CARRIERS’ SUBMISSION No. 1
BEFORE EMERGENCY BOARD No. 243
Between
The Railroads Represented
By The National Carriers’ Conference Committee
And Their Employees
Represented By
American Train Dispatchers Association,
International Association of Machinists and Aerospace Workers,
International Brotherhood of Electrical Workers,
Transportation Communications International Union,
Transport Workers Union,
And
The Rail Labor Bargaining Coalition.
National Mediation Board Case Nos. A-13569; A-13570;
A-13572; A-13573; A-13574; A-13575; A-13592
CARRIERS’ SUBMISSION No. 1:
SUMMARY OF POSITION
October 10, 2011
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TABLE OF CONTENTS
Page
INTRODUCTION ............................................................................................................ 1
ARGUMENT .................................................................................................................... 5
I. The Carriers’ Proposal is Based on a Pattern Agreement ............................ 5
A. The Pattern Principle .......................................................................... 5
B. The UTU Pattern Agreement Should Be Followed .......................... 7
C. The Coalitions’ Arguments Against the Pattern Are
Unpersuasive .................................................................................... 9
II. The Carriers’ Proposal Equals or Exceeds Applicable Benchmarks....... 12
A. The General Labor Market .............................................................. 12
B. Comparison to Recent Union Settlements ....................................... 15
C. Comparison to Transportation Industry Settlements.................... 16
D. Comparison to Cost of Living Increases ......................................... 17
III. The Carriers’ Proposal Maintains the Employees’ Preferred
Position ......................................................................................................... 18
IV. The Coalition Unions’ Proposals Are Not Justified by Recent
Railroad Profitability ................................................................................... 23
V. The Coalitions’ Proposals Are Not Justified by Changes in Railroad
Productivity .................................................................................................... 29
CONCLUSION ............................................................................................................... 32
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INTRODUCTION
On April 21, 2011, the freight rail carriers represented by the National Carriers’
Conference Committee (“NCCC”) reached a voluntary agreement with the largest single
railroad employee union, the United Transportation Union (“UTU”), on a package of
wage and benefit changes. 1 This Agreement, which was ratified by the UTU
membership on September 2, 2011, provides a significant increase in total employee
compensation, including a 17 percent wage increase over six years. The UTU leadership
has described the new agreement as follows:
In an economic environment that has our brothers and sisters in other
industries in a vice grip of difficult times, our agreement delivers more than
just a 17 percent wage increase, a 6½-year cap on health care insurance
premiums, certification pay, a faster process for new hires to reach full-pay
rates and no work-rules give-backs. The 17 percent wage increase is
significantly higher than the rate of price inflation – giving you a greater
boost in purchasing power than any other national contract in the past 40
years.
http://utu.org/2011/07/25/national-rail-contract-delivers-more-now/ (App. A-14).
1
The participating railroads include six Class I carriers, which together employ more than
90% of the employees at issue: BNSF Railway Company (“BNSF”), CSX Transportation, Inc.
(“CSXT”), The Kansas City Southern Railway Company (“KCSR”), Norfolk Southern Railway
Company (“Norfolk Southern”), Soo Line Railroad (“Soo”), and Union Pacific Railroad
Company (“Union Pacific”). The additional participating railroads are: Alton & Southern
Railway Company, The Belt Railway Company of Chicago, Brownsville and Matamoros Bridge
Company, Central California Traction Company, Columbia & Cowlitz, Consolidated Rail
Corporation, Gary Railway Company, Indiana Harbor Belt Railroad Company, Kansas City
Terminal Railroad Company, Longview Switching Company, Los Angeles Junction Railway
Company, New Orleans Public Belt Railroad, Norfolk & Portsmouth Belt Line Railroad
Company, Northeast Illinois Regional Commuter Railroad Corporation, Oakland Terminal
Railway, Port Terminal Railroad Association, Portland Terminal Railroad Company, South
Carolina Public Railways, Terminal Railroad Association of St. Louis, Texas City Terminal
Railway, Union Pacific Fruit Express, Western Fruit Express Company, Wichita Terminal
Association, and Winston-Salem Southbound Railway Company (collectively “Carriers”).
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In other words, the new UTU Agreement represents an extremely generous
settlement, providing total compensation increases in excess of what most other
employees in the United States (unionized or not) have received in recent years. In a
world in which many employees are subject to a wage freeze – if not wage cuts – as well
as substantial increases in health care cost-sharing, the railroad employees represented by
the UTU have a settlement that ensures that they will remain among the most wellcompensated workers in America.
It is also worth emphasizing that the UTU Agreement reflects an important quid
pro quo: above-market general wage increases (“GWIs”) in exchange for changes in the
national health care plan that covers employees represented by UTU. These changes start
to bring the plan – currently one of the richest in the nation – closer to the current
mainstream of employer health plans.
The Carriers respectfully urge this Emergency Board to recommend a similar
settlement for all of the disputes with employees represented by the remaining rail
unions. 2 More specifically, the Carriers’ proposed total compensation package includes
the following main elements:
2
The unions participating in this proceeding include: Brotherhood of Maintenance of Way
Employes Division (“BMWED”), Brotherhood of Locomotive Engineers & Trainmen
(“BLET”), Brotherhood of Railway Carmen (“BRC”), International Association of Machinists
and Aerospace Workers (“IAM”), Brotherhood of Railroad Signalmen (“BRS”), Transportation
Communications International Union (“TCU”), Transport Workers Union (“TWU”),
International Brotherhood of Electrical Workers (“IBEW”), National Conference of Firemen and
Oilers (“NCFO”), Yardmasters Department – Div. of UTU (“YDM”), American Train
Dispatchers Association (“ATDA”), Sheet Metal Workers’ International Association
(“SMWIA”), and International Brotherhood of Boilermakers, Blacksmiths, Iron Ship Builders,
Forgers and Helpers (“IBB”) (collectively “Coalition Unions”).
2
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(1)
Wages:
Total wage increases of 17% over six years, including
2%
2.5%
3%
3%
3.5%
3%
(2)
Extra Compensation:
GWI
GWI
GWI
GWI
GWI
GWI
in 2010
in 2011
in 2012
in 2013
in 2014
in 2015
Additional compensation analogous to special
elements of compensation under the UTU pattern,
including:
Equivalent entry rate changes (or lump sums)
Special wage adjustment equal to 0.5% GWI (for
certification pay)
(3)
Health Care:
A continued freeze on employee contribution rates,
plus a limited set of plan design changes that will start
to bring the railroad health care plan into closer
alignment with most other employer plans.
(4)
Work Rules:
No work rule changes. 3
In the sections below, we summarize the main reasons why the Board should
recommend this proposal. In Part I, we discuss the pattern principle, and explain why it
is critical that any recommendations stay within the pattern set by the UTU Agreement.
In Part II, we show that that the Carriers’ proposal is better, by all objective measures,
than the vast majority of other recent settlements, and is particularly generous in an era of
high unemployment and economic uncertainty. In Part III, we explain that the Carriers’
3
As explained in the Carriers’ Submission No. 6 (Work Rules), while the UTU pattern
agreement contains no work rule changes, the Carriers are willing to redistribute the components
of the pattern to fund special priorities for individual unions, so long as the total value received
remains equivalent to the pattern.
