2000 annual review for the USA

This record reviews 2000's main developments in industrial relations in the USA.

Economic developments

The USA's gross domestic product (GDP) rose by 5% between 1999 and 2000. Personal consumption expenditures rose by 5.3%, gross private domestic investment by 10.2%, and government consumption expenditures and gross investment (including federal, state, and local governments) by 2.8%. The inflation rate (as measured by the Consumer Price Index for urban consumers) stood at 3.4% for 2000. During the fourth quarter of 2000, the unemployment rate fell to 4.0%, the lowest it has been since 1969. In fact, every census region and geographic division in the USA achieved its lowest quarterly unemployment rate on record in 2000.

The number of employed persons grew in 2000 by 1.4 million, a slower pace than in 1999. The employment rates for adult men (73.9%) and adult women (58.6%) remained unchanged from 1999. Of all ethnic groups, employment increases were most significant for Hispanic people, as the number of employed Hispanics aged 16 and older grew by 5.1%, as compared with increases of 2.0% and 0.8% for black and white people, respectively. Foreign-born workers have accounted for an increasing share of the labour force, rising to 12.5% of all employed persons in 2000.

Non-agricultural payroll employment continued to grow in 2000, with growth concentrated in the service-producing industries. Mining employment also increased. Employment in construction and manufacturing fell, although some manufacturing industries related to information technology (IT) grew. Specifically, industries dealing with semiconductors and software showed the strongest gains. However, not all IT-related industries grew during 2000: employment in the personal computer industry declined.

Political developments

In the presidential election held in November 2000, the Republican George W Bush was elected as President, following the end of the second term of office of the Democrat Bill Clinton. Mr Bush defeated the Democratic candidate, Al Gore, winning 271 votes in the electoral college to Mr Gore's 266, and 48.1% of the popular vote to Mr Gore's 48.3%. Dick Cheney was elected as Vice-President. The new President was inaugurated in January 2001. In the new administration, Elaine Chao was appointed as Secretary at the Department of Labor.

Elections to the two chambers of Congress were also held in November 2000. Following the elections (only partial in the case of the Senate), the Republican Party had a majority of 221 to 212 over the Democratic Party in the House of Representatives, while the two parties had 50 seats each in the Senate.

Collective bargaining developments

Background

The principal method for determining overall working conditions in the organised sector of the US economy is collective bargaining, rather than legislation. However, it should be noted that there are three main pieces of legislation governing industrial relations, as follows.

• The National Labor Relations Act of 1935, as amended (NLRA). The NLRA defines the rights of employees to organise and to bargain collectively with their employers through representatives of their own choosing, or not to do so. To ensure that employees can freely choose their own representatives for the purpose of collective bargaining, or choose not to be represented, the Act establishes a procedure by which they can exercise their choice at a secret-ballot election conducted by the National Labor Relations Board (NLRB). To protect the rights of employees and employers, and to prevent labour disputes that would adversely affect the rights of the public, Congress has defined certain practices of employers and trade unions as unfair labour practices.
• The Railway Labor Act of 1926, as Amended (RLA). The RLA governs labour relations in railroads and airlines. A three-member National Mediation Board (NMB) handles disputes over wages, hours, and working conditions which arise between rail and air carriers and organisations representing their employees. The NMB also investigates representation disputes and certifies employee organisations as representatives of crafts or classes of carrier employees.
• The Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). The LMRDA provides basic standards of democracy and fiscal responsibility in trade unions. The LMRDA establishes: a Bill of Rights for union members; guidelines for the regular election of union officers; requirements for the reporting of administrative practices and annual financial activities by unions; standards for the creation and maintenance of union trusteeships; safeguards for protecting union funds and assets; and under certain circumstances, reporting requirements for union officers and employees, labour relations consultants, employers, and surety companies. The provisions of the LMRDA were extended to cover federal employees through the Civil Service Reform Act of 1978.

General

Collective bargaining is usually decentralised, covering a single plant, corporation or area (bargaining is also generally decentralised in the public sector). Most union constitutions require members to vote their approval before any bargaining agreements can be signed. The agreements cover a wide range of issues, including: wages; hours; job classifications; overtime and other forms of pay (including longevity pay, separation pay, and cost-of-living adjustments); absences from work (including paid holidays, vacations, leaves of absence); benefits (including medical and unemployment benefits); and protection of employees with seniority in cases of lay-offs, workforce reductions or work transfers.

