ANALYSIS: For Labor Negotiators, It Was a Lonely, Low-Paying Q2

Every two weeks, I check the latest additions to Bloomberg Law’s database of wage settlements to see how collective bargaining agreements are telling the story of labor-management pay negotiations in 2020.

Since the start of the economic recession in February and the declaration of the Covid-19 pandemic in March, I’ve seen among these data points some sure signs of lower wage increases bargained in union contracts. But I always maintained that second-quarter calculations would tell us more about the true impact on union workers’ pay.

Historically, there was cause for optimism. The second quarter of the year has traditionally been a busy time for labor relations lawyers—and an expensive time for their clients on the management side.

Not so in 2020. For the first time since 2016, our database shows fewer contracts ratified in the second quarter of the year (143) than in the first (161). And the decline in average wage hikes from 3.3% to 3.1% in 2020 is the first Q1-to-Q2 drop since 2013.

What’s more, for the first time since 2011, the average first-year wage increase negotiated in union contracts has fallen in consecutive quarters. (When lump-sum payments are taken into account, the average held steady at 3.4%.)

In comparison to the most recent years, with union wages still emerging from the hole dug by the Great Recession, the Q2 drop-offs in ratifications and raises were especially stark.

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The average pay raise now stands at a 3.1%, down from 3.3% in the first quarter and 3.5% in the third and fourth quarters of 2019. It’s the lowest mark since second-quarter 2018.

Q2’s double decline is a clear indication that 2020’s recession and pandemic have put some serious brakes on the collective bargaining process—and have necessitated union pay concessions at the negotiating table on a scale not seen since the Great Recession.

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