3
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proposal will maintain the preferred position of railroad employees, who already enjoy
compensation and benefits superior to those of most American workers. These are good,
high value jobs, and will remain so for the life of this agreement.
We then turn to the two main arguments advanced by the Coalitions for a much
richer package. In Part IV, we show that railroad profitability is not a justification for
above-market compensation increases, especially when the Coalitions have never been
and are not now willing to accept any risk of a future decline in profitability. Likewise,
in Part V, we show that increases in railroad productivity over the last few decades do not
justify additional compensation increases, especially when most such productivity
increases are not fairly attributed to increased skill or effort by railroad employees. 4
*
*
*
*
The bottom line here is that the UTU pattern is fair and reasonable, especially
given the current economic climate. Indeed, the total increase in compensation is more
than 20 percent – on top of current above-market wages and benefits – which is more
than fair when so many Americans remain unemployed, or employed in low-wage, nobenefit jobs. There is no compelling reason to depart from the terms of the UTU
Agreement, especially when doing so would effectively punish the largest rail labor
union for having the fortitude and foresight to negotiate and ratify a voluntary settlement
in this round of national collective bargaining.
4
A number of these arguments are discussed in more detail in the Carriers’ expert reports
and issue-specific submissions. In addition to this Summary, the Carriers’ submissions include
(1) History and Context of the Dispute, (2) Total Compensation, (3) Wages, (4) Health Care Plan
Design, (5) Work Rules, and (6) Miscellaneous Compensation Issues.
4
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ARGUMENT
The Board should recommend a settlement that adheres to the pattern set by the
new UTU Agreement. There are three main reasons why this is so. The two contrary
arguments offered by the Coalition Unions are unconvincing.
I.
THE CARRIERS’ PROPOSAL IS BASED ON A PATTERN AGREEMENT.
A.
The Pattern Principle
Since 1937 – when national wage and rules movements first began – presidential
emergency boards have relied on the pattern principle as one of the most important
guides for crafting recommendations to settle rail labor disputes. 5 In essence, the pattern
principle provides that once a union and the multi-carrier group reach agreement, the
terms of that agreement should, absent compelling circumstances, set the parameters for
agreements with the non-settling unions.
Indeed, following a pattern is critical to the long-term stability of railroad industry
labor relations. See Report of Emergency Board No. 242 (Dec. 30, 2007) at 14-15. This
is so for several reasons:
5
See Report of Emergency Board No. 131 (May 23, 1960) at 8 (“[I]t is an inescapable fact
that pattern settlements, despite sporadic deviations, have been characteristic of the industry for
many years, so much so that any deviation from an established pattern during a current wage
movement would be likely to have serious repercussions.”); see also, e.g., Report of Emergency
Board No. 231 (July 18, 1996) at 7; Report of Emergency Board No. 220 (Mar. 31, 1992) at 6;
Report of Emergency Board No. 211 (July 15, 1986) at 11; Report of Emergency Board No. 195
(July 21, 1982) at 4-5; Report of Emergency Board No. 187 (Sept. 2, 1975) at 15-16; Report of
Emergency Board No. 186 (Apr. 16, 1975) at 8-9; Report of Emergency Board No. 181 (Mar.
31, 1972) at 8-9; Report of Emergency Board No. 174 (Jan. 13, 1969) at 5; Report of Emergency
Board No. 169 (Jan. 28, 1967) at 6; Report of Emergency Board No. 157 (Nov. 9, 1963) at 1112; Report of Emergency Board No. 137 (May 19, 1961) at 12; Report of Emergency Board No.
116 (Dec. 22, 1956) at 13; Report of Emergency Board No. 114 (Nov. 7, 1955) at 22.
5
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(1)
Under the Railway Labor Act (“RLA”), representation is on a craft-by-
craft basis. This has led to a high degree of fragmentation in union representation, with a
total of 13 organizations. Rivalries among these organizations directly impact labor
relations – no union wants to be outdone by its peers. See Report of Emergency Board
No. 220 (May 28, 1992) at 6 (“[C]ompetition between and among unions for supremacy
of benefits, with its ineluctably destabilizing consequences, is damaging to the public
interest.”).
(2)
Likewise, employees in the various crafts all work together, side-by-side,
and so are bound to compare their wages and other benefits. Morale and cooperation –
and therefore carrier operations – suffer when one group edges ahead (or lags behind).
See Report of Emergency Board No. 169 (Jan. 28, 1967) at 6 (departure from the pattern
“would probably nurture employee dissatisfaction and catch-up demands, and hamper
collective bargaining and the negotiation of future contracts.”); Report of Emergency
Board No. 231 (Aug. 16, 1996) at 8 (same).
(3)
Failure to follow a pattern would discourage early settlements. In fact, it
encourages each organization to wait, hoping to better the gains achieved by the others.
It would also lead to leap-frog bargaining between rounds, as any union that fell behind
in one round attempts to outdo the others in the next. The end result would be a
destabilizing spiral, undermining national bargaining itself. See Report of Emergency
Board No. 186 (Apr. 16, 1975) at 8-9 (“To revert back to the days of continual crisis
bargaining between the Carriers and thirteen or more unions, each seeking to piggy-back
and improve upon the gains made by the others, is unthinkable.”).
6
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(4)
Any such destabilization of national bargaining would be directly contrary
to the public interest. The chief purpose of the RLA is to avoid strikes and other
disruptions to commerce. See 45 U.S.C. § 151a. National handling has been remarkably
successful in achieving that purpose. Over the last 30 years, there have been only three
brief strikes resulting from nationally handled disputes.
Thus, in short, departures from a pattern are inherently “destructive of the broader
system of collective bargaining.” Report of Emergency Board No. 176 (Nov. 2, 1969) at
8. See also Report of Emergency Board No. 194 (Aug. 19, 1982) at 4-5 (following a
pattern is necessary “if stability of labor-management relations is to be preserved in this
industry.”). As we now show, these principles are fully applicable here.
B.
The UTU Pattern Agreement Should Be Followed
In this case, a clear pattern was set by the Carriers’ recent settlement with the
UTU, the largest single rail labor union. The UTU Agreement was reached through
extensive, arms-length negotiations over a period of more than 16 months. It was
unanimously endorsed by the UTU General Chairmen. 6 More importantly, the UTU
Agreement was overwhelmingly supported by the membership, with a total of 60 percent
voting to ratify the new agreement.
6
A copy of the full agreement is provided as Carriers’ Exhibit 1. The UTU has been
vocal in describing this agreement as one of the best in its history. For example, the UTU’s
website quotes National Legislative Director James Stem as stating “This is a very good
agreement, regardless of economic conditions; but it is especially good given its increase over
price inflation. . . . [it] provides significant financial improvement and economic stability for our
families.” http://utu.org/2011/08/16/negotiators-speak-out-on-national-rail-contract/ (App. A15).
7
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The main UTU settlement was followed by a similar agreement with the
Yardmasters. The Yardmasters’ Agreement matches the wage and plan design changes
of the UTU Agreement. It also provides an extra wage increase of 12.5 cents per hour.