In 2000, the total number of workers aged 16 and over who were represented by trade unions was 17,944,000, or 14.9% of those employed in full- and part-time jobs, excluding the self-employed. This compares with 18,182,000, or 15.3% of those employed in 1999. The figure includes workers who are members of unions, as well as workers who are not in unions or employee associations but are covered by union or employee association agreements. Direct collective bargaining coverage can thus be said to be 14.9%.

Local collective agreements usually last two to three years, during which time the parties agree to refrain from strikes or lock-outs. However, in recent years there has been a rise in the frequency of lengthened collective agreements (often known as contracts): while in 1994 only 8% of contracts were for more than three years, by 1999, 22% of all contracts were for longer than three years and 9% were for five years or more.

With some exceptions, the federal government has a general policy of noninterference in collective bargaining negotiations. However, the Federal Mediation and Conciliation Service (FMCS) maintains a list of arbitrators and offers mediators and a preventive mediation programme. FMCS has been involved in 'cooperative' bargaining, an alternative approach to traditional adversarial bargaining that has been used at increasing rates: in 2000, 5.7% of the negotiations in which FMCS was involved used a cooperative approach.

Because there is no systematic means of tracking collective agreements in the USA, it is difficult to estimate the number of agreements concluded in 2000.

Pay

Median weekly earnings of full-time wage and salary workers in the private sector rose from USD 521 (EUR 564) per week to USD 549 (EUR 594) per week between 1999 and 2000. The ratio of women's to men's earnings has increased by 13.5% since 1979: in 1979, women earned USD 0.65 for every USD 1.00 earned by men, compared with USD 0.76 for every USD 1.00 in 2000. Between 1999 and 2000, amongst racial and ethnic groups, median weekly earnings rose the fastest for black people, with an increase of 5.2% to USD 468 (EUR 506) per week, as compared with an increase of 3.1% to USD 591 (EUR 640) per week for white people and 2.9% to USD 396 (EUR 429) per week for Hispanic people.

Within private industry, wages and salaries rose 3.9% for the year ending December 2000, as compared with the 3.5% increase that occurred in 1999. White-collar occupation compensation increased 4.6%, while blue-collar occupation compensation increased 4.2%.

For the period from March 2000 to March 2001, compensation costs, including both wages and salaries as well as benefit costs, rose for all civilian workers at a rate of 4.1%, as compared with increases of 4.3% and 3.0% for the years ending March 1999 and March 1998, respectively. In non-farm private industry, compensation costs rose by 4.2%, compared with 4.6% and 3.0% for the years ending March 1999 and March 1998, respectively. State and local government workers registered relatively lower increases, with a 3.3% increase in compensation costs to March 2001, as compared with 3.6% and 2.9% in the two previous years. Overall, compensation costs increased more for non-unionised workers (4.3%) than for unionised workers (3.4%).

Working time

In the USA, the average weekly 'hours of production' by non-agricultural workers has remained about the same in recent years. Overall, private industry workers (both full- and part-time combined) averaged 34.1 hours per week in 2000, compared with 34.5 hours per week in 1999. Average hours worked differed significantly by industry. In the goods-producing industry, these figures were significantly higher, as those workers averaged 39.8 hours per week in 2000 and 41.0 hours per week in 1999. In contrast, the services industry averaged 32.6 hours in 2000 and 32.7 hours in 1999.

Full-time workers - defined as those working at least 35 hours per week - worked an average of 43.3 hours per week in 2000, the same figure as in 1999.

While working hours have remained stable, there has been an increase in the number of different types of arrangements as to when and where those hours are performed. Flexible work schedules, such as 'flextime', allow employees to vary the time of their arrival and departure as long as they are at the office during established core hours. 'Flexplace' allows employees to telecommute without coming to the office at all. In the public sector, credit or compensatory time arrangements allow employees who accrue overtime hours to use those hours to take time off in the future. However, none of these arrangements is mandated by law, and as of 1997 only 27.6% of all wage and salary workers were on flextime or flexplace.

