Coverage of

Union Contracts in Metropolitan Areas


EDITOR'S NOTE.-This article is the third in a series of three based on the expanded program of labor-market wage surveys which the Bureau of Labor Statistics conducted during the year ending June 30, 1961. The first and second articles in the series were "Job Pay Levels and Trends in All Metropolitan Areas" and "Wage Differences Among Labor Markets," which appeared in the May and June issues. Data on work schedules and provisions for vacation pay and paid holidays obtained in these surveys were presented in "Recent Growth of Paid Leisure for U.S. Workers" in the March 1962 issue.

THE expanded program of annual surveys of occupational wage rates in urban employment by the Bureau of Labor Statistics also covers a variety of establishment practices, including coverage under labor-management agreements. From the 1960-61 surveys in 80 metropolitan areas, the Bureau has made its first estimates of agreement coverage of nonsupervisory plant and office workers in manufacturing and nonmanufacturing industries in the Nation's metropolitan areas. These estimates are presented in this article, together with an analysis of variations in coverage by region, by size of establishment, and by size of community. The proportions of plant and office workers covered by collective agreements are also reviewed within manufacturing and nonmanufacturing.

At the time of the 1960-61 surveys, which were completed in June 1961, labor-management agreements covered nearly three-fourths of the plant workers and a sixth of the office clerical workers who were employed in the establishments within the scope of the study. Agreement coverage of both plant and office workers was highest in public utilities. Within each industry group, coverage increased in successively larger establishments. Similarly, coverage in areas with a million or more population exceeded that in smaller areas. gionally, plant worker coverage was most extensive in the West and North Central regions; office worker coverage was greatest in the Northeast.

Nature and Limitations of Data


All plant workers or office workers in an establishment were considered to be covered by a labor-management contract if the terms of one or more such agreements applied to a majority of these employees. On the other hand, if fewer than half of the plant or office workers in the establishment were covered by an agreement, all such workers were classified as having no labormanagement agreements.

The estimates of agreement coverage, of necessity, relate to the industries and sizes of establishments within the scope of the wage surveys. The major industries excluded from the surveys were construction and those transportation and service industries which were judged to employ very few workers in the occupations studied. Also excluded were municipally-operated facilities such as local transit and electric and gas utilities. The exclusion of establishments with fewer than 50 employees is believed not to affect materially the estimates for manufacturing and public utilities, since relatively small proportions of


*Of the Division of Wages and Industrial Relations, Bureau of Labor Statistics.

1 The 80 areas surveyed constitute a sample of all metropolitan areas. Therefore, the national estimates presented in this analysis relate to the 188 Standard Metropolitan Statistical Areas in the United States, excluding Hawaii, as established by the Bureau of the Budget through 1959.

For further information on the scope of these surveys and the sample design, see "Job Pay Levels and Trends in All Metropolitan Areas,” Monthly Labor Review, May 1962, pp. 510-516.

Plant workers include working foreman and all nonsupervisory workers engaged in nonoffice functions. Office workers include working supervisors and nonsupervisory workers performing office clerical functions and exclude administrative, executive, and professional personnel.

• Establishments with 50 or more workers were included in these studies except in 12 of the largest areas, where the minimum was 100 in manufacturing, public utilities, and retail trade, and 50 in wholesale trade and the finance and service industries.

workers are involved. However, in some of the other nonmanufacturing industry divisions-particularly wholesale trade, retail trade, and services-large proportions of employment are accounted for by small establishments. The estimates of agreement coverage are thus representative only of those medium and large establishments in the industries within the scope of the study and located in metropolitan areas.

Even for the establishments represented in the agreement coverage estimates, the figures do not purport to reflect the proportions of workers belonging to labor organizations. They cannot, because union membership is not generally coextensive with total plant or office employment as defined for wage study purposes. In addition, there are union members in establishments which either were not operating under labor-management agreements or were counted as not having such agreements since only a minority of workers were covered.

National and Regional Estimates

Estimated employment in medium and large establishments within the scope of the survey totaled nearly 10.6 million plant workers and almost 3.2 million office workers in all (188) metropolitan areas. Of these nationwide totals, 73 percent of the plant workers and 17 percent of the office workers were covered by collective agreements (table 1).

Regionally, agreement coverage of plant workers ranged from 48 percent in the South to 80 percent in the West and the North Central region. Coverage of office workers was also lowest in the South (14 percent) but it was slightly higher in the Northeast (19 percent) than in the other two regions. Useful perspective is gained by recalling that the Northeast and North Central regions each accounted for a third of the plant workers, the South a fifth, and the West an eighth. The distribution of office workers differed mainly in that the South and West each accounted for a sixth of the national total.

