September 9, 2000 By STEVEN GREENHOUSE
It has been a big month for big labor, judging from the bargaining results at some of the nation's best-known companies.
Bridgestone/Firestone, the embattled tire maker, averted a strike earlier this week by granting its 8,000 workers raises that will run from 15 percent to 30 percent over three years — raises that are far above the inflation rate.
At United Airlines, the 10,500 pilots have won an immediate raise of 21.5 percent or more to make up for lagging wages, and that does not include annual wage raises, totaling 16 percent over four years.
And when 86,000 telephone workers ended their recent two-week strike at Verizon, the new name of Bell Atlantic, they boasted that their contract calls for a 4 percent raise each year for three years, along with stock options and profit sharing expected to be worth at least 1.5 percent more a year.
Those workers also made major strides on noneconomic issues — their contract addresses some of the job stress gnawing at workers in the new economy by, for example, restricting mandatory overtime.
"These are definitely lucrative contracts," said Richard Hurd, a Cornell University professor of labor and industrial relations. "They are the result of the good economy and of unions becoming more sophisticated in their negotiations over the past 20 years."
While it remains unclear whether these settlements will set a pattern for other contracts, what is clear is that labor unions are doing much better at the bargaining table than just a few years ago, when much of corporate America was demanding — and winning — major concessions on wages and benefits. And these newly bargained contracts, along with others negotiated over the last year at auto, steel and aircraft companies, show that in many unionized industries wages are beginning to soar after years of relative stability.
To be sure, in many contracts in which unions obtain major wage increases, they compensate by agreeing to concessions on fringe benefits. But in the latest contracts, there were large increases, not decreases, in benefits as well. In the Firestone contract negotiated by the United Steelworkers of America, pensions are to increase 22 percent to 50 percent.
Union leaders assert that these contracts will serve as a pattern for other unionized workers — a notion that worries many economists and corporate executives, who fear that soaring wages will spur inflation and cut profits.
"We're going to be seeing other impressive union contracts," said Richard Bank, director of the A.F.L.- C.I.O.'s center for collective bargaining. "Union settlements are running higher than they were several years ago."
But some academics and business leaders said the impressive gains at Firestone, United and Verizon would not be widely imitated because they resulted from one-of-a-kind situations that forced management to be more generous than it otherwise would have been.
United was in a poor position to withstand a strike because many customers were already seething over its many flight cancellations and delays in recent months. For Firestone, it was hard to imagine a worse time to weather a strike because the company faces a serious crisis over defective tires and needs to replace millions of recalled tires as soon as possible.
Several labor experts said that because unions now represent less than 10 percent of all workers in the private sector, it will be hard for workers throughout the economy to clinch the large gains made at Firestone, Verizon and United.
"In the broader work force, the level of insecurity and uncertainty that was happening in the economy remains substantially high, so you will not see an explosion of wage increases as a result of these contracts," said Paul Osterman, a professor of management at the Massachusetts Institute of Technology.
But these contracts are already having undeniable effects. Pilots at American Airlines are suddenly looking less kindly at their own tentative agreement and several of them say they are more likely to vote it down now that they have seen how much better United's pilots did than they. And Delta Air Lines pilots, emboldened by the United contract, plan to begin demonstrating this week because they are unhappy about long-stalled efforts to negotiate a new contract.
Union leaders representing 18,000 workers at Goodyear and 4,000 at Uniroyal said they hoped the Bridgestone/Firestone agreement would serve as a pattern — and inspiration — for them.
The impressive Verizon, Firestone and United contracts have one thing in common: they were negotiated in heavily unionized industries. In other words, these contracts show that even though the percentage of unionized workers in the labor force has declined steadily for four decades, labor still has a lot of influence in industries where most workers are unionized.
It is not at all clear, labor experts say, that the strong wage gains in steel, autos, rubber and airlines will be imitated by unionized employees in the public sector or by unionized employees in industries like health care, where only a small percentage of the workers are organized.
Nowadays, unions feel emboldened because the unemployment rate is near its lowest point in four decades and the economic expansion keeps breaking records for longevity.
"Traditionally, when unemployment is low, unions do well because employers realize that the threat of a strike is more serious," Professor Hurd said. "In that situation it's much harder for companies to keep operating by hiring temporary or permanent replacement workers. And in boom times, demand is greater so companies have more business to lose."
All this is a far cry from the 1980's when workers in heavily unionized industries like steel, rubber and automobiles took it on the chin — and made concessions — because of recession and a deluge of imports. And in the 1980's many unions were cowed into submission after Phelps- Dodge miners and federal air traffic controllers lost their jobs when their employers replaced them with permanent replacement workers.
But unions have developed more sophisticated tactics. Even though Bridgestone/Firestone used 2,300 replacement workers during a 10- month strike that began in 1994, the steelworkers' union was able to pressure the company into signing a contract because union members picketed tire dealers and speedways across the country to urge drivers to boycott Firestone tires.
Bernard Kleiman, one of the steelworkers' chief negotiators, said another reason that wages had risen strongly in the recent contracts is a social compact between unions and major industries. He said unions had agreed to cooperate with companies to help them cut costs and restructure to make them more competitive.
"In industries like steel and rubber," Mr. Kleiman said, "we're globally more efficient than the rest of the world, and in return we demand job security and good wages, and that's the responsible way to go."
Largely because of the low unemployment rate and booming economy, unionized workers and nonunion workers alike have received greater pay increases over the last year or two. Employers have felt pressure to pay more to keep their employees from jumping to competing employers.
In the first 36 weeks of this year, according to the Bureau of National Affairs, a research group, union contracts called for 3.7 percent wage increases in the first year, up from 3.4 percent in the 1999 period.
But some economists say there may be little need to worry that the higher wages will translate into inflation.
"We're having greater productivity growth, so I wouldn't worry so long as these wage increases come in areas where there is nice productivity growth," said Richard Freeman, a Harvard University labor economist.