Training and skills development

Outside the sphere of bargaining (see below under 'Additional information'), the Department of Labor administers laws, policies, and regulations concerning training and skills development, mainly through its Employment and Training Administration (ETA). The programmes that ETA administers include: the operation of integrated training and 'one-stop' employment services centres; Indian and Native American programmes; migrant and seasonal farmworker programmes; apprenticeship training; senior citizen community service employment; training for laid-off workers; a transition programme for welfare recipients; and youth training programmes.

In 2000, one of ETA's main goals was to improve retention rates in its Welfare-to-Work programme, a scheme started in 1998 that gives states and local communities grants to provide welfare recipients, non-custodial parents, and low-income custodial parents with job services and training. Welfare-to-Work ultimately seeks to place participants in unsubsidised employment. Welfare-to-Work exceeded its goal of having 60% of its participants remain in the workforce for at least six months, with a 84% retention rate in 2000.

Legislative developments

Federal legislation

Changes made in 2000 included the following.

• Wages. In May 2000, the Worker Economic Opportunity Act was signed into law. This law allows employers to provide certain stock options to employees without having the profits from those stock options being counted as part of an employee's regular rate of pay for purposes of calculating overtime pay. Before this law was passed, employers ran the risk of facing additional overtime payments under federal wage and hours laws when employees exercised their stock options. The profits from many stock options used to be included in an employee's regular pay rate, which in turn increased the amount an employer must pay the employee who was to receive overtime pay, since overtime pay is calculated at one-and-one-half times the employee's regular pay rate.
• Social security. The Social Security Act of 1935, administered by the Department of Health and Human Services, provides for retirement benefits. Currently, the minimum age at which pensions are paid out is 65, but as of 2000, that age is gradually rising to 67 for younger applicants. Payment amounts are adjusted annually in line with changes in the cost of living index. Payments also are made for surviving spouses and minor or invalid children of deceased beneficiaries. One change that took effect as of April 2000 was the suspension of benefits for any months that a prisoner is confined to a penal institution for conviction of any crime, as long as the confinement lasts for a contiguous period of 30 days or longer. Previously, benefit suspension only applied to crimes that carried a maximum sentence of one year or longer, regardless of actual time served.

State legislation

In 2000, legislation at the state level was heavily concentrated in the areas of healthcare and insurance requirements. The following is a survey of some of the areas of law that saw significant legislative activity in 2000.

• Wages. Minimum wage rates in three states, California, Connecticut, and Rhode Island, were raised by state legislation. Minimum wage rates in four states, Connecticut, Delaware, Massachusetts, and New York, also rose in 2000 due to previous legislation.
• Employment discrimination. Twelve states, the District of Columbia, and Puerto Rico passed laws relating to employment discrimination in 2000. Several states passed legislation relating to genetic testing and information. Other anti-discrimination measures included laws against workplace harassment in Arizona and California and an Executive Order issued in Wyoming adopting an anti-discrimination policy in state government, including a specific prohibition against sexual harassment.
• Child labour. Several states enacted laws or amendments to their existing child labour laws. For the most part, these laws limit the types and hours of employment that minors may work. Also, Colorado, Minnesota, and Pennsylvania increased their administrative penalties for violation of child labour laws.

The organisation and role of the social partners

There are over 16 million trade union members in the USA. The share of wage and salary workers who are union members averaged 13.5% in 2000, as compared with 13.9% in 1999. Although unionisation in the public sector is a relatively recent phenomenon, in 2000 government workers continued to have a substantially higher unionisation rate (37.5%) than workers in the private sector (9.0%). Among private non-agricultural industries, transportation and public utilities workers had the highest unionisation rates, at 24%. Unionisation rates in private non-agricultural industries were lowest in finance, insurance, and real estate at 1.6%.

Demographically, union membership continued to be higher among men (15.2%) than women (11.5%), although the gap between men and women has narrowed from the early 1980s: in 1983 the rate for men was 24.7% and the rate for women was 14.6%. Also, black people had higher unionisation rates (17.1%) than white people (13.0%) and Hispanic people (11.4%).

About 1.7 million wage and salary workers were represented at their workplace by unions in 2000, but were not union members themselves. About half of these workers were employed in government.

