![Chapter 09 - Wage and Benefit Issues in Bargaining
9-3
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reproduction or display.
Ability to Pay
• While ability to pay takes two forms, the primary argument relates to a
firm’s profitability. When profits are increasing, unions expect to receive
pay increases.
• Some internal union critics have condemned concessions, arguing that
past labor leaders would not have accepted them.
• Ability to pay is also related to the proportion of labor costs in a
company’s total costs. Generally, unions believe that the lower a firm’s
labor intensity (i.e., the lower the share of costs going to labor), the
greater its ability to pay.
Note: Exhibit 9.1 [DOUGLAS FRASER RECALLS WALTER
REUTHER’S POSITION ON CONCESSIONS]
Table: 9.1 [Cost Comparisons for Labor- and Capital-Intensive Firms]
Standard of Living
• The standard-of-living component takes on two meanings. One relates to
the purchasing power of employees’ pay (real wages).
• Where negotiated, cost-of-living adjustments (COLA) is intended to
maintain parity between wages and prices over time.
• Canadian contracts with COLAs also had longer durations, had lower
base wage increases, and were more likely to include performance-based
pay provisions.
• Standard-of-living issues also arise with unions’ beliefs that their
members’ purchasing power needs improvement for them to enjoy higher
qualities of goods and services, such as owning a home rather than
renting.
• Equity is related to both internal and external comparisons, ability to pay
to profits and labor intensity, and standard of living to real wages and
absolute improvement.
Note: Fig 9.1 [Wage Demand Components]
PAY PROGRAMS
• Collective bargaining alters the status quo in pay administration by
substituting a contract for management’s unilaterally determined
practices.
• Pay level refers to how an employer’s average pay rates for jobs compare
with other employer’s rates.
• Pay structure consists of the sets of wage rates the employer applies to
different jobs and the ranges of wage rates possible within specific jobs
in the organization.](https://image.slidesharecdn.com/16500-250702022454-f643855d/85/Labor-Relations-Development-Structure-Process-12th-Edition-Fossum-Solutions-Manual-7-320.jpg)
![Chapter 09 - Wage and Benefit Issues in Bargaining
9-6
Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for
reproduction or display.
Note: Table 9.2 [Points Assigned to Factors and Degrees]
Fig: 9.2 [Definition of Factor and Degrees within Factor]
Grade Structures
• Often organizations will divide jobs into several different grades to
reflect differences in the skill levels required and also to create a
promotional ladder that employees may climb during their careers with
the company.
• Grade structures have several characteristics that would need to be
negotiated.
o First, the parties would need to decide how many grades there
would be in the structure.
o Second, they would have to decide which jobs were to be
assigned to which grades.
o Third, they would have to determine how large a difference in pay
there would be between grades.
o Fourth, they would have to decide how large the difference would
be between the minimum and maximum pay rates an employee
could earn within a pay grade.
Note: Fig 9.3 [Examples of a Grade Structure]
Skill-Based Pay
• Most pay structures in unionized settings base pay differences on
employees’ grades and job classifications.
• Skill-based pay (SBP) ties pay to the skills employees have acquired.
• Relatively few job classifications exist, and employees can be moved
between assignments based on the employer’s needs.
• The practice supports team-based production, which blurs job boundaries
and, thus, is not found in many unionized plants.
Note: Fig 9.4 [Skill-Based Pay Plan Skill Blocks and Progression]
Lane-and-Step Plans
• In the unionized public sector, lane-and-step plans are often implemented
for jobs in which increased education and experience are assumed to be
related to productivity or performance differences.
• In a lane-and-step system, pay rates are based on the length of an
employee’s employment in the organization and on the highest amount of
education completed.
Note: Fig 9.5 [Example of Lane-and-Step Schedule]](https://image.slidesharecdn.com/16500-250702022454-f643855d/85/Labor-Relations-Development-Structure-Process-12th-Edition-Fossum-Solutions-Manual-10-320.jpg)
![Chapter 09 - Wage and Benefit Issues in Bargaining
9-8
Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for
reproduction or display.
this period union coverage in the private sector fell while increasing in
the public sector.
Note: Fig 9.6 [Benefit Cost Index (2001-12)]
Wage-and Pension-Tied Benefits
• The costs of some benefits (e.g., vacations and holidays) and statutory
payments (social security and Medicare payroll taxes) are essentially a
function of wages. The cost of these is directly proportional to the wage
each employee earns.
• Some other benefits such as health insurance are person-tied; that is, the
cost to the employers is linked to the number of employees, not the level
of their pay.
• Other benefits are tied to a combination of person and wage
characteristics such as disability, life insurance and pension plans.
Health Insurance
• Rising health care costs have been an increasing problem for employers;
employees; unions; members of the public; and federal, state, and local
governments.