This amount was negotiated to reflect comparable value for the certification pay element
of the UTU Agreement, and to resolve all of the Yardmasters’ other “work rule”
demands. See Carriers’ Ex. 2 (Yardmasters Agreement). The Yardmasters’ Agreement
was also ratified by a wide margin.
The UTU agreements set a pattern for the other unions. All of the policy rationales
of the pattern principle are fully applicable here. If the other unions obtain more from
this Board than UTU negotiated in a voluntary settlement, it would undermine the UTU
leadership’s credibility with its members, fracture working relationships among
employees, and incentivize the UTU to hold out for a “leapfrog” agreement in the next
round. More importantly, it would send the message to all of rail labor that there is no
percentage in reaching a voluntary settlement – far better to wait until some other Union
takes the plunge, and then seek to one-up it.
Indeed, if anything, the UTU pattern should set a ceiling, not a floor. Unless the
pattern is the very best that the non-settling unions could do – with some chance that they
could do worse – there would always be an incentive for hold-out Unions to try their luck
at an emergency board. There would be no reason not to roll the dice. This would
undermine voluntary negotiation and mediation, and encourage resort to the emergency
board process in every round of national handling, along with the concomitant increased
risk of strikes and other disruptions to commerce.
8
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C.
The Coalitions’ Arguments Against the Pattern Are Unpersuasive
To be sure, the Coalition Unions reject the idea that the UTU Agreement sets a
pattern in this round. They apparently recognize that the existence of a pattern would be
fatal to their position, and so offer various theories as to why the UTU Agreement should
be ignored. None of those arguments have merit.
First, the Coalitions have argued that the UTU is only one union, and that a single
union agreement cannot set a pattern. 7 That is not correct. It is in fact well-settled that a
single union agreement can and often does set a pattern, especially when the union in
question is as large and significant as the UTU. For example, PEB No. 159 faced a
dispute involving just one non-operating union, the BRS, at a time when similar disputes
were pending with ten other unions. See Report of Emergency Board No. 159 (Apr. 3,
1964) at 7. In crafting its recommendations, the Board noted that its recommendations
would set a pattern for the other unions:
An increase in the wages of any craft or class of railroad labor may have an
important effect on the wage settlements made with other railway labor
organizations. The persistent demand for uniformity of wage adjustments
on the part of both operating and non-operating employees is one of the
realities which this Board cannot ignore.
Id. at 23. That prediction proved correct – the three emergency boards appointed several
months later all based their recommendations on the BRS pattern established by PEB No.
159. See Report of Emergency Board No. 161 (Aug. 18, 1964) at 7; Report of
7
The Coalitions’ argument ignores the fact that the Carriers have also reached agreement
with the Yardmasters. The Yardmasters are, of course, affiliated with the UTU, but they have
craft autonomy and had their own unique demands, which were separately negotiated with the
Carriers.
9
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Emergency Board No. 162 (Oct. 20, 1964) at 7; Report of Emergency Board No. 163
(Aug. 18, 1964) at 7. The same has been true in other rounds as well. See, e.g., Report of
Emergency Board No. 221 (May 28, 1992) at 11 (single non-operating craft agreement
set pattern for all other non-operating crafts).
Second, the Coalitions have made the related point that the UTU represents less
than a majority of all railroad employees. 8 They argue that a pattern does not exist unless
at least 50 percent of the industry has signed on. Again, that is not correct. A pattern
can be set by substantially less than 50 percent of the workforce. PEB No. 114, for
example, recommended wage increases based on a pattern set by the operating crafts,
which at the time were about 30 percent of the industry. See Report of Emergency Board
No. 114 (Nov. 7, 1955) at 22. Thus, a single agreement covering less than a majority
can easily set a pattern, especially where, as here, “a large and important Organization
took the lead” in reaching agreement with the carriers. Report of Emergency Board No.
228 (May 8, 1996) at 11–12.
Third, the Coalitions argue that the UTU Agreement should be discounted because
it is an operating employee agreement, whereas most of the Coalition members are nonoperating employees. But PEBs have never balked at applying operating employee
patterns to non-operating employees, or vice versa. See, e.g., Report of Emergency
Board No. 114 (Nov. 7, 1955) at 22 (applying operating employee pattern); Report of
8
The Coalitions consistently understate the percentage of employees represented by UTU,
claiming that it is somewhere between 20 and 25 percent. In fact, the UTU (including
Yardmasters) represents more than 39,000 employees, accounting for approximately 30 percent
of the entire unionized workforce in national bargaining.
10
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Emergency Board No. 228 (May 8, 1996) at 11–12 (same). That is especially true where,
as here, all of the core issues are common to all of the unions, and the elements of value
obtained in the pattern agreement can be translated to value for the remaining unions.
Unlike in past rounds, there are no unique items in the pattern – it is all just compensation
and health care plan design.
Fourth, the Coalitions assert that plan design changes to the UTU health care plan
cannot set a pattern because the other Unions are party to a separate health care plan. We
address this argument in detail in the Carriers’ Submission 5: Health Care Plan Design.
The short and sufficient answer is that the plans are identical in all material respects, and
their experience is combined for purposes of setting the rate at which the Carriers fund
plan costs. Thus, it makes perfect sense to apply changes to both plans.
Finally, the Coalitions assert that even if there is a pattern, the Board should depart
from it and order a richer package in light of recent carrier profits and various other
factors. But deviations from a pattern may be justified only by “special [and] compelling
circumstances.” Report of Emergency Board No. 220 (May 28, 1992) at 6. None of the
factors identified by the Coalitions satisfy their burden to show “special” and
“compelling” circumstances. To the contrary, all of the arguments they identify – such as
profitability, inflation, and the like – necessarily apply to all crafts equally, including the
UTU, and so do not justify any deviation from the pattern.
*
*
*
*
Thus, for all of these reasons, the Board should recommend a settlement based on
the UTU pattern agreement.
11
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II.
THE CARRIERS’ PROPOSAL EQUALS OR EXCEEDS APPLICABLE BENCHMARKS.
Beyond the policy considerations that support the pattern principle, the Carriers’
proposal should be adopted here because it is fair and reasonable – and in fact quite
generous – when measured against external benchmarks. Not only does the proposed
total compensation increase exceed projected increases in cost of living by a wide
margin, it is richer than the vast majority of collective bargaining agreements negotiated
in other industries over the last 2 ½ years.
In order to compare compensation increases under the Carriers’ proposal to the
rest of American industry, we start from the premise that the proper measuring stick is
total compensation. See Carriers’ Submission No. 3 (Total Compensation) at 5-7. Under
the Carriers’ proposal, the projected total increase – including the overall value of wages,
health care benefits, and the special wage adjustment equivalent of certification pay, but
excluding various other increases, such as lump sums, FELA payments, and retirement
benefits – is 20.8 percent over six years. That increase is better than any comparator,
including the overall labor market, the union labor market, the transportation sector, and
cost of living.
A.