About four-fifths of the 6,824,300 plant workers in manufacturing and three-fifths of the 3,758,300 plant workers in nonmanufacturing were in establishments operating under collective bargaining agreements. In all regions but the South, the

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1 Establishments with 50 or more workers except in 12 of the largest areas where the minimum was 100 employees in manufacturing, public utilities, and retail trade. In retail trade and finance, all outlets of a company in an area were considered as 1 establishment. All plant or office workers in an establishment were counted as covered if the terms of 1 or more union contracts applied to a majority of these employees. None was counted as covered if agreements applied only to a minority.

The regions in this study are: Northeast-Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont; South-Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia; North Central-Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin; West-Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

Information on establishment practices is obtained annually in 6 of the largest areas; in the other areas, it is obtained biennially on a rotating cycle. Data for a majority of the workers relate to late 1960 and early 1961; for the remainder, to late 1959 and early 1960.

4 Transportation, communication, and other public utilities; taxicabs and services incidental to water transportation are excluded as are all municipally-operated transit systems and utilities.

Finance, insurance, and real estate. Data for plant workers, limited to real estate establishments, do not meet publication criteria.

Hotels, personal services, business services, auto repair shops, nonprofit membership organizations, and engineering and architectural services; data for motion picture production and allied services are excluded here but included in estimates for all industries and nonmanufacturing. Less than 0.5 percent.

proportions of plant workers covered by agreements exceeded the nationwide estimates for both manufacturing and nonmanufacturing; in the South, the proportions were three-fifths and one-third, respectively.

A fifth of the 1,913,000 office workers in nonmanufacturing and an eighth of the 1,238,000 office workers in manufacturing were covered by agreements. Regionally, office worker coverage in nonmanufacturing ranged from a seventh in the South to slightly more than a fifth in each of the other regions; coverage in manufacturing ranged from about a tenth in the North Central region and the West to a sixth in the Northeast.

These estimates exclude about 25,000 plant workers and 4,000 office workers for whom information about agreement coverage was not available.

Agreement coverage varied greatly among the five nonmanufacturing industry divisions studied. As shown in table 1, coverage was greatest in public utilities for both plant and office workers and was lowest in retail trade for plant workers and in finance for office workers. The interindustry contrast was most striking in the South; in public utilities, 86 percent of the plant workers and 55 percent of the office workers were covered by agreements but among the other industry divisions, coverage of plant workers ranged from 13 to 22 percent and coverage of office workers was 3 percent or less.

The extent to which nonmanufacturing agreement coverage, particularly of office workers, was concentrated in public utilities is suggested in the following tabulation:

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In making the size-group estimates, establishments were classified by their total employment, rather than the size of their office or plant staffs. Most manufacturing establishments employ fewer office workers than are found in public utility, insurance, banking, or retail establishments with comparable total employment.

Agreement coverage in the largest establishments (2,500 or more workers) was about twice that in the smallest establishments (50-100 workers) for plant workers and five times as high for office workers (table 2). With few exceptions, coverage rose as size increased; this pattern held for plant and office workers in both manufacturing and nonmanufacturing within individual regions.

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NOTE: Dashes indicate data that do not meet publication criteria.

Thus, the degree of variation in agreement coverage among establishment size groups in nonmanufacturing as a whole is explained, in part, by differences in the groups' industrial composition. To illustrate: among plant workers in the nonmanufacturing establishments with 2,500 more employees, public utilities and retail trade accounted for 57 and 40 percent, respectively, and other industries, only 3 percent. By contrast, plant workers in the 100-249 employee group were distributed as follows: retail trade, 38 percent; services, 25 percent; public utilities and wholesale trade, 17 percent each; and real estate, 3 percent.

Office worker coverage under collective agreements in nonmanufacturing ranged from 42 percent in the 2,500 and over group to 7 percent in the two smallest groups. In the largest group, employment was concentrated in public utilities (48 percent) and finance (36 percent), whereas in the two smallest groups, it was in large part recorded in finance, wholesale trade, and the service industries. Office worker coverage also increased with successively larger size groups in public utilities and trade but not in finance and services.