• Between 1983 and 2011, the rate of increase in employer-provided health
care benefits rose 2.75 times the overall rate of inflation as measured by
the consumer price index (CPI).
• Even if health care inflation were to be contained, the aging of the baby
boom cohort will inexorably increase the footprint of the health care
sector over the next 20 to 30 years.
Note: Fig 9.7 [Average Annual Worker and Employer Contributions for
Family Coverage]
• From an employer standpoint, the increasing magnitude of health care
costs and the uncertainty surrounding their annual rate of change make it
difficult to control and predict future labor costs. Since health care
benefits are a person-based benefit, if health care costs increase faster
than wages, employers will become increasingly reluctant to hire
additional employees, all else being equal.
• Given employers’ desires for certainty or predictability in costs during
the term of a contract, they would prefer to include a specific amount of
premiums to be paid per employee in each year of the contract, shifting
the risk of possible premium increases beyond the negotiated amount to
the employees.
• In practice, most large employers that offer health care benefits to
employees do not purchase health insurance, but rather self insure, since
the cost of health care, like wages, is a usual cost of doing business.](https://image.slidesharecdn.com/16500-250702022454-f643855d/85/Labor-Relations-Development-Structure-Process-12th-Edition-Fossum-Solutions-Manual-12-320.jpg)
![Chapter 09 - Wage and Benefit Issues in Bargaining
9-9
Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for
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• Insurers handle the paperwork involved in the plan and bill the company
for covered services. If billings exceed what the employer anticipated, it
will essentially experience a health care “insurance premium” increase as
a result.
• If an employer provides a specific package of health care benefits and if
the costs increase faster than wages, labor costs will escalate more
rapidly than expected during the term of a multiyear collective bargaining
agreement.
• Additional complexities are introduced by provisions in the PPACA that
require employers who provide health insurance to extend it to all
workers who are employed for 30 or more hours per week. Table 9.3
compares costs for workers with a 30 hour schedule to those working a
29 hour schedule. Under the PPACA requirements, an employer would
be expected to eliminate the 32-hour workers and replace them with 29-
hour workers and would increasingly substitute overtime work for full-
time workers if health care costs continue to inflate faster than wages.
• Because federal wage and hour laws require that certain employees
receive a 50 percent premium for working more than 40 hours per week,
an employer would generally reduce costs by hiring new employees
when more work is needed. However, if person-tied benefits such as
insurance and paid time off exceed 50 percent of base pay, an employer
would prefer overtime unless the contract requires a higher premium.
Thus, increasing person-tied benefits restricts new hiring.
• Health care cost containment has increased in importance for both
parties.
Note: Table 9.3 [Cost per Employee for Wage and Health Care Increases]
Patient Protection and Affordable Care Act of 2010 (PPACA-Obama Care)
• The PPACA was signed into law by President Obama on March 23,
2010. Some provisions of the law began to take effect six months later on
September 23, 2010. Additional provisions will become effective on
succeeding anniversaries through 2018.
• Going forward, the PPACA substantially changes the health care
environment and that latitude that management that labor have in crafting
worker health care coverage.
• Several of the provisions that took effect in 2010 resulted in immediate
cost increases for employers that offer health care plans and other
provisions that were to become effective in 2014 but were postponed to
2015 (after the midterm elections) may lead to additional employer borne
costs or could provide an incentive for employers to drop or negotiate to
drop health care coverage and pay the consequent penalties instead.
Note: Table 9.4 [Major Provisions of PPACA Affecting Employers]](https://image.slidesharecdn.com/16500-250702022454-f643855d/85/Labor-Relations-Development-Structure-Process-12th-Edition-Fossum-Solutions-Manual-13-320.jpg)
![Chapter 09 - Wage and Benefit Issues in Bargaining
9-10
Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for
reproduction or display.
• The PPACA permits current collectively bargained plans limited
“grandfathered” status, but certain provisions must be added, even to
grandfathered plans and it may become difficult for a plan to remain
grandfathered.
• Management in particular may need to negotiate provisions enabling the
health care benefit provisions in the contract to be reopened for further
negotiations as changes are mandated and regulations shift.
• Requirements for affordability that become effective in 2014 may
provide a floor from which unions can negotiate while the “Cadillac” tax
imposed in 2018 will create a benefit ceiling, especially if cost escalation
continues at its recent rate.
• The PPACA remains controversial and the effects of its implementation
are yet to be fully known.
o In the short run, the 30 hour part- full-time cutoff for eligibility
for coverage is likely to reduce employment for persons working
30-40 hours and increase overtime and part-time employment of
less than 30 hours.
o For health care workers, bargaining power will be reduced since
reimbursements for Medicare providers will be cut as the law is
increasingly implemented.
o In the longer run, entry into health care occupations may be
reduced given increasing government involvement as a
monopsonist in the pricing of health care purchases.
o Even strong union proponents of its passage have exhibited alarm
about the potential negative effects of the will have on them if
implemented as currently planned.
