Collective bargaining can be added to the list of areas in which US unions scaled new heights in 2023, along with organizing and striking.
Union contracts negotiated in 2023 gave workers an average first-year wage increase of 6.6%, the highest average pay raise for any year since Bloomberg Law began tracking union wage settlements in 1988.
With signing bonuses and other lump-sum payments added to the calculations, 2023’s average first-year wage increase was 7.3%, also a record high, according to Bloomberg Law’s latest Quarterly Union Wage Data report.
The 2023 calculations are based on Bloomberg Law’s analysis of wage changes that were reported in 952 union contracts ratified last year, covering a total of approximately 2.8 million union-represented workers nationwide.
Union-secured wages have surged since 2020, as labor negotiators have called their management counterparts to account for cost-cutting moves made during the pandemic and economic shutdown. Indeed, the 6.6% average pay raise provided by contracts signed in 2023 more than doubled 2020’s average (3.1%).
2023 built upon huge wage gains in the previous year. In 2022, union-negotiated contracts yielded a 5.7% average raise, representing the largest year-over-year boost on record (from 3.7% in 2021). The jump to 6.6% in 2023 is the second-largest.
The main drivers of the 2022-to-2023 wage boost were unions in state and local government workplaces—many of whom represent front-line workers who had to remain on the job and at risk during the pandemic.
Government union contracts traditionally contain lower annual pay raises than those in the private sector, and 2023 was no exception. But the government sector was where the largest year-over-year change took place, rising from 4.1% in 2022 to 5.5% in 2023. Meanwhile, the wage acceleration was not as fast in nonmanufacturing (from 6.8% to 7.5%) and manufacturing (from 5.4% to 5.8%).
It’s conceivable that by the end of this year, public-sector unions will be out-negotiating manufacturing unions in terms of annual wage increases. However, because lump-sum bonuses are much more prevalent in factories, overall compensation is still expected to rise more for manufacturing workers than for government workers, with nonmanufacturing workers continuing to outpace them both.
Bloomberg Law subscribers can track, search, and run reports on negotiated wage and benefit changes in union contracts by using our Labor PLUS resource. Subscribers can find additional labor data and content on our Labor Relations & Collective Bargaining page.
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Continue ReadingTo contact the reporter on this story: Robert Combs in Washington at rcombs@bloomberglaw.com
To contact the editor responsible for this story: Melissa Heelan at mstanzione@bloomberglaw.com
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