Variation by Size of Community

In order to examine the relationship between labor-management agreement coverage and area population, the 80 Standard Metropolitan Statistical Areas studied were classified into three

TABLE 2. UNION CONTRACT Coverage of Plant and Office Workers in Metropolitan Areas, BY SIZE OF ESTABLISHMENT,' INDUSTRY DIVISION, AND REGION, 1960-61 3

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See footnote 2, table 1. See footnote 3, table 1.

of the 3,421,000 plant workers in the metals and metalworking industries in all areas combined. were covered by agreements. A larger proportion (13 of 23) of the areas with a population of 1 million or more than of smaller areas (21 of 57) had half or more of manufacturing workers employed in metals and metalworking industries. In an array of the large metalworking centers, the median area had 85 percent of all plant workers working under agreements; among metalworking areas of less than 1 million population, the coverage estimate in the median area was 76 percent. This limited examination suggests that agreement coverage is to some extent related to size of community as such.

Agreement coverage estimates for each area, separately for plant and office workers and by industry division, appear in Wages and Related Benefits, 82 Labor Markets, 1960-61 (BLS Bulletin 1285-83, pp. 120-121).

Summaries of Studies and Reports

Survivors' Benefits in Collectively Bargained Pension Plans

UNDER PENSION PLANS, survivors are protected by (1) death benefit provisions, under which payments may automatically be made upon the death of the worker or pensioner, and (2) survivor options, which allow covered workers to surrender part of their regular pension benefits to assure benefits for their survivors. In addition, most contributory plans afford some protection by returning worker contributions. Survivors of active workers are almost always protected by life insurance benefits of an associated health and insurance plan. Less frequently, these latter plans also offer some protection to the survivors of retired workers.

The Bureau of Labor Statistics has analyzed the benefits provided to survivors under 300 pension plans. These are the identical plans used in two previous studies of pension plans.1 The coverage of these plans-approximately 4.7 million workers in 1958-represented more than two-fifths of the estimated coverage in 1960 of all collectively bargained pension plans in the United States.

Death Benefits

A death benefit provision-lump-sum benefit or payment-certain guarantee was included in 50 plans covering 1.2 million workers (table 1), or about 1 out of 4 workers in the study. Death benefits were provided by nearly 1 out of 3 multiemployer plans compared with 1 out of 8 single employer plans studied, covering over 40 and 16 percent, respectively, of the workers under such plans. Over 1 out of 6 noncontributory and contributory plans provided a death benefit.2 Only in the communications industry were death benefits provided in all the plans analyzed, but all the larger plans in the transportation industry made such provision.

In addition to a death benefit, 19 plans with over 300,000 workers made available one or more survivor options including, with one exception, a joint and survivor option. To avoid double coverage, however, no death benefit was payable if an option was selected.

All but 3 of the 50 plans provided death benefit coverage after retirement. Only 18 plans, however, paid a benefit if death occurred before retirement. Lump-sum payments were provided by more plans than other types of death benefits.

Requirements. Twenty-nine of the plans with death benefit provisions contained eligibility requirements, which were usually based on age and/or service at the time of death. Such requirements were, with one exception, prerequisites to the payment of benefits in case of death before retirement. For death after retirement, however, only 1 out of 6 plans had any eligibility requirements.

Nineteen plans with eligibility requirements stipulated the completion of a specified period of service usually 5 years or less. Five of these plans also required the attainment of a specified age. In three cases, coverage depended merely upon membership in the employer's group insurance plan, which was attainable after a few months' employment.

Forty of the fifty plans permitted the worker to designate anyone with an insurable interest

1 See Pension Plans Under Collective Bargaining, Late 1958: Part I. Vesting Provisions and Requirements for Early Retirement; Part II. Involuntary Retirement Provisions (BLS Bulletin 1259, 1959), which also appeared in the Monthly Labor Review of July and August 1959 (pp. 743-750 and 855-860); and Pension Plans Under Collective Bargaining, Fall 1959: Normal Retirement; Early and Disability Retirement (BLS Bulletin 1284, 1961), also published in the October and November 1960 issues of the Review (pp. 1052-1061 and 1176-1183).

Though not considered a death benefit, 42 contributory plans provided some additional form of protection by returning worker contributions, usually with interest.

For preparticipation requirements of pension plans, see BLS Bulletin 1284, op. cit., p. 2. Such requirements were equally represented among plans with and without death benefits.

An insurable interest may be in the form of love and affection (presumed in a close family relationship) or a pecuniary relationship. See O. D. Dickerson, Health Insurance (Homewood, Ill., Richard D. Irwin, Inc., 1959), p. 87.

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