The General Labor Market
The most appropriate comparator for the Carriers’ proposal is the aggregate
American workforce, including both union and non-union workers. The labor market in
which the Carriers compete for talent is not limited to the unionized segment, and so it
makes no sense to limit compensation comparisons to just unionized employers. See
Carriers' Ex. 3 (Report of Dr. Murphy) at 16, 27.
12
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The UTU pattern substantially exceeds recent and projected compensation
increases in the general labor market. In 2010, average compensation for all employees
on private sector payrolls increased by 1.11 percent, far less than the average 3.47 percent
increase under the Carriers’ proposal. See Bureau of Labor Statistics (“BLS”) Employer
Cost for Employee Compensation (App. A-6) at 111. The same is also true if we
measure the proposed increases against comparable industries. Compensation for
employees in the transportation sector grew an average of just 2.23 percent in 2010, again
far less than the yearly increases under the Carriers’ proposal. See id. at 538 (Table 19).
Likewise, the Carriers’ proposed increases exceed projected growth in the Employment
Cost Index through 2015 by 5.33 percent. See Carriers’ Ex. 6 (Report of Dr. Evans) at 33
(referring to Congressional Budget Office projections).
Furthermore, these data – while compelling – do not fully capture just how
generous the Carriers’ proposal is in the current economic climate. There is a stark
contrast between how railroad employees will fare under the UTU pattern and the current
plight of many American workers. Economic growth has stagnated. See Carriers’ Ex. 6
(Report of Dr. Evans) at 35 (citing Federal Reserve statements). In particular, there is no
denying that the overall job market is truly dismal. By some accounts, more than 25
million people are unemployed or underemployed. See BLS Employment Report –
August 2011 (App. A-7). According to recent government figures, unemployment is
running at over 9 percent, and has topped 8 percent for more than 30 months, the longest
streak since the 1930s. Id. Other estimates put the true rate of unemployment above 12
percent or even higher:
13
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Moreover, projected unemployment rates are not encouraging, indicating that high
unemployment will continue to suppress compensation growth for the foreseeable future.
See Carriers’ Ex. 6 (Report of Dr. Evans) at 32, 36-39.
Even among those who have kept their jobs, the prospects for many remain grim.
Hundreds of thousands of employees – including essentially all federal government
employees – have suffered wage cuts or wage freezes. See Peter Baker and Jackie
Calmes, “Amid Deficit Fears, Obama Freezes Pay,” New York Times (Nov. 29, 2010)
(App. A-16). “To an extent rarely seen in recessions since the Great Depression, wages
for a swath of the labor force this time have taken a sharp and swift fall.” Sudeep Reddy,
“Downturn’s Ugly Trademark: Steep, Lasting Drop in Wages,” The Wall Street Journal
(Jan. 11, 2011) (App. A-23).
14
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In addition, employees are increasingly being asked to pick up a larger share of
spiraling health care costs. “Health-care reform doesn’t change the fact that costs are
going up, and cost-shifting is going to continue to occur between the employer's portion
of the cost and the individual’s portion of costs.” See Karen Pallarito, “Health Care
Reform: Employees Face Greater Cost-Sharing,” U.S. News & World Rep. (Sept. 9,
2010) at 1 (App. A-12); see also N.C. Aizenman, “Health Care Costs Shifted to Workers
as Premiums Surge,” Wash. Post (Sept. 27, 2011) (App. A-13).
Given these economic conditions, the Coalition Unions’ vehement objections to an
almost 21 percent increase in total compensation are hard to understand, to say the least.
In a climate in which so many of their fellow Americans are suffering, the Coalition
Unions seem disconnected at best – and avaricious at worst – when they turn up their
noses at such an enormous increase in compensation. Assessed against the broader
economic context, the Carriers’ proposal is extremely fair, even generous.
B.
Comparison to Recent Union Settlements
Even if we limit the comparison to wage growth in unionized private industry, as
the Coalitions would prefer, the Carriers’ proposal still comes out ahead:
Average Annual GWI: Large Private Industry
Settlements Since January 1, 2010
2.00%
Weighted Average
1.82%
UTU Pattern Agreement
3.04%
15
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A list of 2010-11 private industry settlements covering at least 1,000 employees is
provided in Table A.1 contained in Attachment A. 9 Thus, the Carriers’ proposed
annual wage increase is more than a full percentage point higher than the average
negotiated by unions throughout the economy, and higher than the annual increase in
84.62 percent of other settlements.
C.
Comparison to Transportation Industry Settlements
The same holds true even if we further narrow the comparison to wage growth
under recent union settlements in the transportation industry. Indeed, when compared to
recent settlements in this sector, the UTU pattern is even higher above the norm:
Average Annual GWI: Transportation Sector
Settlements Since January 1, 2010
1.70%
Weighted Average
2.01%
UTU Pattern Agreement
3.04%
A list of the 2010-11 transportation industry settlements covering at least 600 employees
is provided in Table A.2 contained in Attachment A.
Of course, the Coalition Unions have pointed to a few selected agreements that,
they contend, provide higher compensation increases than the UTU pattern. For
example, they have relied on the Amtrak and Massachusetts Bay Commuter Railroad
9
This analysis relies on a comparison of general wage increases rather than total
compensation because, for the most part, reported summaries of labor agreements only reflect
changes in wages.
16
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(“MBCR”) settlements. Those settlements are hardly good comparators. Both Amtrak
and the MBCR are government-funded, public sector employers, and so are not subject to
the financial discipline imposed by the competitive market. Moreover, MBCR operates
in an urban, high-wage area, whereas many Class I railroad employees live in lowerwage rural areas. For these reasons, prior PEBs have rejected attempts to link freight rail
wage rates to urban transit wage rates. See Report of Emergency Board No. 219 (Jan,.
15, 1991) at 61-62; Report of Emergency Board No. 221 (May 28, 1992) at 10, 12.
Moreover, because the freight railroads generally set the pattern for Amtrak, it is
reasonable to presume that the unions made that deal in order to avoid the anticipated
freight pattern. Thus, it is especially odd to point to Amtrak as a basis for a freight
railroad settlement.
D.
Comparison to Cost of Living Increases
The Coalition Unions have also made the remarkable – and unsupported – claim
that the UTU pattern does not even allow employees to keep up with increases in the cost
of living. From 2010 through 2015, the Congressional Budget Office projects inflation
(as measured in terms of the Consumer Price Index) at 9.1 percent. See Carriers’ Ex. 6
(Report of Dr. Evans) at 33. That is less than half the increase in compounded GWIs
provided under the pattern. As a result, over the course of the wage increases provided in
the UTU Agreement, employees will enjoy real wage growth totaling 9.14 percent. Id.
This continues past trends – just since 2001, Coalition employees have seen wage growth
of 30.5 percent versus a 23.1 percent increase in the CPI, resulting in real wage growth
over the last ten years of 7.4 percent. Id. at 31.
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III.
THE CARRIERS’ PROPOSAL MAINTAINS THE EMPLOYEES’ PREFERRED
POSITION.
The above-market increase proposed by the Carriers will perpetuate the advantage
in total compensation that Coalition employees already have over their peers. The
baseline for rail employees’ compensation – before any of the Carriers’ proposed
increases – is already among the highest in the country. Railroad industry employees
receive higher total compensation than employees in 82 percent of other industries. See
Carriers’ Ex. 6 (Report of Dr. Evans) at 22.
