Collective Bargaining in the 21 st Century: Charting the Road Ahead

1. Collective Bargaining in the 21st Century:Charting the Road Ahead Spring 2004 Joel Cutcher-Gershenfeld,Thomas Kochan, and John-Paul Ferguson Massachusetts Institute of Technology

2. Overall Framework to Understand the Potential for Transformation in US Industrial Relations Strategic Level Collective Bargaining Level Workplace Level Source: Adapted from Thomas Kochan, Harry Katz, and Robert McKersie, The Transformation of American Industrial Relations. New York: Basic Books (1984)

3. The Collective Bargaining Context Today • Over 40,000 private sector negotiations a year • Cooperative and conflictual extremes • Post 9/11 recession • Policy gridlock • Declining union representation • Competitive pressure • Health care benefits crisis • New forms of work and organization

4. Interactive Process for This Session • Introduction to FMCS National Performance Review Data – 1996, 1999, and 2003 • Presentation and discussion of findings: • Part I: Labor-management relations and collective bargaining • Review findings, small-group dialogue, full-group dialogue • Part II: Interest-Based Bargaining (IBB) and other process issues • Review findings, small-group dialogue, full-group dialogue • Part III: FMCS mediation and other services • Review findings, small-group dialogue, full-group dialogue • Identification of overall implications for collective bargaining in the 21st Century

5. 1993 FMCS National Performance Review Stratified national random sample -- from 30-day notices Stratified by FMCS mediation in last negotiation, union and management, large and small bargaining units All reported results from matched pairs Regional briefings in 1997 and 1999, with 2004 to be scheduled 1996 Survey – 1,557 union and management representatives (1,050 of which are matched pairs) Telephone survey between 10/96 and 12/96 -- 74% response rate 1999 Survey – 2004 union and management representatives (1,654 of which are matched pairs) Telephone survey between 7/99 and 10/99 Public sector sub-sample included (over 400 cases -- 200 matched pairs) 2003 Survey – 1718 union and management representatives (1,168 of which are matched pairs) Telephone survey between 10/03 and 1/04 Public sector and Federal sector sub-samples (over 400 Cases – 276 matched pairs) National Performance Review Surveys

6. Cautions/Notes on the Data • These are preliminary descriptive statistics • Further multi-variate analysis under way • Except where noted, all responses are weighted • Weighted by size, mediation and union or management response • Focus on private sector responses -- some public sector analysis included • Selected comparisons between 1996, 1999 and 2003 data – designed to be illustrative – not exhaustive

7. Data on Trends in Labor-Management Relations • Overview • Labor-management relationships • Direction and rate of change in relations • Factors influencing bargaining • Job actions and replacement workers • Agreements reached • Outcomes • Management-driven • Labor-driven • Additional outcomes • Initiatives following agreement

8. Labor-Management Relationships Note: Overall shift away from very cooperative relationships and toward more adversarial relationships, with greatest increase most recently and from the perspective of union negotiators.

9. Direction and Rate of Change in Relations Note: Decline in union negotiators seeing the relationship improving, with vast majority of relationships not changing or changing very slowing. * Results just for subset of relations where relationship is changing – for better or worse * Percentage response is a subset of total sample based on prior question

10. Combined Direction and Rate of Change in Relations Note: This chart just presents the 2003 data relationships that are improving or getting worse, combined with the responses on the rate of change. Cases reporting no change are not included in this analysis.

11. Top 5 Factors Influencing Bargaining Note: Pressure on fringe benefits dominates most negotiations, followed by work rule flexibility. Some fall-off in pressure due to falling real wages (taking into account inflation) and reduced management concern around trust.

12. Additional Factors Influencing Bargaining Note: Increased union fear of job loss and perceived pressure from international competition, along with reduced management perception of a strike threat. Pressure to upgrade skills in just under a third of negotiations.

13. Additional Factors Influencing Bargaining Note: Contrasting union and management perceptions of each other’s internal disagreements, and increased union perception of threatened plant closing.

