This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.
From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...
By Jaclyn Diaz and Mara Lee
Health-care inflation continues to create conflict between employers and unions, but the tight labor market is leading to more generous wage scales across industries. And that trend is expected to continue in 2018.
Employer-friendly changes to the tax code will also have unions asking for a share of that bounty at the bargaining table.
“I would anticipate that argument will be made in virtually every negotiation,” said Brian Pedrow, who leads Ballard Spahr’s Labor and Employment Group. But he doesn’t think it’s going to gain much traction with companies.
Unions will be saying “you got this tax break, and we think that’s a great thing, because you’re going to be investing and creating more work, and sharing the gains with us,” said Adam Seth Litwin, an industrial relations professor at Cornell University. That argument will be much easier to win in industries with labor shortages, he said. “But I also think that unions would be very smart to put some very public political pressure on these companies as well.”
Pedrow said Republicans’ intentions are for companies to invest as a result of lower taxes—whether through equipment or expanding the workforce—not to raise wages for the workers they have.
When Congress passed the tax bill Dec. 20, a handful of companies announced a one-time bonus for workers or $15-an-hour minimum wages and credited the tax bill as the motivation.
UPS is one of several major companies with labor contracts expiring in 2018. The Teamsters will be negotiating a nationwide contract with UPS covering more than 200,000 workers.
“I think everyone’s going to have their hand out when it comes to the potential benefit of the tax bill. Certainly investors are going to expect to benefit,” UPS spokesman Steve Gaut said.
Ultimately, UPS says, it’s possible the tax changes will boost “economic activity, which could translate into expanded demand for our services,” Gaut said. If UPS sees more demand, it hires, he said.
Several thousand workers in manufacturing, health care, telecommunications, and hospitality will also see major contracts expiring in the new year.
Health care, always a top-tier issue at the negotiating table, will continue to cause headaches for both sides, especially for unions representing low-wage workers, Richard F. Vitarelli, a principal at Jackson Lewis, told Bloomberg Law.
“Unions continue to fight or resist employee premium cost sharing and increases to premium cost sharing,” he said.
Sometimes that resistance has led to strikes, as when Massachusetts Nurses Association workers walked out at Baystate Franklin hospital in Greenfield, Mass.
“Employers are understandably concerned about bearing all or substantially subsidizing the cost of providing health care,” particularly in the face of legally mandated minimum wage increases, he said.
“Despite an improving economy, there’s only so much money to go around and it’s based on company profits. Something has got to give,” Vitarelli said.
Unions can see when new hires are paid more than incumbents. During bargaining, they’re telling employers it’s time to boost existing workers’ wages, both management-side and union-side representatives told Bloomberg Law.
Union contracts settled in 2017 with hospitals in Kentucky, West Virginia, California, and Washington, D.C., increased nurses’ wages after unions complained new hires were making more than those with many years of experience.
Many contracts contain wage caps, and Pedrow said in the mid-Atlantic region where he practices, some employers are trying to reopen contracts so they can offer more competitive entry-level wages.
A nationwide survey by the trade group LeadingAge found more than a quarter of organizations are raising wages in reaction to recruitment challenges.
Raising salaries is expensive, Litwin said, but “even from a management perspective, it’s not great to have people doing the same work at vastly different wages.”
Wage inflation is most common in the health-care sector, Litwin said. Pedrow said he’s seeing higher wage scales for entry-level hires in the public and private sector and in many fields, including manufacturing and transportation.
To contact the reporters on this story: Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com and Mara Lee at mlee3@bloomberglaw.com
To contact the editor responsible for this story: Peggy Aulino at maulino@bloomberglaw.com
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to books@bna.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to research@bna.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)