ANALYSIS: Rosy Employer Union Outlook May Have Wilted in 2020

Unionized employers conveyed high hopes and expectations for their 2020 bargaining sessions...in late 2019.

Almost all labor relations directors responding to Bloomberg Law’s annual Employer Bargaining Objectives survey indicated they were either “very confident” or “fairly confident” about achieving their bargaining goals this year. Additionally, nearly two-thirds of responding employers reported a “favorable” financial outlook for the upcoming year.

A note of caution is in order, though. This year’s newly released report—marking the 35^th consecutive year of the survey—is based on the responses from 130 participating employers who were asked in fourth-quarter 2019 about their union contracts that were up for renegotiation in 2020. They were therefore unaware of the coronavirus pandemic and economic recession that would change the landscape of work.

We have made the conscious decision to release the survey results with this caveat, knowing full well that many employers may be changing their outlook due to these novel and unforeseen circumstances.

About the Employer Bargaining Objectives Survey

Labor unions have been an important feature of the landscape of work in America since they emerged in the mid-1800s. Workers have organized to negotiate for workplace safety, fair wages, retirement security benefits, and health care, among other protections.

When union membership was at its peak in the 1980s, Bloomberg Law (then the Bureau of National Affairs) began conducting an annual survey to assess management’s objectives going into contract negotiations. Union membership and density has fallen gradually and consistently over the past 30 years, ending 2019 with historic or near-record lows, as summarized in a previous analysis. Bloomberg Law continues the tradition of this survey to describe the goals of employers in their upcoming bargaining sessions.

Since we started this survey 35 years ago, our aim has been to gauge employer confidence levels, describe the terms of expiring contracts, and understand the ‘‘wish lists’’ and priorities of management representatives, representing a broad array of industries and regions, as they prepare to renegotiate contracts with the labor unions that represent their employees. The extensive track record of the study allows for examination of how today’s trends and findings compare with decades of historical data.

High Confidence as Bargaining Approaches

Employers’ high comfort level heading into 2020 negotiations, with 96% describing themselves as very or fairly confident of achieving their bargaining goals, is in line with a very consistent trend over the years of the survey.

Employers are nearly always confident that they will achieve their objectives in overall bargaining and that their enterprises will be financially successful. What ultimately gets agreed upon, and how the business actually fares, can vary—and that may especially be the case this year, with the pandemic focusing attention on certain topics, like job security, work stoppages, and health care benefits.

Concessions to Make, Concessions to Gain

Employers responding to the survey seemed willing to shift on wages at the bargaining table, but not much else. With the backdrop of a strong economy and tight labor market in 2019, 62% of employers said they are willing to make concessions on pay in 2020 labor negotiations, while less than one-quarter were willing to budge on anything else. In contrast, 58% of organizations said they would seek to gain concessions from unions on health care and insurance benefits.

Employers said they intend to be fairly generous about first-year raises this year, with seven out of 10 of management representatives reporting they will propose first-year pay increases in the range of 2 percent to 3.9 percent, up from 64 percent in 2018, but slightly lower than last year’s 75%.

This all makes sense given the way the world looked at the end of 2019. But so far, 2020 has seen a lull of ratified contracts and a drop in average first-year pay increases following a strong January. Given these developments, we expect unions, not management, will push for concessions in areas of health care and insurance—potentially at the expense of wage increases.

An infographic provides a look at the other top-line results from the Employer Bargaining Objectives 2020 report.

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