Bloomberg Law
Nov. 7, 2022, 5:34 PM

ANALYSIS: Union Negotiators Rode H1’s Market Wave to Big Raises

Robert Combs
Robert Combs
Legal Analyst

Union negotiators have been capitalizing on the labor market while it’s hot, securing pay raises for their members that are nearly twice as high as they were less than two years ago.

Statistics in Bloomberg Law’s Quarterly Union Wage Data report show that union contracts ratified in second-quarter 2022 called for an average first-year pay raise of 5.3%—the highest average raise in at least 15 years. From Q3 2020 through Q1 2021, first-year raises in union contracts averaged only 2.8%.

With signing bonuses and other lump-sum payments added to the calculations, union wages increased at an even higher rate. First-year raises in Q2 averaged 6.3% when lump-sum payments were factored in, more than doubling the 3% average negotiated in Q3 2020.

The second-quarter payouts have propelled 2022 far ahead of recent years when it comes to wage gains: At 2022’s midyear point, unions negotiated an average 5% first-year pay raise, up from 3% in H1 2021, and 3.2% in 2020 and 2019.

The surge has been driven largely by union negotiators in the private nonmanufacturing sector, where raises in the first half of 2022 averaged 6.3%. But the averages in the manufacturing (4.7%) and state and local government (3.4%) sectors have also shown huge gains over previous years.

Following pandemic-era cutbacks, furloughs, and health-related disputes, unions have said that changes are long overdue in the harder-to-measure areas like working conditions, safety, and employee well-being. But these statistics show that unions aren’t missing their chance to improve their quantifiables as well.

It’s worth noting that the vast majority of these contracts are not coming from the wave of newly organized bargaining units that have dominated the H1 2022. Only 34 of the 411 contracts analyzed in H1 were first contracts, as opposed to renewals.

Because first contracts take so long to ratify, this unionization trend’s full impact on wages may not be known until well into the future. But that future is growing more uncertain, economy-wise. Let’s see what happens when unions forged in a hot labor market have to negotiate their way through a cooler one.

Bloomberg Law subscribers can access, search, and run reports from the Settlement Summaries database by using our Labor PLUS: Organizing and Bargaining Data resource.

If you’re reading this article on the Bloomberg Terminal, please run BLAW OUT <GO> to access the hyperlinked content or click here to view the web version of this article.