2011 Collective Bargaining Settlements Continue Downward Trend

Construction-industry collective bargaining negotiations completed in 2011 resulted in an average first-year increase in wages and fringe benefits of $0.73 or 1.7 percent, according to the Construction Labor Research Council’s (CLRC’s) annual report on settlements. Last year, the average was $0.80 or 1.7 percent, which was the first time since 1985 that increases dropped below two percent.  This reflects the continuation of a trend that began in 2009, when the average first-year increase of $1.23 or 2.8 percent was significantly higher than in 2010 and 2011, but was still the lowest since 1996. CLRC notes that, for the first time in over five years, first-year increases negotiated in 2011 were lower than the Consumer Price Index (CPI).  The CPI in November 2011 was 3.4 percent, while it was just 1.1 percent at the same time a year earlier.  CLRC further notes that the Employment Cost Index, a better indicator of actual changes in labor cost, was 1.6 percent in September 2011 and was 1.5 percent in September 2010. Another continuing trend since 2009 is the shortened duration of contract terms, with 68 percent of 2011 settlements lasting only one year.  This is common in tough economic times and portends that bargaining activity will be heavy again this year.  For many years prior to 2009, the negotiation of three-year contracts was most common. Where multi-year agreements were executed in 2011, the average second-year increase negotiated was $1.29 or 2.3 percent, and the average third-year increase negotiated was $1.54 or 2.7 percent, CLRC reports.  This compares to 2010 settlements of $1.16 or 2.1 percent for the second year, and $1.39 or 2.7 percent for the third year. The complete report is posted along with other CLRC reports on the Labor & HR Topical Resources page of AGC’s website at www.agc.org/labor/topicalresources.  Select “Collective Bargaining” from the first pull-down menu and “Collective Bargaining Agreement Data” from the second for links to the reports.  For a searchable database of collectively bargained wage and fringe benefit rates, click here. AGC is a founding member of CLRC and supports its efforts to gather and report useful and accurate labor-related information for contractors.  Collective bargaining AGC chapters are reminded to kindly send all settlements information to CLRC promptly upon completion.  Information may be submitted to CLRC by e-mail at clrc@clrc.biz, by fax to (202) 347-8442, or by mail to 1750 New York Ave., NW, Washington, DC  20006.