14. Job Actions and Replacement Workers Note: A fall-off in strikes, lockouts and job actions, with shorter durations when they do occur and increased threat of replacement workers. * Percentage response is a subset of total sample based on prior question

15. Agreements Reached & Timing of Agreements Note: Sample of first contracts kept “open” as FMCS cases longer than renewal contracts and, after 1996 findings, involved early contact by mediators.

16. Management-Driven Outcomes Note: Increased instances of wage concessions and benefit reductions in 2003 data, as well as a leveling in the management push for work rule flexibility.

17. Union-Driven Outcomes Note: A drop in contracts featuring wage increases and benefit increases, but no change in the proporiton of contracts featuring new language on job security.

18. Additional Outcomes Note: A fall-off in new language on worker input, team-based work systems and joint committees, but continued incremental increases in language on contingent pay systems – possibly off-setting drop in pay increases.

19. New Initiatives and Strategic Partnerships Note: A fall-off in efforts after the negotiations to implement new shop-floor practices, such as team, job rotation, employee involvement and quality initiatives, as well as a fall-off in strategic partnerships following negotiations. * Percentage response is a subset of total sample based on prior question

20. Topics for Discussion -- U.S. Collective Bargaining • Is no change or a slow rate of change for 90% of U.S. collective bargaining relationships adequate given the challenges facing labor and management today? If not, what are the implications? • Why is the rate of workplace innovations (teams, employee input, joint committees, etc.) and strategic partnerships declining? • Why are labor management relations becoming more adversarial? Why do union representatives believe relations are becoming more adversarial than their management counterparts? • What should you as labor and management leaders do about these trends? • What should FMCS do about these trends?

21. Special Focus: IBB and Public Sector • Overview • Interest-Based Bargaining (IBB) • Overall • IBB training • Task forces prior to bargaining • Data exchange • Task forces/brainstorming during bargaining • Dynamics after completion of negotiations • Public sector IBB experience (caution -- small sample in four states)

22. Interest-Based Bargaining (IBB) Overall Note: Familiarity with IBB continues to be high and usage (among those familiar) is increasing, but preference and rating of IBB is declining. * Indicates negotiators who have utilized IBB. * Percentage response is a subset of total sample based on prior question

23. IBB – Training, Other Activities Prior to Bargaining Note: A significant shift away from joint training and toward separate training among those who have ever utilized IBB. Also note a substantial increase in prior notice to constituents. * Indicates negotiators who have utilized IBB. * Percentage response is a subset of total sample based on prior question

24. IBB – Activities During Bargaining Note: A drop in the use of joint task forces and consensus decision making – reflecting a more adversarial tone overall in collective bargaining. * Percentage response is a subset of total sample based on prior question

25. IBB – Deadline and Subsequent Dynamics Note: Contrasting views of behavior at the deadline. Increased backlash over the process (in general, not just IBB) and decreased joint initiatives and use of IBB during term of contract. * Indicates negotiators who have utilized IBB. * Percentage response is a subset of total sample based on prior question

26. Public Sector IBB Awareness & Experience Note: Higher levels of familiarity with IBB in the public sector as compared with the private sector and no parallel fall off in preference for IBB. * Indicates negotiators who have utilized IBB. * Percentage response is a subset of total sample based on prior question

27. IBB and Selected Outcomes -- Management Note: Use of Joint Task Forces and Brainstorming increases the likelihood of management reporting new language on selected outcomes.

28. IBB and Selected Outcomes -- Union Note: Use of Joint Task Forces and Brainstorming increases the likelihood of union reporting new language on selected outcomes.

29. IBB and Benefit Reductions/Increases Note: Use of Joint Task Forces and Brainstorming has a limited impact on benefit reductions (contrasting for union and management) and a marked impact on benefit increases.

30. Topics for Discussion -- IBB and Public Sector • Why might more union leaders be familiar with IBB and experienced with it (in comparison to managers), but fewer union leaders state a preference for it? • Why has satisfaction with IBB and intent to use it in the future declined? • What should you as labor and management leaders do about these trends? • What should FMCS do about these trends? • What do you notice about the public sector data in comparison to the private sector data?

