Year-to-Date Collective Bargaining Negotiations Yield Higher First-Year Increases Than in 2011

Collective bargaining negotiations in the construction industry settled between January and September of this year resulted in an average first-year wage-and-benefits increase of $1.01 or 2.2 percent, according to the latest Settlements Report issued by the AGC-supported Construction Labor Research Council.  For newly negotiated multi-year contracts, the average second-year increase was $1.12 or 2.4 percent, and the average third-year increase was $1.10 or 2.3 percent.  As percentages, the averages negotiated for contract years one and two are higher than averages for those contract years negotiated throughout 2011, but the average for year three is higher than in 2011.  In straight dollar amounts, the new average increase is higher than in 2011 for year one but is lower for years two and three.  Negotiation of zero-percent increases was less common this year than last year. The trend toward negotiation of contracts for a shorter duration, which began when the market downturn took hold in 2008, has continued so far this year but appears to be slowing down.  Of the settlements reported so far this year, 51 percent are for one year and 40 percent are for three years or longer. In a second report recently issued by CLRC called the Wage and Fringe Benefits Settlements Analysis, CLRC advises that, for craft-weighted results, 33 percent of the increase negotiated in 2011 was applied toward wages.  That percentage grew to 45 percent in negotiations settled between January and September of 2012.  CLRC found that 27 percent of the increase negotiated in 2011 was allocated for health-and-welfare funds and 39 percent to pension funds.  These data compare to 16 percent to health-and-welfare and 38 percent to pensions as of September in 2012.  “Craft-weighted” indicates that an average was taken of the results for the 15 crafts represented in the study so that each craft counts as 1/15th of the result; each craft is weighted the same regardless of how many settlements were analyzed for that craft. Looking at settlement-weighted results, 32 percent of the increase negotiated in 2011 was applied to wages, 22 percent to health-and-welfare, and 46 percent to pensions.  In 2012, as of September, 34 percent of the increase was allocated to wages, 16 percent to health-and-welfare, and 49 percent to pensions.  “Settlement-weighted” means that an average was taken of all settlements so that each settlement was weighted the same, without equal consideration of the crafts involved. To read the complete reports, which contain additional data and charts, use the links above, or go to AGC’s online Labor & HR Topical Resources library at www.agc.org/topicalresources and select from the pull-down menus main category “Collective Bargaining” and subcategory “Collective Bargaining Agreements Data.”