Indeed, even before any increases in this round, Coalition employees were already
better compensated than virtually any peer group:
Average Hourly Total Compensation Comparison (2010)
All
Unionized Coalition
Private Transportation
Private
Union
Industry
Industry
Industry Employees
Total Compensation
$31.86
$26.00
$37.44
$46.58
Wages and Salaries
$22.11
$17.34
$22.98
$26.66
Total Benefits
$9.75
$8.66
$14.46
$19.92
Paid Leave
$2.35
$1.59
$2.76
$6.34
Overtime Pay
$0.95
$0.77
$1.10
$0.96
Health and Life Insurance
$2.71
$2.64
$4.80
$6.27
Pensions (Including RRA)
$1.22
$1.19
$2.63
$6.09
Legally Required Benefits
$2.52
$2.48
$3.18
$0.26
See Carriers’ Exhibit 4 (Report of Dr. Fay) at 7, 95 (explaining that “legally required”
benefits include Social Security, Medicare, unemployment insurance, and workers
compensation for comparator groups). Thus, Coalition employees enjoy a substantial
compensation premium, even over other unionized employees:
18
C0000549
Total Compensation Premium of Carrier Employees (2010)
Premium
Over
Premium
Unionized
as
Workers Percentage
Unionized
Private
Industry
Carrier
Employees
Total Compensation
$37.44
$46.58
$9.14
24.4%
Wages and Salaries
$22.98
$26.66
$3.68
16.0%
Total Benefits
$14.46
$19.92
$5.46
37.8%
Paid Leave
$2.76
$6.34
$3.58
29.7%
Overtime Pay
$1.10
$0.96
-$0.14
-12.7%
Health and Life Insurance
$4.80
$6.27
$1.47
30.6%
Pensions (Including RRA)
$2.63
$6.09
$3.46
31.6%
Legally Required Benefits
$3.18
$0.26
-$2.92
-91.8%
Id. at 10. This premium is even higher when Coalition employees are compared to
others in the same sector. See Carriers’ Ex. 6 (Report of Dr. Evans) at 20 (showing a
total compensation premium of 79 percent over other transportation workers).
Moreover, in addition to the highly competitive compensation, railroad jobs are
becoming increasingly safer and easier in many respects. Employees have better access
to technology, better working conditions, better communications, and better quality of
life. Safety, in particular, has never been better in the railroad industry than it is now.
See Carriers’ Ex. 7 (Report of Dr. Gallamore and Mr. Gray) at 46. Workers in the rail
industry have lower injury rates than most other major industries, including trucks, inland
water transportation, airlines, agriculture, mining, manufacturing, construction, and even
grocery stores:
19
C0000550
Rail Accident & Injury Rates Have Plunged
RRs Are Safer Than Most Other Industries
12
(Injuries Per 200,000 Employee-Hours)
7
10
Injuries Per 200,000
Rail Employee-Hours:
Down 82% 1980-2010
8
5
4
6
3
4
2
Air
Transp.
6
Train Accidents Per
Million Train-Miles:
Down 77% 1980-2010
2
Constr.
All
Private
Industry
Manuf.
Inland
water
Mining
Grocery
stores
Agric.
Trucks
RRs
1
0
0
'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10
Data are 2009.
2010 is preliminary. Source: FRA
Source: U.S. Bureau of Labor Statistics
See http://www.aar.org/~/media/aar/Background-Papers/RR-Moving-US-Safely.ashx
(App. A-5).
Proof that railroad employees are starting from a highly preferred position is found
in behavior of job-seekers in the labor market. As the Carriers’ data show, there is
intense competition for virtually every available railroad job:
Number of Applicants per Hire 2006-2010,
Norfolk Southern and Union Pacific
180
160
Applicants per Hire
140
120
100
80
60
40
20
0
2006
2007
2008
2009-2010
Year
Source: Company data from Norfolk Southern and Union Pacific.
20
C0000551
Furthermore, once people obtain a railroad job, they do not leave voluntarily, but
rather have extraordinarily long tenures as compared to individuals in comparable jobs in
other industries:
Carriers’ Ex. 5 (Report of Dr. Topel) at 20. If a railroad employee is involuntarily laid
off due to merger or a similar transaction, he or she may be entitled to very generous job
protection – as much as six years of pay – in the relatively rare circumstance where the
individual is not quickly returned to service. 10 Moreover, most employees who are laid
10
A mosaic of agreements, legislation, and regulatory measures insulate railroad employees
from changes in employment status. These include the Railroad Unemployment Insurance Act,
the Washington Job Protection Agreement of 1936, Surface Transportation Board-imposed
conditions on carrier transactions, and many others. The array of protective benefits for railroad
employees exceeds anything available to virtually any other group of American workers.
21
C0000552
off – even for long periods of time – choose to return to work if given the opportunity.
Id. at 26-27.
The Carriers’ proposed agreement ensures that employees will continue to enjoy
all of the benefits that make these jobs so popular. Moreover, in addition to the abovemarket compensation increases discussed above, the pattern does not require any work
rule changes that might (even arguably) affect quality of life. Employees are not being
asked to work longer hours, learn new skills, take on more responsibility, or assume any
other additional burdens. Railroad workers will continue to do the same work they are
doing now, just at a higher level of real compensation.
Moreover, while the Coalition Unions ignore the continued freeze on employee
contributions and concentrate their complaints on the plan design changes to the MMCP
in-network benefits, the fact is that these changes are quite modest and squarely within
the mainstream of employer plans. The Carriers’ proposal includes:
• An employee co-insurance rate of only 5 percent, which is much more generous
than most plans, with out-of-pocket maximum limits of $1000 per individual and
$2000 per family;
• For larger families – and the plan covers many more dependents than most – the
$2000 maximum is especially generous;
• Unusually low deductibles, at $200 per person and $400 per family;
• Additional preventative services coverage, at no cost to employees, as required by
the recently enacted health care legislation; and
• Modest co-pay increases for more expensive brand name drugs, with reduced copayments for generic drugs, including only $5 for up to a 90 day supply by mail.
22
C0000553
See Carriers’ Submission No. 5 (Health Care Plan Design) at 5-6. In short, employees
will still be entitled to health benefits that are better than what most Americans receive.
Indeed, it is worth emphasizing that railroad jobs are precisely the kind of jobs that
many commentators have identified as the key to renewed American prosperity. These
are not the sort of part-time, low-wage, no-benefit positions that unions and others decry.
And the railroad industry, unlike many other employers, is committed to its long-term
partnership with its unions. In many sectors, unions and union-negotiated compensation
are under intense fire, but here the unions are assured of maintaining and even increasing
the total compensation afforded their members. At the same time, the railroads are
hiring, adding more people to the union rolls. By asking for more – indeed, much more –
the Coalition Unions seem to have lost perspective for the context in which their demands
are made.
IV.
THE COALITION UNIONS’ PROPOSALS ARE NOT JUSTIFIED BY RECENT
RAILROAD PROFITABILITY.
