ABSTRACT
Since collective bargaining is intimately related to general economic conditions, the abnormal occurrence of both high inflation and high unemployment, or "stagflation," has resulted in anomalous bargaining conditions and contractual settlements. Trade deficits, monetary fluctuations, government spending, as well as recessionary and inflationary events all affect collective bargaining on wages. The steelworkers have sought a guaranteed annual wage as a way of taking into account both the decline in real income resulting from inflation and the threat to job security resulting from economic stagnation. The most notable examples are in health care, where collective bargaining is virtually incapable of keeping pace with rising medical and hospital costs. Government funding of health maintenance organizations would tend to reduce both wage demands and health care costs. Collective bargaining is an imprecise art. It is difficult to describe the many effects of inflation on its practice, but they are pervasive and potentially destructive.