The largest alliance of trade unions in the United States is the American Federation of Labor and Congress of Industrial Organisations (AFL-CIO). AFL-CIO was formed through a merger between the AFL and the CIO in 1955 and is composed of autonomous affiliates. The chief components of the Federation are the 64 national and international unions, the trades departments, the state and local bodies, and the directly affiliated local unions. More than 13 million union members in the USA are affiliated with the Federation. The largest union outside AFL-CIO is the 2.6 million-strong National Education Association (NEA) teachers' union.

Employers' organisations with a collective bargaining role do not play an important role in US industrial relations, though some local-level bargaining may be conducted by a local employers' association in a particular industry. There is no tradition of tripartite/bipartite national intersectoral dialogue or consultation in which employers are represented by an umbrella body, and little tradition of national sectoral collective bargaining conducted by employers' associations for a particular industry. In international forums (such as the International Labour Organisation) and international employers' organisations (such as the International Organisation of Employers and the Business and Industry Advisory Committee to the OECD), US employers are represented by the United States Council for International Business (USCIB).

Industrial action

Major work stoppage activity rose in 2000 after dropping to record lows in 1999. Thirty-nine major work stoppages began in 2000, 'idling' 394,000 workers and resulting in 20 million working days of 'idleness'. This compares with 17 stoppages, 73,000 workers idled, and 2 million days of idleness in 1999. A major work stoppage is defined as one in which at least 1,000 workers are involved for at least one shift, and includes both worker-initiated strikes and lock-outs of workers by their employers.

Of the work stoppages in 2000, 31 were in the private sector; the remainder occurred in state and local government. In the private sector, 14 stoppages occurred in goods-producing industries and 17 occurred in service-producing industries. Four of the eight stoppages in the public sector were in education.

The average length of work stoppages beginning in 2000 was 21 days, but 67% of them lasted less than three weeks, and only 10% lasted longer than 50 days.

Equal opportunities and diversity issues

Though equality issues do feature in collective bargaining (see below under 'Additional information'), the main vehicle for ensuring that equal employment opportunities are available in the workplace is through federal civil rights laws. These laws prohibit discrimination in the work place on the basis of race, colour, religion, sex, national origin, age and disability, and include:

• Title VII of the Civil Rights Act of 1964. Title VII, as amended, prohibits employment discrimination on the basis of race, color, religion, sex, or national origin;
• the Equal Pay Act of 1963 (EPA). The EPA prohibits discrimination on the basis of gender in compensation for equal work on jobs requiring equal skill, effort, and responsibility which are performed under similar working conditions;
• the Age Discrimination in Employment Act of 1967 (ADEA).The ADEA, as amended, prohibits employment discrimination against individuals who are 40 years of age and older;
• the Rehabilitation Act of 1973, Sections 501 and 505.These sections of the Rehabilitation Act prohibit employment discrimination against federal employees with disabilities;
• Title I of the Americans with Disabilities Act of 1990 (ADA). Title I of the ADA prohibits employment discrimination on the basis of disability in both the public and private sector; and
• the Civil Rights Act of 1991. The Civil Rights Act of 1991 includes provisions for monetary damages in cases of intentional discrimination and clarifies provisions regarding 'disparate impact actions' (ie legal cases challenging apparently neutral employers' policies which have a disparate impact on particular groups protected by law).

The Equal Employment Opportunity Commission (EEOC) is the main federal agency responsible for promoting equal opportunity in employment. It does so through administrative and judicial enforcement of the federal civil rights laws and through education and technical assistance. The EEOC also contracts with approximately 90 state and local fair employment practices agencies to process discrimination charges. These charges raise claims under state and local laws prohibiting employment discrimination as well as the federal laws enforced by the EEOC.

Individuals who believe that they have been discriminated against in employment first file charges with the EEOC. The EEOC may also initiate charges against employers that it believes have violated civil rights laws. If the EEOC determines that there is reasonable cause to believe that discrimination has occurred, it will first attempt to reach a voluntary resolution between the parties. If a voluntary resolution cannot be reached, the EEOC may bring suit in federal court. Individuals who have exhausted their administrative remedies also may file suit in federal court.

The number of charges of discrimination filed with the EEOC rose from 77,444 to 79,896 between 1999 and 2000, although this number remained lower than its peak of 91,189 in 1994. The EEOC filed 327 suits against employers in 2000, as compared with 465 filed in 1999. The vast majority of suits the EEOC filed were filed under Title VII of the 1964 Civil Rights Act.