Undaunted by all of the foregoing considerations, the Coalition Unions are asking
for hundreds of millions more in total compensation than UTU-represented employees
will receive. If there is one central theme to the Unions’ case, it is that the Carriers
should pay more than the UTU pattern because railroad operating profits are currently
healthy and increasing. As a corollary to this argument, the Coalitions point to the last
settlement in 2007, arguing that the Carriers paid more at that time than they are offering
now, despite an increase in operating profit since 2007. There are, however, multiple
flaws with the Coalition Unions’ reliance on profitability.
23
C0000554
First, as a matter of labor economics, employer profitability is not and never has
been a consideration in setting appropriate levels of employee compensation. As
explained by Dr. Murphy, compensation is a function of supply and demand for labor in
the relevant market. Profitability, by contrast, is a function of the price of outputs and
the cost of inputs. There is no logical reason why there should be a correlation between
the two. See Carriers’ Ex. 3 (Report of Dr. Murphy) at 17-18.
Second, there is no historic relationship between profitability and compensation in
this industry. Railroad employees have never accepted wage cuts during times of poor
performance, and so there is no reason they should receive above-market increase during
periods of relatively good performance. Indeed, the Coalitions’ argument appears to be a
one-way ratchet: wages go up when profits are high, but do not go down when the
reverse is true. That is not reasonable. As PEB No. 223 explained, “if employees are
expected to take pay cuts in periods of the carrier’s losses, they should expect to share
greater benefits in periods of the carrier’s prosperity. When no pay cuts are requested in
non-profit years, a different result may be justified.” Report of Emergency Board No.
223 (Oct. 20, 1993) at 15.
Third, during bargaining, the Carriers offered to link compensation increases to
financial performance, as they did in some local agreements with the BLET, UTU and
ATDA. Profit-sharing is an increasingly popular concept in union settlements, as recent
automotive manufacturer agreements illustrate. But the Coalition Unions have refused to
even consider that idea. They only want upside, with no downside risk exposure should
Carrier profits begin to falter.
24
C0000555
Fourth, as Arbitration Board No. 559 pointed out, short-term profitability does not
equal a right to wage increases. In that case, the union argued that surging rail
profitability justified compensation increases beyond those negotiated by the parties in an
unratified agreement:
The organization [says] that the justification for greater increase lies in the
record profits reaped by the industry over the last several years, especially
last year. The organization’s witness analyzes the financial reports and the
economic data and advises that the fortunes of the industry have never been
better: net income is at a record high; earnings are up all over; operating
ratios continue to fall; earnings per share are escalating; return on
investment could not be better; etc.
See Award of Arbitration Board No. 559 at 7-8. But the Board firmly rejected that
theory, observing as follows:
We think that before jumping into this thicket, we are better off to step back
and ask ourselves, what will this exercise gain us? We do not think that
“bigness” alone or profits by themselves are persuasive reasons for
recommending wage increases. If that were so, the biggest company in the
country should have the highest wage rates for its employees. But that is
not the case, and it is not the case because it makes no sense. . . . Thus, in
our view, the union’s claim that current profit levels justify greater wage
increases does not fly.
Id. at 8 (emphasis added). 11
Fifth, the Coalitions overstate the railroads’ recent economic strength. There is no
doubt that the industry has done much better in recent years – all railroad employees can
be justifiably proud of better revenues, better profits, better stock prices, and the like.
But for all that, railroads are still not consistently earning their cost of capital. See
11
See also, e.g., Report of Emergency Board No. 228 (May 8, 1996) at 10-12 (better profits
do not trump pattern considerations).
25
C0000556
Carriers’ Ex. 7 (Report of Dr. Gallamore and Mr. Gray) at 1. Indeed, notwithstanding
the Coalitions’ effort to paint a picture of the Carriers’ unwavering financial prosperity,
the Carriers have not been immune to recent financial cycles. This is unsurprising, given
that the broader economy drives demand for goods shipped by rail and affects shipping
prices. From 2008 to 2009, the Carriers’ freight revenue fell by more than 22 percent and
net income fell by approximately 21 percent. Likewise, over the same period, the
Carriers’ return on equity fell by more than 26 percent. Id. at 13, 16, 26. This abrupt
decline in 2008-09 highlights the fragility of the Carriers’ recent gains and the substantial
uncertainty surrounding any predictions of future financial success.
Sixth, in addition to overstating current performance, the Coalitions understate or
ignore the risks for the future:
• The railroads are, of course, sensitive to larger economic trends. Anemic
projected growth in the U.S. and world-wide may have a very serious impact on
railroad profitability in the coming months and years.
• Economic forecasts show that variable costs, such as fuel prices and health care
expenditures, are likely to continue to rise beyond the general rate of inflation and
will have a significant impact on the Carriers.
• Substantial barriers to growth, such as infrastructure limitations, unfunded capital
expenditure requirements (like positive train control), potential greenhouse gas
legislation, and potential government regulation mean that future growth in the
industry is by no means guaranteed.
• The Carriers also face the risk of disruptions in their supply chains for
locomotives, rolling stock, rails, ties, and fuel.
• The seasonality of many products shipped by rail and the related fluctuation in the
demand for shipping creates the potential for alternating periods in which demand
exceeds capacity, causing increased congestion and reduced train velocities.
These issues are exacerbated by the impact of weather-related events. Fluctuating
26
C0000557
demand also increases the costs associated with storage of locomotives, rolling
stock, and other equipment.
Thus, it is clear that the industry continues to face very real risks to future performance. 12
This is especially true when such a large percentage of Carrier revenues must be
invested back into infrastructure in order to maintain the existing physical plant, let alone
grow. Id. Forty cents out of every revenue dollar is reinvested in infrastructure and
equipment. It is this consistent reinvestment of profits that has created the improvement
in financial health that the Coalitions now cite:
Railroad Net Income
vs. Reinvestments* in Their Networks
$22
$10
$21
$9
Reinvestments* (right scale, $ bil)
$20
$8
$7
$19
Class I RRs
$18
$6
Net income (left scale, $ bil)
$5
$17
$16
$4
correlation = 94%
$15
$3
$14
$2
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
*Capital spending plus maintenance expenses minus depreciation.
Data are for Class I railroads. Source: AAR
12
Cautionary tales abound in other industries. Airlines are a prime example. Studies of
airline industry economics reveal that labor costs have swung back and forth as the industry’s
earnings have ebbed and flowed. “[D]uring strong financial periods, labor attempts to extract
some of the profits.” Severin Borenstein and Nancy Rose, “How Airline Markets Work. . . Or Do
They?,” National Bureau of Econ. Research Working Paper (App. A-10) at 42. But because of
the multi-year process of collective bargaining, “wage bill stickiness means that labor cost
changes may [be] out of sync with profit changes, exacerbating the profit swings.” Id. Thus, for
example, when airline industry profit rates grew from 1993 to 2000, labor costs also rose. But
when industry volume suddenly dropped after 9/11, high labor costs accelerated the industry’s
fall into bankruptcy, ultimately resulting in deep cuts in both wages and jobs. Id. at Fig. 12, 15.
