Statistics can request a fax of news releases, historical data, and technical information 24 hours a day, 7 days a week, from the Bureau’s fax-on-demand system. Users can receive news releases of major economic indicators (see schedule on back cover) at 8:45 a.m. on the morning the data are released. The number to obtain data from the national office is: (202) 606-6325) Use a touch-tone telephone and follow the voice instructions for entering document codes and your fax telephone number. The fax-on-demand catalog, containing a list of available documents and codes, can be obtained by entering code 1000. You may request up to four documents with each call. Faxes are sent immediately following the request. If your fax line is busy, the system attempts to send the requested material four times before disconnecting.

Monthly Labor Review October 1998 31