It is becoming clear that union employees in the last year or so have high wage expectations. Contract settlements are becoming much more difficult to achieve. Here are some of the reasons for it.

1. Covid is a big part of it. Employees will regularly say “we worked our butts off during Covid, risked our health, and we need to be rewarded with a big increase”.
2. Labor shortage. Signs in all industrial parks advertising high starting wages and signing bonuses.
3. State and local minimum wage increases have created serious wage compression between new employees and long-term employees. It tends to become a fairness issue. This same wage compression problem comes into play with the current labor shortage where much higher starting wages are paid to new hires.
4. Phenomenon of reaching an agreement with the union at the bargaining table but rejection at the ratification vote. This is common these days.
5. Media hype of large settlements following rejection of a contract settlement and a strike. John Deere 10% increase the first year. Kellogg’s – 15% over three years.
6. Inflation/gas prices with the annual inflation rate currently at 8.6%.
7. Before Covid, wage increases were quite predictable and were in the ballpark of 2-3% annually. BLS statistics, federal mediators experience and labor lawyers experience confirm the range, and that’s where we were a few years ago. That is not true today.

If you want to talk about this, contact Richard Wessels or call 630.377.1554.