Note: Exhibit 9.2 [Unions Realize Side Effects of ObamaCare]
▪ Both Richard Trumka, head of the AFL-CIO, and Joe
Hansen, head of the Change-to-Win coalition are having
second thoughts about some of the provisions contained in
ObamaCare and the implementation glitches that are
postponing the employer mandate requirement until 2015.
▪ Besides having an impact on employers, ObamaCare will
affect the operation and costs of union-sponsored multi-
employer health care plans, covering members in a variety
of jobs employed across a relatively large number of
smaller employers. The employee contributions required
by these plans will likely seem “unaffordable” to low
wage employees who will not be eligible for insurance
subsidies insurance is not provided by their employers.
▪ Mr. Trumka also calls the one-year delay in implementing
the employer mandate a “significant handout to
employers”; and Mr. Hansen calls out the president’s
promise in 2009 that union employees would be able to](https://image.slidesharecdn.com/16500-250702022454-f643855d/85/Labor-Relations-Development-Structure-Process-12th-Edition-Fossum-Solutions-Manual-14-320.jpg)
![Chapter 09 - Wage and Benefit Issues in Bargaining
9-11
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keep their insurance under the proposed law as “simply
not true for millions of workers.”
▪ Some unions are calling for a repeal of the law because of
concerns over rising costs.
Retirement Income Plans
• Employees may offer one or more of several types of retirement income
plans.
o Defined benefit plans specify rules used to determine future
pension benefits.
o Defined contribution plans specify what the employer will set
aside for the employee’s retirement each year.
o Salary reduction plans are tax-advantaged and may include a
matching contribution from the employer.
Note: Table 9.5 [Main Features and Types of Retirement Income Plans]
• Before the 1970s, most company-sponsored pensions were defined
benefit plans. Pension payments were made from their current revenues.
As the number of retirees relative to the number of active employees
increased, and as life expectancies were growing longer, expenses for
pensions increased much more rapidly than labor costs. Some companies
encountered financial difficulties and defaulted on promised pension
payments. As a result legislation to regulate private sector pension and
insurance benefit plans was developed, introduced and passed in 1974.
• Pension plans are regulated by the Employment Retirement Income
Security Act (ERISA) of 1974. The law does not require that an
employer offer a pension plan, but where one exists, the employer must
comply with several rules.
• ERISA requires employers with pension plans to allow all employees
aged 21 and over to participate.
• If the employer has a defined benefit plan, it must make an annual
actuarially based contribution that will cover the expected future
retirement costs.
• A company can choose to terminate a fully funded plan but if it does so,
it must provide a payment equal to the amount of pension that would be
provided at retirement if the employee were to have the current salary
and length of service at retirement. However, it is unlikely that a union
would agree, in negotiations, to allow an employer to terminate an
existing plan.
• Some employers offer a defined contribution plan. These plans contribute
a fixed percentage of pay or profits each year to each employee's account.
• Before ERISA, companies that had defined benefit plans almost never
funded them with an amount equivalent to future liabilities. The law
allowed employers 40 years (until 2014) to fully fund an underfunded](https://image.slidesharecdn.com/16500-250702022454-f643855d/85/Labor-Relations-Development-Structure-Process-12th-Edition-Fossum-Solutions-Manual-15-320.jpg)
![Immortal, I behold the passing show
Of little witlings ruling things below,
And smile to see, repeated o'er and o'er,
The literary tricks I lash'd before,
And lash again, with satisfaction deep;
And other 'rods in pickle' I shall keep
For those who on my memory slanders fling,
Envying the songs they have no power to sing!
"Gods of Olympus! Comrades of my thought,
Where is the fire that once Prometheus brought
To light the world? It warmed my ardent veins,
And still the nations echo forth my strains;
Greece still doth hold me as her minstrel dear
And decks with fragrant myrtle boughs my bier—
England forgets—but England is no more
The England that our fathers loved of yore—
A huckster's stall—a swarming noisy den
Of bargaining, brutal, ignorant, moneyed men—
England, historic England! She is dead,
And o'er her dust the conquering traders tread,
Crowning with shameful glory on her grave,
Some greasy Jew or speculating knave;
While blundering Gladstone, double-tongued and sly,
Rules; the dread 'Struldbrug,'[2] who will never die!
"Thus far I've held my undisturbed career
Prepared for rancour—spirits know not fear!
Catch me, a Ghost, who can! Who knows the way?
