Verizon is likely to bring closure to a series of strikes that began in April after reaching an agreement with two major unions, Communications Workers of America and International Brotherhood of Electronic workers. The unions, representing over 40,000 striking workers, argued that the company was more than profitable enough to support a large work force along with good, fair benefits and wages.
Wireline vs. Wireless
Verizon argued that it needed to cut costs to preserve its wireline business as many of its competitors are not unionized, and therefore better positioned to deal with substantial labor costs. However, the unions believe Verizon’s fiber-optic network is actually still lucrative, and say that Verizon’s support for the wireline business has diminished in favor of its wireless branch, which is largely nonunion.
A Victory for Both Sides
The proposed agreement between Verizon and the unions would give workers an 11 percent increase in overall pay in addition to modest ratification bonuses and profit sharing. The unions also managed to beat back pension cuts and put and end to caps on pension benefits after 30 years of service.
Also of note, new contracts would cover some 65 unionized workers at Verizon’s wireless stores, a first for retail workers and an important precedent for the wireless industry.
However, the agreement was not completely one sided. Verizon was able to achieve at least one substantial victory in the form of hundreds of millions in healthcare cost savings. Verizon would also have an easier time eliminating jobs once a year through buyout incentives that could bypass the unions.
In a statement by Marc Reed, Verizon’s Chief Administration Officer, the new union contracts would, “include key changes sought by the company to better position our wireline business for success in the digital world.” Labor experts also believe these victories would be felt in the broader telecommunications industry.
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