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June 1995, Vol. 118, No. 6
Charles J. Muhl
State and local government workers covered by major collective bargaining agreements up for negotiation in 1994 fared somewhat better in terms of wage changes than they had the last time their contracts were negotiated.1 Wage rate changes under 1994 settlements covering 1,000 workers or more were higher, on average, than the changes specified in 1993 and 1992 pacts-both record lows-as well as those negotiated in 1991.
The larger changes negotiated in 1994 reflect, in part, the effects of an improving economy on the bargaining climate for the public sector generally, although conditions varied from jurisdiction to jurisdiction. From mid-1990 through 1992, the U.S. economy endured a recession and a sluggish recovery, during which tax revenues declined and budget deficits rose in many State and local jurisdictions. These circumstances forced negotiators to try to freeze salaries, increase employee contributions for benefits, and implement furlough days and layoffs.
As the economy gained strength over the past 2 years, the incidence of such cost cutting measures in State and local government declined, although management negotiators continued to seek to hold labor costs down without a corresponding decrease in public services. Employee representatives, however, tended to focus more on wage increases than on job security, especially for larger bargaining units in which workers had taken wage cuts or freezes under the expiring contracts, and in States and localities in which economic conditions were improving.
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1 For data on 1994 settlements in private industry see "Collective Bargaining in private industry, 1994" Monthly Labor Review, June 1995, pp. 3-12.
Comparisons of major collective bargaining settlements for State and local government with those for private industry should note differences in occupational mix, bargaining practices, and settlement characteristics. For example, professional and other white-collar employees make up a much larger proportion of the workers covered by government than by private industry settlements, while lump-sum payments and cost-of-living adjustment clauses are less common in government than in private industry settlements. Also, State and local government bargaining frequently excludes items (pension benefits and holidays, for example) that are prescribed by law; these items are typical bargaining issues in private industry. For a detailed description of how occupational mix and industry activity affect the comparison, see Richard E. Schumann, "State and local government pay increase outpace five-year rise in private industry," Monthly Labor Review, February 1987, pp. 18-20.
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