During the fiscal year 2000, the EEOC succeeded in obtaining USD 293.2 million (EUR 317 million) in total monetary benefits for private sector charging parties, including a record-breaking USD 245.7 million (EUR 266 million) through administrative enforcement (pre-litigation). It obtained several major litigation victories and settlements in a wide variety of professional fields and addressing discrimination against vulnerable recent-immigrant communities, women in non-traditional jobs, people with disabilities, older workers and minority individuals in various job categories. Again, the bulk of the monetary benefits was for claims under Title VII.

In federal courts, some significant developments in equal opportunity law came about in 2000. One of the most important was Reeves v Sanderson Plumbing Products, (530 US 133 (2000)), in which the Supreme Court held that a jury may infer that an employer has violated the ADEA even if the plaintiff presents no direct evidence of age discrimination. In the Reeves case, the employee gave the jury substantial evidence from which it could conclude that his employer's explanation for firing him was false. The Court held that this was enough for a finding of age discrimination. Also, in Kimel v Florida Board of Regents (520 US 62 (2000)), the Supreme Court held that state employees are not protected by the ADEA because states have not consented to being sued under this statute. Thus, only private employers may be sued for violations of the ADEA.

New forms of work

The most recent US government report on 'contingent work', otherwise known as temporary work, and alternative work arrangements was published in 1999. At the time, the proportion of US workers holding contingent jobs was unchanged between 1997 and 1999. Defining contingent workers as 'workers who do not expect their jobs to last', the Bureau of Labor Statistics found that there were approximately 5.6 million contingent workers in 1999. Those workers were more than twice as likely as non-contingent workers to be under the age of 25. The majority of those contingent workers under 25 were students. Slightly more than half (51%) of contingent workers were female, whereas 47% of non-contingent workers were female.

Workers with alternative work arrangements include independent contractors, individuals working on-call, individuals working for temporary help agencies, and individuals working for contract firms. In 1999, there were 8.2 million workers (6.3% of the total employed) who identified themselves as independent contractors, 2.0 million (1.5%) who worked on-call, 1.2 million (0.9%) who worked for temporary help agencies, and 769,000 (0.6%) who worked for contract firms. From 1997 to 1999, the number of independent contractors declined, but the number of workers in the other alternative work arrangements rose.

Outlook

The Supreme Court is planning to address a number of issues in industrial relations in 2001. The Court is to take up cases on whether mandatory arbitration clauses are enforceable in employment contracts, whether state employers may be sued under Titles I and II of the ADA, and whether registered nurses are considered supervisory employees for purposes of being included in the same bargaining unit as other supervisory employees.

Selene Ko, US Department of Labor

Additional information on collective bargaining developments

As mentioned above, there is no systematic means of tracking collective agreements in the USA, and it is thus difficult to estimate the number of agreements concluded or to provide a detailed overview of their contents. However, below we provide some illustrative examples of the contents of 1999 and 2000 collective agreements. This material does not emanate from the US Department of Labor, which bears no responsibility for it, but has been collected and inserted by the report's editor.

Pay

There are no overall data available with regard to the pay increases provided for by collective agreements. The following are examples of pay agreements for 2000:

• the four-year agreements concluded at the 'big three' motor manufacturers (DaimlerChrysler, Ford and General Motors) by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) in autumn 1999 provided for a 3% pay increases in 2000 (and in each of the other three years), plus a lump-sum payment, various bonuses and cost-of-living guarantees;
• an exception to the general rule of local and company agreements is the 'master contract' between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX), covering some 50,000 dockers in Atlantic and Gulf Coast ports. In summer 2000, the contract was extended for three years. The pay increase provided for 2000 was a rise of USD 1 (EUR 1.08) per hour to USD 25 (EUR 27.1) per hour (ie around 4%);
• a three-year agreement reached by the Communication Workers of America (CWA) for about 72,000 workers at the Verizon telecommunications group in September 2000 (following a strike) provided for a 4% immediate pay increase (12.5% over three years); and
• a five-year agreement for US Airways flight attendants, concluded in March 2000 by the company and the Association of Flight Attendants (AFA) provided for an immediate 5% pay increase, plus a 5% 'signing bonus' (followed by further 2% increases after 18 months, 30 months and 42 months).

