The New York Times has a very interesting story on lockouts and their increased use by employers. The story paints a dreary picture for employees — according to the story, employees are facing foreclosure and can’t pay for new clothes for their kids, while companies are out hiring replacement workers and humming along, business as usual.
The reality for many lockouts is more nuanced of course. But the story begs an important question — why exactly have the Company and the union been unable to reach an agreement? What issue in the collective bargaining process is leading to such labor strife?
Wages? Unlikely. Buried in the story is a little nugget that wages for replacement workers were actually higher than regular employees:
“American Crystal has hired more than 900 replacement workers to keep its plants running. Federal law allows employers to hire such workers during a lockout, although they cannot permanently replace regular employees. Employers can pay the replacements lower wages, although as is the case with American Crystal, the companies sometimes need to offer higher wages and help pay for housing to attract replacements.”
Without being privy to the American Crystal negotiations, it’s possible that what drove this lockout was health care and pension costs. As most employers know, the impact of rising health care costs and many union health care plans that offer overly generous benefits is a toxic combination. On top of that, many unions continue to want employers to offer retirement plans that are simply unheard of in other non-unionized environments.
A lockout can be an unfortunate event for all parties involved, but for companies faced with health care and pension costs that are simply unsustainable, there might not be too many other options. In our experience, most employers would prefer not to lockout — is it possible that sometimes union themselves are locking employees into a lockout?