27
C0000558
Undercutting the industry’s ability to invest by diverting resources to unwarranted
payments to labor would risk undermining the positive industry growth and stability that
benefits carriers and employees alike.
Finally, the Coalitions’ corollary argument – that they did better in 2007 when the
industry was less profitable – ignores several important considerations. For one, the
Coalitions seem to forget that the last national agreements were signed just before the socalled “Great Recession.” At the same time that rail freight volumes were crashing in
2008 and 2009 – and at the same time that millions were losing their jobs – Coalition
employees received annual wage increases of 4.0 percent and 4.5 percent. In other
words, the Carriers overpaid in the 2007 agreements, and that is hardly an argument for a
further over-payment now. If anything, it suggests that the Coalitions should accept less
to make up for the excessive increases in compensation over the life of the last
agreement. In any event, it makes no sense to point to the last round as a basis for setting
compensation in this round. Patterns in the industry are generally set round-by-round. If
it were otherwise, then compensation increases would always be the same – they would
not fluctuate to reflect new or changed circumstances.
*
*
*
*
For all these reasons, therefore, the Coalitions’ argument from profitability is
unconvincing. That is especially so when the UTU – which had the same arguments
regarding current railroad profitability – accepted a deal that the other Unions now reject
as inadequate.
28
C0000559
V.
THE COALITIONS’ PROPOSALS ARE NOT JUSTIFIED BY CHANGES IN RAILROAD
PRODUCTIVITY.
The Coalitions’ secondary theme – one that they have raised in every PEB and
negotiation for decades – is that above-market compensation increases are justified by
improvements in railroad productivity. They point to improvements in freight ton-miles
per man hour, noting that there has been a dramatic rise since the 1980 Staggers Act,
including a steady decrease in total employment. While that may be true as far as it goes,
it does not justify compensation increases for these employees.
First, any implication that railroad productivity improvements are the result of
increased effort, output, or efficiency of rail workers are factually unsupportable.
Productivity improvements since the passage of the Staggers Act are largely a function of
factors that have nothing to do with labor:
•
Impact of Economies of Density. Economies of density exist if increasing
the output produced over a given network results in a less than proportional increase in
cost. The biggest factor in the post-Staggers productivity growth is that the substantial
growth of output and substantial reduction of network. Industry consolidation, track
abandonment, and growth of traffic volume all combined to produce a tremendous
increase in traffic density. For example, traffic density doubled between 1985 and 1995.
•
Significance of Product Mix. Between 1980 and 2009, railroad freight
tonnage grew by about 30 percent and the length of haul increased by 50 percent, leading
to a near doubling of revenue ton miles. The increases in tonnage and length of haul
largely reflected the growth of coal and intermodal traffic. But total rail tonnage peaked
in 2006, and has declined substantially since 2008. Intermodal traffic began to decline in
2006, while coal traffic started declining in 2008.
•
Technological Improvements. Railroads’ productivity gains can also be
attributed to technological advances, particularly in locomotives, rails, maintenance of
way equipment, and communication technologies. As a result, the average train was 4%
longer, had 54% more total load weight, and went 50% farther in 2008 than in 1980. The
technological advances in railroads have been embodied in improved capital equipment
and do not indicate any changes in the intrinsic productivity of labor.
29
C0000560
Thus, while there was also a significant decline in employment levels during this period
that also contributed to productivity improvements, there is no evidence that such
declines in total employment levels meant that employees had to work any harder. See
Carriers’ Ex. 8 (Report of Dr. Eakin and Dr. Schoech) at 23-27.
Second, to the extent that cuts in the labor force did contribute to productivity,
those changes were fully realized no later than 1996. Productivity growth that occurred
more than 15 years ago cannot justify the Coalitions’ current bargaining demands. Id. at
24-25. To the extent that the Coalitions are saying that compensation increases are
justified by the decline in the size of the workforce, they ignore the fact that most of the
employees who left as a result of mergers and consolidations received generous
severance benefits. The Carriers should not have to pay twice for rationalizing their
workforce.
Third, recent railroad productivity gains have not outpaced productivity gains in
the broader economy and therefore do not support compensation increases in excess of
those being provided to employees in other industries. Since 1996, railroad productivity
growth has slowed to an average rate of only 1.8 percent per year. Id. at 28. The rate of
railroad productivity growth has declined steadily since 2005, and railroad industry
productivity growth is unlikely to exceed productivity growth in the economy as a whole
again in the foreseeable future. This is largely due to the diminishing returns available
from further density growth and route rationalization. In some areas, tracks are already
operating at or near capacity. This means that the Carriers cannot increase density
without laying additional track, which requires the investment of significant capital. In
30
C0000561
other words, the Carriers have already harvested most (if not all) of the low hanging fruit,
and so future improvements will require massive capital outlays.
Fourth, the vast majority of the productivity gains since the Staggers Act have
been captured by shippers (railroad customers) in the form of lower rates, and have not
benefitted the Carriers. Between 1980 and 2008, more than 80 percent of the productivity
gains have translated into lower rates for shippers and less than 20 percent have translated
into improved margins for the Carriers. Since the Carriers only receive a small portion of
the benefits associated with the productivity gains, the Carriers should not be burdened
with excessive labor costs because of them.
*
*
*
*
In short, the recent productivity improvements in the railroad industry have
resulted primarily, if not entirely, from factors other than increased employee
productivity. Recent improvements in railroad efficiency are largely the result of
significant capital improvements, more rational use of capital, abandoning unprofitable
routes, and increased traffic density, and not the result of greater employee productivity,
effort, skill, or efficiency. Any future railroad productivity gains will be driven by capital
investment and technological improvement. As such, there is no basis for concluding that
higher wages or better benefits will yield further productivity improvements. Available
capital would be better allocated to technology or infrastructure improvements that could
potentially result in further productivity gains.
31
C0000562
CONCLUSION
For all of these reasons, this Emergency Board should recommend the settlement
terms proposed the Carriers – a settlement that mirrors the Carriers’ recent voluntary
agreement with the UTU.
Respectfully submitted,
/s/ Donald J. Munro
A. Kenneth Gradia
Jeff Rodgers
Joanna Moorhead
National Railway Labor Conference
1901 L Street, N.W.
Washington, D.C. 20036
Donald J. Munro
Brian W. Easley
Jones Day
51 Louisiana Avenue, N.W.
Washington, D.C. 20001
32
C0000563
Attachment A: Table A.1: Average Yearly GWIs in Large Private 2010-11
Collective Bargaining Agreements.