Job security

Job security is a major issue in US collective bargaining. According to an annual survey of employers' bargaining objectives carried out by the Bureau of National Affairs (BNA) prior to the 2001 bargaining round, 92% of current collective agreements contained provisions designed to enhance workers' employment security (eg extended 'recall rights', subcontracting restrictions, or advance notice of shutdowns). Some 16% of the surveyed employers said that they would try to scale back or abolish these employment safeguards in their next agreements, but nearly as many (15%) were considering establishing new job security provisions.

Notable examples of recent collective agreed provisions in this area are the big three motor manufacturers, where management and UAW agreed new job security programmes in the four-year deals reached in 1999, adding to existing provisions. According to UAW, the new programmes have 'far stronger job protection features' as they require 'new employees to be hired as attrition replacements when employment declines to unacceptably low levels and the available pool of laid-off [company] workers has been exhausted. Under the old programme, new hire obligations were limited to net outsourcing actions during the term of the agreement. Under the new programme, new hire obligations are not limited to specific causes; they are triggered instead when attrition openings are not back-filled for whatever reason, be it outsourcing, speed-up, insufficient investment in replacement work etc. Moreover, under the new programme the rate at which new employees are hired to fill attrition openings increases in relation to the degree of job loss in a unit. That provides a strong disincentive to outsource work and shrink employment - and, conversely, it encourages the insourcing of work and the preservation of jobs.'

Furthermore, the four-year agreement signed at DaimlerChrysler in 1999 provides for a 'plant closing and sale moratorium', whereby the company states that that it will not close, partially or wholly sell, spin off, split off, consolidate, or otherwise dispose of in any form, any plant, asset, or business unit of any type, constituting a bargaining unit under the agreement.

To take an example from another sector, according to CWA, the three-year Verizon agreement reached in 2000 includes company guarantees on no lay-offs, no downgrading and no forced transfer of workers. It also reduces the amount of work that is subcontracted and ensures that union members will perform all installation and maintenance work involving high-speed internet digital access lines restores substantial amounts of work that had been contracted out or performed by a lower-wage subsidiary company.

Training and skills development

Training is an issue in collective bargaining, at least in some larger firms. To return once again to the example of the influential agreements at the major motor manufacturers, the current agreement at GM enhances the range of training opportunities provided by an existing UAW-GM Center for Human Resources, which serve the current and future needs of UAW-represented workers. The agreement also provides for: increased tuition assistance for union members, their dependents, and retirees; and greater union involvement in the design and review of all training programmes directed at UAW members. The DaimlerChrysler agreement include a commitment to indenture 1,200 new apprentices during the term of the agreement, plus improved protection and benefits for apprentices. Furthermore, the UAW-DaimlerChrysler National Training Center is to offer greater learning opportunities for union members, spouses, children, and retirees.

Equal opportunities and diversity issues

Legislation plays the key role in guaranteeing equal opportunities at work (see above). However, equality issues do feature in collective bargaining. For example, in the area of equal pay for women and men, AFL-CIO reports that unions have used a number of strategies to achieve 'pay equity increases' at the negotiating table, including bargaining for: pay upgrades for lower-paid classifications; reclassifications; upgrades for female-dominated job classifications; and pay equity studies with phased-in pay adjustments.

Taking once again the example of the major auto companies, the 1999 Ford-UAW agreement, established a 'national joint diversity committee', responsible for the development and implementation of a training programme to increase employee awareness of diversity and promote constructive dialogue, covering topics such as sexual harassment and 'equal application' issues. Similarly, the 1999 DaimlerChrysler-UAW agreement established a joint study team to develop, implement, monitor, and evaluate a diversity training programme for all employees. It also provided for a new procedure for investigating sexual harassment complaints, and various childcare and 'eldercare' initiatives. At GM, the company and UAW agreed to work together at national and local levels to develop and deliver diversity training. The company agreed to add the terms 'disability and sexual orientation' to its policy on equal opportunity and anti-discrimination (which previously covered age, race, color, sex, religion and national origin). An existing joint 'national equal application committee', responsible for training, monitoring and evaluation, will be expanded, and 'equal application' training will be included in the orientation programme for new recruits.

Mark Carley, SPIRE Associates