Cheer on the pack! The quarry stands at bay;
Unmoved by all the 'Savile' logs that roll—
I stand supreme, a deathless poet-soul—
Careless of Lang's resentment, Gosse's spite,
Swinburne's small envy, Arnold's judgment trite,
Henley's weak scratch, or Pall Mall petty rage,
Or the dull Saturday's unlessoned page—
Such 'men in buckram' shall have blows enough,](https://image.slidesharecdn.com/16500-250702022454-f643855d/85/Labor-Relations-Development-Structure-Process-12th-Edition-Fossum-Solutions-Manual-23-320.jpg)
![What fearful alternative he had in store for me I never knew, for just
then he began to dissolve. Slowly, like a melting mist, he grew more
and more transparent, till he completely disappeared into
nothingness, though for some minutes I fancied I still saw the
reflection of his glittering laurel wreath playing in a lambent circle on
the floor. Awed and much troubled in mind, I went to bed and tried
to forget my spectral visitor. In vain! I could not sleep. The lines
recited by the disembodied Poet burned themselves into my memory
as he had said they would, and I had to get up again and write them
down. Then, and not till then, did I feel relieved; and though I
thought I heard a muttered "Swear!" from some a "fellow in the
cellarage," I knew I had done my duty too thoroughly to yield to
coward fear. And I can only say that if any of the highly
distinguished celebrities mentioned by the ghost in his wrathful
outburst feel sore concerning his expressed opinion of them, they
had better at once look up a good "medium," call forth the noble
lord, and have it out with him themselves. I am not to blame. I
cannot possibly hold myself responsible for "spiritual"
manifestations. No one can. When "spooks" clutch your hand and
make you write things, what are you to do? You must yield. It is no
good fighting the air. Ask people who are qualified to know about
"influences" and "astral bodies" and other uncanny bits of
supernatural business, and they will tell you that when the spirits
seize you you must resign yourself. Even so I have resigned myself.
Only I do not consider I am answerable for a ghost's estimate of the
various literary lustres of the age:—
"Byron's opinions these, in every line;
For God's sake, reader, take them not for mine!"
FOOTNOTE:
[2] The "Struldbrugs" were a race of beings who inhabited the
"Island of Laputa," and were born with a spot on the forehead, a](https://image.slidesharecdn.com/16500-250702022454-f643855d/85/Labor-Relations-Development-Structure-Process-12th-Edition-Fossum-Solutions-Manual-25-320.jpg)
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- 5. Chapter 09 - Wage and Benefit Issues in Bargaining 9-1 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. CHAPTER 9 WAGE AND BENEFIT ISSUES IN BARGAINING MAJOR POINTS 1. Wages are always a major issue in bargaining. 2. Firms producing equivalent output with lower labor costs will have higher profits and be better able to operate during downturns. 3. This chapter examines the components of union wage demands, bargaining on specific aspects of the pay program, the effects unions have on pay levels in both union and nonunion organizations, and the prevalence of wage and benefit issues in contracts. 4. The following questions have to be considered while studying this chapter. a. What are the strongest current arguments unions and/or managements use in the proposal or defense of present or future wages and benefits? b. What effect do bargained wages and benefits have on the economic performance of the employer and on nonunion employees of the same or other employers? c. How does the form of wages influence employer and employee outcomes? d. How does the system for allocating salary increases differ in union and nonunion organizations? e. How does the usual structuring of union wage and benefit demands alter the structure of wage differentials in an organization over time? KEY TERMS Ability to pay Standard of living Cost-of-living adjustment (COLA) Pay level Pay structure Pay form Pay system Job evaluation Skill-based pay (SBP) Two-tier pay plan Defined benefit pension plan Defined contribution pension plan Salary reduction plan Voluntary employee benefits association (VEBA) Benefit status seniority Scanlon plan Production committee Screening committee Rucker plan
- 6. Chapter 09 - Wage and Benefit Issues in Bargaining 9-2 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. Impro-Share Profit-sharing plan CHAPTER OUTLINE UNION AND EMPLOYER INTERESTS • The union movement has always argued that wealth is ultimately created by labor, in all its forms, and that the distribution of income is excessively unequal. • Unionization aims to increase the power of workers to increase their share of the firm’s revenue. • Private sector employers are ultimately interested in maximizing shareholder value. • They would also prefer the greatest possible flexibility in structuring their operations, including the mobility of capital. COMPONENTS OF WAGE DEMANDS • In framing its wage demands, the union relies on three major criteria: equity within and across employers, the company’s ability to pay, and its members’ standards of living. Equity • With regard to equity, unions want wages for jobs they represent as exceeding–or at least as being consistent with–those of equivalent nonunion jobs in the firm. • Unions attend to bargains forged in other industries, but, because of global competition and deregulation, upward pattern bargaining across industries has declined. • Income inequality is also a component of the equity demand. Unequal distributions exist where different workers in different jobs earn different pay. From a union standpoint, excessive inequality would be related to differences between production workers, professionals, and executives that are larger than members can justify. • For the union, inequality suggests there may be an opportunity to redistribute income from higher to lower-level jobs. • Income inequality has increased substantially since the 1980s. Reduced union coverage is a major contributor to income inequality.
