World Trade

Amid labor shortage, union workers make more assertive contract demands in the US

Workers across various industries in the United States are becoming more assertive in their contract demands as they grow increasingly dissatisfied with stagnant pay, high healthcare costs, limited sick time, and unpredictable schedules. Union employees at Spirit AeroSystems, American and United airlines pilots, CNH Industrial and Deere & Co factory workers, and freight rail laborers have all rejected contract offers despite the inclusion of significant pay raises in some cases.

During the height of the COVID-19 pandemic, non-union private sector workers experienced wage increases driven by labor shortages, creating a pay gap between them and their union-represented counterparts. However, this gap has narrowed as unions leverage the worker shortage to offset inflation and benefit from record corporate profits.

Union workers are demanding more affordable healthcare, paid sick time, and flexible scheduling to achieve a better work-life balance. They are no longer willing to settle for economic packages that fail to acknowledge their heroic efforts and personal sacrifices. The International Association of Machinists and Aerospace Workers (IAM) recently rejected Spirit AeroSystem’s offer, citing inadequate base wage increases and higher out-of-pocket medical costs.

However, cautionary tales exist, as some workers have expressed dissatisfaction even after finalizing deals. Caterpillar workers, for example, ratified a deal but felt their union should have fought harder for better pay and protection from healthcare cost increases. Similar instances occurred among freight railroad workers and CNH Industrial factory workers.

With the bargaining power of unions strengthened by record employer profits, other unions are taking note and seeking hefty raises. United Parcel Service workers represented by the International Brotherhood of Teamsters are pushing for a substantial increase, while the United Auto Workers and airline pilots are also leveraging labor scarcity in their contract negotiations.

As the economy continues to recover, experts predict that these rejections of contract offers may persist, with workers using their bargaining power to secure better terms. The profitability of companies and the competitiveness of the labor market are factors that unions are capitalizing on to address worker concerns and achieve favorable outcomes.

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