Employers Plan on Saving Money When Union Contracts are Renewed

March 17, 2004
Employers with union contracts up for renewal this year plan on giving smaller pay increases than in recent years, according to the Bureau of National Affairs, a publishing company.

Less than 25 percent of employers entering into contract talks say they’re going to propose first-year wage increases of 3 to 3.9 percent. A year ago, about 40 percent of employers were proposing wage increases of this size. Employers now are much more likely to seek increases in the 2 to 3 percent range.

BNA also finds that--for the second straight year--more employers want to reduce or eliminate insurance benefits (such as health benefits) than want to add to them. This is quite different than in 2002, 2001 and 2000, when companies were much more likely to want to improve benefits as they were to reduce or eliminate them.