- 7. Chapter 09 - Wage and Benefit Issues in Bargaining 9-3 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. Ability to Pay • While ability to pay takes two forms, the primary argument relates to a firm’s profitability. When profits are increasing, unions expect to receive pay increases. • Some internal union critics have condemned concessions, arguing that past labor leaders would not have accepted them. • Ability to pay is also related to the proportion of labor costs in a company’s total costs. Generally, unions believe that the lower a firm’s labor intensity (i.e., the lower the share of costs going to labor), the greater its ability to pay. Note: Exhibit 9.1 [DOUGLAS FRASER RECALLS WALTER REUTHER’S POSITION ON CONCESSIONS] Table: 9.1 [Cost Comparisons for Labor- and Capital-Intensive Firms] Standard of Living • The standard-of-living component takes on two meanings. One relates to the purchasing power of employees’ pay (real wages). • Where negotiated, cost-of-living adjustments (COLA) is intended to maintain parity between wages and prices over time. • Canadian contracts with COLAs also had longer durations, had lower base wage increases, and were more likely to include performance-based pay provisions. • Standard-of-living issues also arise with unions’ beliefs that their members’ purchasing power needs improvement for them to enjoy higher qualities of goods and services, such as owning a home rather than renting. • Equity is related to both internal and external comparisons, ability to pay to profits and labor intensity, and standard of living to real wages and absolute improvement. Note: Fig 9.1 [Wage Demand Components] PAY PROGRAMS • Collective bargaining alters the status quo in pay administration by substituting a contract for management’s unilaterally determined practices. • Pay level refers to how an employer’s average pay rates for jobs compare with other employer’s rates. • Pay structure consists of the sets of wage rates the employer applies to different jobs and the ranges of wage rates possible within specific jobs in the organization.
- 8. Chapter 09 - Wage and Benefit Issues in Bargaining 9-4 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. • Pay form is the method by which compensation is received; it includes cash, insurance payments, deferred income, preferential discounts, payments in kind, and recreational and entertainment programs. • Pay system refers to the methods used to determine how much each individual will earn within a job. Pay Level • The basic components associated with pay level changes were those shown in Figure 9-1: ability to pay, equity, and standard of living. Ability to Pay • A variety of considerations influences ability to pay. • The general level of business activity influences profits. • Employers who have relatively capital-intensive production processes or that bargain with several relatively small units do not have the incentive to avoid large wage increases that labor-intensive firms have. • Pay level comparisons become more difficult to make as pay form becomes more complex. • Employers are interested in reducing the fixed proportion of pay. • Employees may also be interested in making pay flexible if it leads to more job security. • In attempting to reduce the rate of growth in employees’ base wage levels, firms have offered lump-sum bonuses for agreeing on a contract. Equity • Achieving equity across employees in a given industry is important for unions because it has the effect of taking wages out of competition. • Some have argued that major national unions respond to the bargaining success of their counterparts. • Major settlements are presumed to be key-comparison or pattern-setting agreements; however, wage imitation is likely to be decreased by: o Differences between industries in which employers operate. o Differences in the ability to pay within these industries. o The time between pattern-setting and later settlements. Standard of Living • Inflation increases the importance unions place on maintaining a standard of living. • The inclusion of COLAs increased rapidly during the 1970s when inflation was high and employers were interested in longer contracts.
- 9. Chapter 09 - Wage and Benefit Issues in Bargaining 9-5 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. • Where COLAs exist, pay levels within the contract period are tied to changes in the consumer price index (CPI).(for e.g., Pg: 262) • Unions prefer to include them in the base before the current contract expires because, if inflation were high, an extremely large increase would be needed to bring the base up to a real-income standard equivalent to that earned at the end of the expiring contract. Pay Structure • Pay structure refers to the pattern of wage rates for jobs within the organization. Within the bargaining unit, the union negotiates these with management. • Pay differentials may be negotiated on a job-by-job basis or result from using a negotiated job evaluation system. • Bargaining often results in across-the-board pay increases of equal magnitude for all bargaining-unit jobs. • While absolute wage differentials are maintained, relative differences shrink, causing wage compression. Job Evaluation • Job evaluation determines the relative position of jobs within a pay structure. The procedure has several steps and requires decision-making rules that must be negotiated. • In general, job evaluation includes the following steps. o The jobs to be evaluated must be specified (usually jobs covered by the contract). o Jobs must be analyzed to determine the behaviors required and/or the traits or skills necessary to perform the job. o Of the behaviors or traits identified, those that vary across jobs and are agreed to be of value to the employer are grouped into compensable factors. o For evaluation purposes, each factor is clearly defined, and different degrees of involvement for each factor are determined. o Point values are assigned to factors and degrees within a factor. o Job evaluation manuals used to apply the method are written. o All jobs are rated. • Job evaluation involves either: o Using a union-management committee to determine compensable factors and the degree to which they are required in bargaining unit jobs. (or) o Negotiating the points to be applied to evaluations completed by management. • The primary disadvantage is the requirement for initial agreement between the union and management on the identification, definition, and point assignments associated with compensable factors.
