Union negotiators looking to secure wage-related concessions from employers have reached a new benchmark for success. For the first time in decades—and probably ever—labor contracts ratified in the first quarter of 2023 provided union-represented workers with an average first-year pay raise of 7%, according to Bloomberg Law’s latest Quarterly Union Wage Data report.
A 7% wage hike is the highest average payout in a single quarter since at least 2007. And based on the yearly averages that Bloomberg Law has calculated since it began tracking negotiated wage settlements in 1988, it appears unlikely that a quarterly average has ever hit that mark before.
The latest quarterly report analyzed wage changes reported in 177 collective bargaining agreements signed in Q1, covering a total of approximately 236,000 workers.
With signing bonuses and other lump-sum payments added to the calculations, the average first-year pay increase in Q1 was 7.8%—also the highest quarterly average we’ve seen.
The first-quarter averages represent a jaw-dropping eighth straight quarterly increase in pay raises negotiated in union contracts.
For parties preparing to renew their existing contracts, a wage acceleration trend this strong and sustained is certainly an encouraging sign for labor and a demoralizing one for management. But this same pay boom could actually work against unions trying to secure contracts with newly unionized employers for the first time.
First contracts typically provide workers with higher first-year raises, and with larger signing bonuses, than renewed contracts do. So, at the hundreds of US workplaces that flipped from nonunion to union in 2022 but still haven’t ratified a contract, these skyrocketing numbers could give employers an even greater incentive to apply the brakes to negotiations with their new bargaining units. If this wage fever were to break in the upcoming months, either due to a recession or cooldown in the labor market, the savings at the bargaining table could be considerable.
But that’s a pretty big “if.” And in the meantime, this unprecedented run of wage increases is setting the vast majority of unionized employers back on their heels, even if some might be digging theirs further in.
Bloomberg Law subscribers can find the full Quarterly Union Wage Data Report and other labor data and content on our Labor Relations & Collective Bargaining resource.
Bloomberg Law subscribers can track, search, and run reports on negotiated wage and benefit changes in union contracts by using our Labor PLUS resource.
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