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A Newsletter Dedicated To Rank-and-File Unionism
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Contract
Negotiations
Numbers
"Crunching"
for Negotiations
Costing Out a Contract
(the Easy Version!)
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| WAGES |
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• To calculate the percentage amount
of a flat cents per hour raise: divide the wage increase by the average wage in
the shop.
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EXAMPLE #1: If the average
wage is $9.00, and the wage increase is 30 cents, what's the percentage increase?
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Check Your Answers •
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• To calculate the total wage increase
over the life of a 3-year contract: multiply the first year wage increase (in
cents per hour) by the total number of work hours over the life of the contract, or 3 x
2080; multiply the second year increase by 2 x 2080, and multiply the third year increase
by 1 x 2080. Add these three numbers to find the total.
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EXAMPLE #2: If the wage
increases are .20, .30 and .40 over the life of the contract, what's the total amount of
the increase over 3 years?
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EXAMPLE #3: Now reverse the
numbers: .40, .30, .20 and do the same calculation—this gives us a good idea of the
difference to the members of a "front-loaded" vs. "rear-loaded" wage
offer, i.e. higher wage increases early in the contract vs. higher increases later in the
contract.
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HOLIDAYS,
SICK DAYS, ETC ...
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• To calculate the cost per hour to
the company of a holiday (or a sick day or paid personal day): multiply the
average hourly wage by 8 hours, and then divide into 2080 hours.
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EXAMPLE #4: If the average
wage is $9.00, what's the cost of an additional holiday?
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VACATIONS
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• To calculate the cost to the company
in cents per hour of an additional week of vacation over the course of a year: multiply
the number of workers eligible to get the extra week to get 40 hours, then multiply this
figure by the average wage of those eligible employees, then divide by 2080 hours, then
divide by the total number of employees in the shop.
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EXAMPLE #5: If 3 members
would be eligible to receive the extra week of vacation out of a plant of 80 workers, and
their average wage is $9.50, what's the total cost in cents per hour?
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MEDICAL
INSURANCE PREMIUMS
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• To calculate the cost to workers of
a monthly medical premium in cents per hour: divide the monthly premium by 173.33
hours.
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EXAMPLE #6: If the monthly
premium cost to workers in the company's proposal is $45, what's the cost in cents per
hour?
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Facts You
Need to Know
Based
on a 40-hour
work week:
Hours
in a work year: 2080
Hours
in a work month: 173.33
Average
wage: add all wages, divide by total # of workers
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Useful Statistics
for Collective
Bargaining
While
no negotiations were ever successfully concluded because we had better statistics than the
company, there are some calculations which can provide us with useful weapons. Two of
these include the effect of inflation on our members' wages, and the relationship of the
shop wage level to the federal poverty level. Among the obvious potential uses for these
numbers:
At
the bargaining table to back up our demand for a fair wage increase
With
the membership, to fire people up for the fight to raise wages
With
community and political leaders and the media to enlist potential allies in our fight.
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Is
the Company
Paying Poverty-
Level Wages?
A potentially useful
statistic in many lower-wage contract negotiations is a comparison between the company's
wage levels and the federal poverty level. The U. S. Census Bureau annually calculates the
poverty level, primarily based on the cost of food. While it is UE's position that the
"official" poverty level seriously underestimates the amount of income required
for a family to live a decent life, the poverty level statistic can be a useful benchmark,
as well as an important weapon in our public relations arsenal.
According
to the 1997 figures from the U.S. Census Bureau, the poverty level is:
For a family of four: $16,276 annually, or $7.83 an hour
For a family of five: $19,154 annually, or $9.21 an hour
Additionally,
it's worth keeping in mind that we should be flexible in our calculations of the existing
wage level in the shop. For example, if there is a monthly insurance co-payment of $30, we
should deduct this amount (which equals 17 cents an hour) from the wage level in the shop.
Any other amounts deducted from the worker's checks for benefits (pension or 401(k)
contributions, etc.) can also be deducted from the wage level to help make our case that
poverty-level or near poverty-level wages are being paid. |
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Calculating Increases or
Decreases in Real Wages
Another
important statistic is the effect of wage changes over the life of the current contract
over members' "real wages" (wages adjusted for the effect of inflation). For
example, if we won an increase of 9% over the past three year contract, but inflation rose
11% over the same period, we suffered a drop in real wages of 2%.
In
order to perform this calculation, we need to know two figures: the inflation rate over
the life of the contract, and the percentage change in wage levels in the shop over the
same period.
National
inflation rates CPI-W, urban wage earners and clerical workers) for the calendar years
were:
1988: 4.0%
1989: 4.8%
1990: 5.2%
1991: 4.1%
1992: 2.9% |
1993: 2.8%
1994: 2.5%
1995: 2.9%
1996: 2.9%
1997: 2.3% |
EXAMPLE: The
Union contract from January 1995 to January 1998 included wage increases of 3%, 2.5% and
1.5%. What was the effect of these increases on the workers' real wages? |
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Important Reminder!
Don't fall into the trap of negotiating economics on the basis of how
much the overall "package" costs the employer! These calculations can be
useful tools for us to understand the cost to the employer of the different components of
our economic demands, but should never substitute for negotations that are based on
addressing the real needs of the members.) |
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