- 10. Chapter 09 - Wage and Benefit Issues in Bargaining 9-6 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. Note: Table 9.2 [Points Assigned to Factors and Degrees] Fig: 9.2 [Definition of Factor and Degrees within Factor] Grade Structures • Often organizations will divide jobs into several different grades to reflect differences in the skill levels required and also to create a promotional ladder that employees may climb during their careers with the company. • Grade structures have several characteristics that would need to be negotiated. o First, the parties would need to decide how many grades there would be in the structure. o Second, they would have to decide which jobs were to be assigned to which grades. o Third, they would have to determine how large a difference in pay there would be between grades. o Fourth, they would have to decide how large the difference would be between the minimum and maximum pay rates an employee could earn within a pay grade. Note: Fig 9.3 [Examples of a Grade Structure] Skill-Based Pay • Most pay structures in unionized settings base pay differences on employees’ grades and job classifications. • Skill-based pay (SBP) ties pay to the skills employees have acquired. • Relatively few job classifications exist, and employees can be moved between assignments based on the employer’s needs. • The practice supports team-based production, which blurs job boundaries and, thus, is not found in many unionized plants. Note: Fig 9.4 [Skill-Based Pay Plan Skill Blocks and Progression] Lane-and-Step Plans • In the unionized public sector, lane-and-step plans are often implemented for jobs in which increased education and experience are assumed to be related to productivity or performance differences. • In a lane-and-step system, pay rates are based on the length of an employee’s employment in the organization and on the highest amount of education completed. Note: Fig 9.5 [Example of Lane-and-Step Schedule]
- 11. Chapter 09 - Wage and Benefit Issues in Bargaining 9-7 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. Two-tier Pay Plans • Two-tier pay plans lower wage costs through a decreased starting rate for new hires. • Two types of two-tier pay plans exist. o One starts employees at a lower rate and requires more time than for present employees to reach top rates. o The other creates a permanent differential under which new hires will never earn the current top rate. • Successful implementation of these plans requires careful employee communications and assurances that job security will be enhanced. • Two-tier pay plans are more prevalent in unionized firms and have usually been negotiated without significant management concessions. • Airlines justified two-tier plans as aligning their pay rates more closely to comparable jobs in the market for persons with equivalent skill levels. • In the 2007 auto negotiations, the companies won the right to start new employees in noncore jobs at lower pay rates than current employees receive in return for limited job security. • Given longer-run employee dissatisfaction with these plans and their relatively low returns, it is no surprise that they have not been widely adopted. • Management may face problems, in that employees doing equal work will receive unequal pay. • Dissatisfaction may also occur if employees compare their outcomes given effort unfavorably with others in the firm. Pay Form • Pay components not received in cash are received as either insurance or deferred compensation. Insurance typically includes hospital and medical coverage, life, disability, and dental benefits. • Nonmonetary wage forms have advantages and disadvantages. • For the employee, the benefit of the form depends partly on usage. • When the company directly purchases medical insurance, the value is not reported as income to the recipient. • Employers are increasingly concerned about the form of pay for all employees because contracts often specify the amounts of insurance coverage rather than employer contributions. • Health care, pensions, and retiree health care benefits have been the most contentious items in contract negotiations since the beginning of the 2000 decade. There is substantially more complexity and uncertainty surrounding benefits than there is for cash compensation. • The rate at which wages and benefits grew between 2001 and 2012 is showing a growth trend, especially for the government sector. During
- 12. Chapter 09 - Wage and Benefit Issues in Bargaining 9-8 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. this period union coverage in the private sector fell while increasing in the public sector. Note: Fig 9.6 [Benefit Cost Index (2001-12)] Wage-and Pension-Tied Benefits • The costs of some benefits (e.g., vacations and holidays) and statutory payments (social security and Medicare payroll taxes) are essentially a function of wages. The cost of these is directly proportional to the wage each employee earns. • Some other benefits such as health insurance are person-tied; that is, the cost to the employers is linked to the number of employees, not the level of their pay. • Other benefits are tied to a combination of person and wage characteristics such as disability, life insurance and pension plans. Health Insurance • Rising health care costs have been an increasing problem for employers; employees; unions; members of the public; and federal, state, and local governments. • Between 1983 and 2011, the rate of increase in employer-provided health care benefits rose 2.75 times the overall rate of inflation as measured by the consumer price index (CPI). • Even if health care inflation were to be contained, the aging of the baby boom cohort will inexorably increase the footprint of the health care sector over the next 20 to 30 years. Note: Fig 9.7 [Average Annual Worker and Employer Contributions for Family Coverage] • From an employer standpoint, the increasing magnitude of health care costs and the uncertainty surrounding their annual rate of change make it difficult to control and predict future labor costs. Since health care benefits are a person-based benefit, if health care costs increase faster than wages, employers will become increasingly reluctant to hire additional employees, all else being equal. • Given employers’ desires for certainty or predictability in costs during the term of a contract, they would prefer to include a specific amount of premiums to be paid per employee in each year of the contract, shifting the risk of possible premium increases beyond the negotiated amount to the employees. • In practice, most large employers that offer health care benefits to employees do not purchase health insurance, but rather self insure, since the cost of health care, like wages, is a usual cost of doing business.
