Rifts Between Labor and Management Increase

Even as the economy once again begins to sputter, the overall strength of the U.S. economy has spurred a marked increase in the number of labor disputes. This trend stands in stark contrast to 2009 when, according to the Bureau of Labor Statistics, there were only 5 major work stoppages (i.e., those involving 1,000 workers or more), the fewest since 1947. The figure ballooned to 11 in 2010, and recent activity suggests there will be another increase in 2011.

On the East coast, 45,000 Verizon workers went on strike in early August, after the company sought concessions from its landline workers to help offset declining revenue in the division. Despite an inability to agree on a new contract, employees agreed last week to return to work provided Verizon agreed to revise the manner in which collective bargaining would proceed.

Out West, members of the United Food and Commercial Workers, which represents approximately 62,000 workers at various grocery stores in California, including Ralphs Grocery Co., Albertsons Inc., and Safeway Inc.’s Vons supermarkets, voted overwhelmingly in favor of authorizing a strike if union negotiators cannot reach agreement with the companies on a bargaining contract to replace the one that expired March 6.

More locally, on August 1, 1,300 union workers were locked out of American Crystal Sugar’s five sugar processing plants in Minnesota, North Dakota and Iowa. The lockout is the company’s first labor impasse in 30 years. American Crystal accounts for 38 percent of the country’s production of sugar from beets and 15 percent overall.

Prior to the lockout, American Crystal offered its employees a 17% pay increase over five years. The offer included a 4% increase in the first year, a $2,000 one-time bonus, followed by annual percentage increases of 3, 2, 2, and 2 percentage points. The previous contract had offered 2 percent annual pay increases. But, the union rejected the offer, citing concerns about provisions relating to subcontracting and health care costs.  On August 24, both sides agreed to resume negotiations.

Bottom Line

Only time will tell whether this trend will continue. But, with hopes fading for a strong economic recovery in the near future, negotiators for labor and management will likely find themselves continuing to battle over a shrinking piece of the pie.