Parties
# of Employees
Yearly Compounded GWI
AirT ran Airways-CWA
2,200
0.75%
AK Steel-IAM*
1,700
1.28%
Alaska Airlines-CWA
2,830
1.51%
Alaska Airlines-IAM
2,600
1.31%
Albertsons, Vons, Unified Grocers, and
Ralphs Grocery-IBT
5,700
2.09%
Albertsons, Vons, Unified Grocers, and
Ralphs Grocery-UFCW
62,000
0.48%
Alcoa Howmet-UAW*
1,430
2.47%
Alcoa-USW
6,000
1.27%
Allegheny Power-UWUA
1,150
2.66%
Allegheny T echnologies-USW*
3,000
2.45%
Allied Employers-IBT
25,000
1.22%
Allied Employers-UFCW
25,000
1.22%
Alpha Natural Resources-UMW*
1,400
4.75%
AMPT P-IBT
3,500
2.02%
Appalachian Regional Healthcare-USW
2,400
2.10%
Arizona Public Service Company-IBEW
1,870
2.21%
Army Fleet Support, LLC-IAM
3,800
3.09%
Arrowhead Retail Grocers-UFCW*
1,200
0.54%
Associated Press-CWA
1,200
1.63%
AT &T Mobility-CWA
11,200
2.73%
AT &T -CWA
4,000
3%
BCOA-UMW*
3,000
4.75%
Boeing-IAM
2,600
2.79%
Boeing-UAW
1,700
2.20%
Bronx Realty Advisory Board-SEIU
3,000
1.16%
Building and Realty Institute of
Westchester and the Mid-Hudson
Region-SEIU
1,400
1.56%
Cablevision Systems-IBT
1,100
-2.50%
Campbell Soup-UFCW
1,100
2%
Carhaul-IBT *
4,500
1.37%
Caterpillar-UAW
9,500
0%
33
C0000564
CBS-IBEW
2,800
2.20%
Cessna Aircraft-IAM
2,400
0.14%
Chicago Area Parking-IBT
1,200
2.72%
Consumers Energy-UWUA
3,200
3.02%
Continental Airlines-IAM
9,300
2.98%
Continental Airlines-IBT
7,600
4.20%
Corning-USW
1,350
3.27%
Costco-IBT
12,000
2.35%
Costco-IBT
3,500
2.32%
Daimler T rucks and T homas Built
Buses-UAW
1,049
0.76%
Dana Holding-UAW
2,500
2.77%
Disney Resorts-SEIU
4,000
3.41%
Disneyland Resort-Craft Maintenance
Council
1,100
3.19%
Dow Jones-CWA
1,700
1.53%
DT E Energy-UWU
4,000
3.09%
Frontier Communications-IBEW
1,180
2.83%
Gate Gourmet-IBT , Unite Here, UFCW,
and BCT WGM*
5,300
2.18%
General Dynamics Land Systems-UAW
1,500
0.81%
General Dynamics-UAW
1,900
3.13%
General Electric-9 Unions
4,000
1.99%
General Electric-IUE/CWA
7,900
1.99%
General Electric-UE
3,100
1.99%
General Motors-UAW
48,500
0%
Georgia Pacific Paper Mills-USW
5,135
1.53%
Giant Eagle-UFCW
5,800
2.28%
Hawaiian Airlines-IAM
1,245
3.96%
Hawaiian Electric-IBEW
1,300
2.47%
Hawker Beechcraft-IAM
2,600
1.20%
Hershey-BCT GM
1,400
1.37%
Hilton-Unite Here*
1,500
2.94%
Hollywood Producers and Studios-IBT
3,500
2.02%
Honeywell International-IBT
1,100
1.52%
Hormel Foods-UFCW
4,000
2.21%
International Paper-USW
6,000
1.79%
IT T Night Vision & Imaging-CWA
1,000
3.09%
34
C0000565
JBS Packerland-UFCW*
1,200
1.35%
JBS Packerland-UFCW*
1,200
5.80%
Kaiser Permanente-Multiple Unions
96,000
3.05%
Kaiser Permanente-Unite Here
1,800
3.09%
Kohler-UAW
1,800
0%
Kraft Foods & Oscar Mayer FoodsUFCW
1,600
2.06%
Kroger-UFCW
2,400
0.97%
Kroger-UFCW
1,003
1.01%
Kroger-UFCW*
13,000
1.06%
Kroger-UFCW*
3,000
0.36%
Lockheed Martin-IAM
6,000
2.91%
Lorillard T obacco-BCT GM
1,000
2.01%
Minneapolis/St. Paul Grocery RetailersUFCW
11,000
0%
Minneapolis-St. Paul/Marsden Building
Maintenance-SEIU
4,000
1.24%
National Grid
2,700
2.60%
Navistar International-UAW
2,000
1.01%
Nexteer Automotive-UAW
2,100
0%
Pacific Gas and Electric-IBEW
2,600
1.80%
Pinnacle Airlines-ALPA
3,000
2.63%
PPL-IBEW
1,650
1.02%
PPL-IBEW
1,650
2.89%
Pratt & Whitney-IAM
3,400
2.74%
Public Service Enterprise Group-UWUA
1,300
2.04%
Realty Advisory Board-SEIU
30,000
2.29%
RG Steel-USW
6,000
5.38%
Rite Aid-UFCW
2,600
2.04%
Schnucks, Dierbergs, & Stop'n SaveUFCW*
9,000
0.73%
Smith's-UFCW*
2,000
0.54%
Spirit AeroSystems-IAM
6,000
0.41%
United States Maritime Alliance-ILA
15,000
1.61%
United T echnologies-IAM
1,050
2.56%
Verizon Communications-CWA
5,500
2.83%
Verizon Communications-IBEW
3,600
2.83%
Volvo T rucks-UAW
1,300
1.01%
35
C0000566
Walt Disney World-UniteHere, IBT ,
UFCW, T CU, & IAT SE
20,800
2.31%
Wells' Dairy-United Dairy Workers of Le
Mars
1,400
3.18%
Wisconsin Electric Power-IBEW
1,955
1.40%
Yale-Unite Here
3,400
1.35%
Yale-Unite Here
1,200
2.91%
UTU Pattern Agreement
40,000
3.04%
Average
Weighted Average
2.00%
1.82%
* No average base year wage was available so the base year wage was assumed to equal the 2010 ECEC
average wage for Private Industry Workers with a Union Bargaining Status.
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Table A.2: Average Yearly GWIs in Large Transportation Industry 2010-11
Collective Bargaining Agreements.
Parties
# of Employees
Yearly Compounded GWI
AC T ransit-AT U
1,750
-4.88%
AirT ran Airways-CWA
2,200
0.75%
Alaska Airlines-CWA
2,830
1.51%
Alaska Airlines-IAM
625
1.51%
Alaska Airlines-IAM
2,600
1.31%
AMPT P-IBT
3,500
2.02%
Amtrak-ASWC
1,500
3%
Amtrak-IAM
600
2.98%
Amtrak-IBEW
1,300
2.98%
Amtrak-T CU
5,500
3%
Carhaul-IBT *
4,500
1.37%
Continental Airlines-IAM
9,300
2.98%
Continental Airlines-IBT
7,600
4.20%
Hawaiian Airlines-IAM
1,245
3.96%
King County Metro T ransit-AT U
3,800
0.43%
Mesa Air Group Inc.-AFA/CWA
740
1.01%
Metropolitan Council-AT U
2,200
0%
Pinnacle Airlines-ALPA
3,000
2.63%
United States Maritime Alliance-ILA
15,000
1.61%
UTU Pattern Agreement
40,000
3.04%
1.70%
2.01%
Average
Weighted Average
* No average base year wage was available so the base year wage was assumed to equal the 2010 ECEC
average wage for Private Industry Workers with a Union Bargaining Status.
37
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