- 13. Chapter 09 - Wage and Benefit Issues in Bargaining 9-9 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. • Insurers handle the paperwork involved in the plan and bill the company for covered services. If billings exceed what the employer anticipated, it will essentially experience a health care “insurance premium” increase as a result. • If an employer provides a specific package of health care benefits and if the costs increase faster than wages, labor costs will escalate more rapidly than expected during the term of a multiyear collective bargaining agreement. • Additional complexities are introduced by provisions in the PPACA that require employers who provide health insurance to extend it to all workers who are employed for 30 or more hours per week. Table 9.3 compares costs for workers with a 30 hour schedule to those working a 29 hour schedule. Under the PPACA requirements, an employer would be expected to eliminate the 32-hour workers and replace them with 29- hour workers and would increasingly substitute overtime work for full- time workers if health care costs continue to inflate faster than wages. • Because federal wage and hour laws require that certain employees receive a 50 percent premium for working more than 40 hours per week, an employer would generally reduce costs by hiring new employees when more work is needed. However, if person-tied benefits such as insurance and paid time off exceed 50 percent of base pay, an employer would prefer overtime unless the contract requires a higher premium. Thus, increasing person-tied benefits restricts new hiring. • Health care cost containment has increased in importance for both parties. Note: Table 9.3 [Cost per Employee for Wage and Health Care Increases] Patient Protection and Affordable Care Act of 2010 (PPACA-Obama Care) • The PPACA was signed into law by President Obama on March 23, 2010. Some provisions of the law began to take effect six months later on September 23, 2010. Additional provisions will become effective on succeeding anniversaries through 2018. • Going forward, the PPACA substantially changes the health care environment and that latitude that management that labor have in crafting worker health care coverage. • Several of the provisions that took effect in 2010 resulted in immediate cost increases for employers that offer health care plans and other provisions that were to become effective in 2014 but were postponed to 2015 (after the midterm elections) may lead to additional employer borne costs or could provide an incentive for employers to drop or negotiate to drop health care coverage and pay the consequent penalties instead. Note: Table 9.4 [Major Provisions of PPACA Affecting Employers]
- 14. Chapter 09 - Wage and Benefit Issues in Bargaining 9-10 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. • The PPACA permits current collectively bargained plans limited “grandfathered” status, but certain provisions must be added, even to grandfathered plans and it may become difficult for a plan to remain grandfathered. • Management in particular may need to negotiate provisions enabling the health care benefit provisions in the contract to be reopened for further negotiations as changes are mandated and regulations shift. • Requirements for affordability that become effective in 2014 may provide a floor from which unions can negotiate while the “Cadillac” tax imposed in 2018 will create a benefit ceiling, especially if cost escalation continues at its recent rate. • The PPACA remains controversial and the effects of its implementation are yet to be fully known. o In the short run, the 30 hour part- full-time cutoff for eligibility for coverage is likely to reduce employment for persons working 30-40 hours and increase overtime and part-time employment of less than 30 hours. o For health care workers, bargaining power will be reduced since reimbursements for Medicare providers will be cut as the law is increasingly implemented. o In the longer run, entry into health care occupations may be reduced given increasing government involvement as a monopsonist in the pricing of health care purchases. o Even strong union proponents of its passage have exhibited alarm about the potential negative effects of the will have on them if implemented as currently planned. Note: Exhibit 9.2 [Unions Realize Side Effects of ObamaCare] ▪ Both Richard Trumka, head of the AFL-CIO, and Joe Hansen, head of the Change-to-Win coalition are having second thoughts about some of the provisions contained in ObamaCare and the implementation glitches that are postponing the employer mandate requirement until 2015. ▪ Besides having an impact on employers, ObamaCare will affect the operation and costs of union-sponsored multi- employer health care plans, covering members in a variety of jobs employed across a relatively large number of smaller employers. The employee contributions required by these plans will likely seem “unaffordable” to low wage employees who will not be eligible for insurance subsidies insurance is not provided by their employers. ▪ Mr. Trumka also calls the one-year delay in implementing the employer mandate a “significant handout to employers”; and Mr. Hansen calls out the president’s promise in 2009 that union employees would be able to