31. FMCS Awareness and experience with FMCS Mediation assessment and overall agency assessment Mediator knowledge and skill Agency focus and profile Mediation – Public and Private Sectors Timing for mediation Tone when mediation began Impact of mediation Meditation activities Process Substance Additional activities Overall assessment Mediation and Agency Data

32. Awareness and Experience with FMCS Note: Awareness and positive perception of the agency is generally very high, but a decline in experience among the population of management representatives. * Analysis limited to cases where mediation occurred

33. FMCS Profile Note: A substantial number of labor and management representatives agree on the need for a higher profile on the part of the FMCS.

34. Mediator Knowledge and Skill * Note: Overall expertise, neutrality, skill, knowledge and trustworthiness of mediators is very high, with perceived industry-specific knowledge increasing. * Analysis limited to cases where mediation occurred

35. Process Activities – Public and Private Sectors * Note: Perceived “big” or “very big” effort reflects many ways that mediators work to improve the process. * Analysis limited to cases where mediation occurred

36. Substance Activities * Note: Perceived “big” or “very big” effort by mediators as they engage the substance of the negotiations. * Analysis limited to cases where mediation occurred

37. Additional Mediation Activities * Note: Perceived “big” or “very big” effort in domains related to IBB or similar problem solving approaches. * Analysis limited to cases where mediation occurred

38. Tone When Mediation Began * Note: More adversarial context for mediation in the public sector. * Analysis limited to cases where mediation occurred.

39. Timing of Mediation* Note: Most mediation takes place after impasse, with slightly higher tendency in the public sector. Note that the private sector timing after impasse is half again the 1999 level. * Analysis limited to cases where mediation occurred.

40. Impact of Mediation – Private Sector * Note: In vast majority of cases, mediation either led to an agreement or at least brought the parties closer together. * Analysis limited to cases where mediation occurred.

41. Likelihood of a Strike, Lockout or Arbitration * Note: Potentially significant adverse impact on society without mediation. 2003 measure combined strike, lockout and arbitration, while 1999 separated out arbitration. * Analysis limited to cases where mediation occurred

42. Overall Assessment of Mediation Experience * Note: Overall view that mediators met or exceeded expectations and anticipation that would use FMCS again, but decline in overall assessment of the importance of mediation. * Analysis limited to cases where mediation occurred

43. Topics for Discussion -- Mediation • Should the FMCS continue to invest in building specialized expertise in certain industries? If so, which industries are most relevant? • Of the various possible mediation strategies, how important are the newer strategies centering on interests and problem solving? • What, if anything, should FMCS do to:a. Increase is public profile b. Address declining management experience with FMCS

44. Concluding Issues • Labor-management issues • Continued slow rate of change and declining rate of innovation • Growing adversarialism • Increased divergence in labor and management views • Declining satisfaction with IBB • Mediation issues • Increasing importance of sector/technical substance • Mediation strategies for the 21st Century • Contrast between management and union views of mediation • National Performance Review and National Labor-Management Conference next steps • Regional hearings • Formal briefings in policy forums

45. The Bottom Line • Collective bargaining is at risk • Who will accept the “mantle of responsibility” for building a healthy collective bargaining system tailored to the needs of the 21st century workforce and economy?

46. Appendix • Feedback on FMCS Arbitration Services • Feedback on FMCS Grievance Mediation Services • Feedback on FMCS Training Services

47. FMCS Arbitration Services Note: Awareness of arbitration services is relatively high, with slightly lower use and highly favorable ratings. * Ratings limited to cases where arbitration services were utilized.

48. FMCS Grievance Mediation Services Note: Awareness of grievance mediations services is lower than arbitration and use is lower as well, but ratings are highly favorable. * Ratings limited to cases where grievance mediation services were utilized.

49. FMCS Training Services Note: Rating of training is very high, but exposure to training differs among union and management respondents. * Analysis limited to cases where training services were utilized. * Percentage response is a subset of total sample based on prior question