- 15. Chapter 09 - Wage and Benefit Issues in Bargaining 9-11 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. keep their insurance under the proposed law as “simply not true for millions of workers.” ▪ Some unions are calling for a repeal of the law because of concerns over rising costs. Retirement Income Plans • Employees may offer one or more of several types of retirement income plans. o Defined benefit plans specify rules used to determine future pension benefits. o Defined contribution plans specify what the employer will set aside for the employee’s retirement each year. o Salary reduction plans are tax-advantaged and may include a matching contribution from the employer. Note: Table 9.5 [Main Features and Types of Retirement Income Plans] • Before the 1970s, most company-sponsored pensions were defined benefit plans. Pension payments were made from their current revenues. As the number of retirees relative to the number of active employees increased, and as life expectancies were growing longer, expenses for pensions increased much more rapidly than labor costs. Some companies encountered financial difficulties and defaulted on promised pension payments. As a result legislation to regulate private sector pension and insurance benefit plans was developed, introduced and passed in 1974. • Pension plans are regulated by the Employment Retirement Income Security Act (ERISA) of 1974. The law does not require that an employer offer a pension plan, but where one exists, the employer must comply with several rules. • ERISA requires employers with pension plans to allow all employees aged 21 and over to participate. • If the employer has a defined benefit plan, it must make an annual actuarially based contribution that will cover the expected future retirement costs. • A company can choose to terminate a fully funded plan but if it does so, it must provide a payment equal to the amount of pension that would be provided at retirement if the employee were to have the current salary and length of service at retirement. However, it is unlikely that a union would agree, in negotiations, to allow an employer to terminate an existing plan. • Some employers offer a defined contribution plan. These plans contribute a fixed percentage of pay or profits each year to each employee's account. • Before ERISA, companies that had defined benefit plans almost never funded them with an amount equivalent to future liabilities. The law allowed employers 40 years (until 2014) to fully fund an underfunded
- 16. Chapter 09 - Wage and Benefit Issues in Bargaining 9-12 Copyright © 2014 McGraw-Hill Global Education Holdings, LLC. Permission required for reproduction or display. plan. For many large companies, this meant that the relative size of the company’s retiree population could easily become larger than its active population, and the amounts necessary to fully fund the plan would become an increasing amount of compensation expenses. • Companies with these plans also needed to reduce their workforces and one of the typical methods was to offer earlier retirement to long-service employees. This put even more pressure on retirement funding. • Virtually no private sector employer has begun a traditional defined benefit pension plan since ERISA was passed. Currently, employers choose 401(k), 401(a), or 403(b) plans. None of these plans obligates the employer to make any payment or to continue a payment at a particular level, thus substantially reducing the risks associated with traditional pension plans. • There is also no guaranteed benefit with these plans; the employee bears the investment risk. • Pension reform legislation passed in 2006 increases incentives for employers to offer 401(k) plans and to terminate defined benefit plans. Public Sector Defined Benefit Plans • In general, the pension plan options that are available in the public sector are the same as in the private sector with one significant exception: In virtually all states, there are at least some public sector employees who are not included in the social security system because they are enrolled in a state plan that provides benefits to meet or exceed what is available from social security. • Public sector employers are more likely to offer defined benefit than contribution plans as their primary retirement plan. • There is no ERISA requirement that public sector employers maintain pension funding at levels necessary to cover expected future liabilities of their defined benefit plan. • During the recent financial crisis of 2008, it became apparent that many public pension plans were severely underfunded and at some point the legislatures and the taxpayers will either need to reallocate funds from other purposes to pension payments or to increase taxes to meet the obligations. • Unlike in the private sector, where an employer that becomes insolvent can declare bankruptcy and restructure debt, states do not have or need that option because they have sovereign immunity from lawsuits. • Many public sector employers also offer retiree health care benefits. The underfunding in these plans is even more severe than for the pension plans.
- 17. Other documents randomly have different content
- 18. Or rivals new thy 'house' will dispossess, In spite of folks who think the works of Shelley Inferior to romances by Corelli. "Grant Allen hath a 'heaven-sent' tale to tell, But much he fears its utterance would not 'sell' Wherefore, to be quite certain of his cash, He writes (regardless of his 'inspiration') trash; Practical Allen! Noble, manly heart! Wise huckster of small nothings in the mart,— To what a pitch of prudence dost thou reach To feel the 'god,' yet give thy thoughts no speech, All for the sake of vulgar pounds and pence! God bless thee, Allen, for thy common sense! "Health to 'lang' Andrew! Heaven preserve his life To flourish on the sacred shores of Fife! Prosper good Andrew! leanest of the train Whom Scotland feeds upon her fiery grain; Whatever blessings wait a 'brindled' Scot In double portion swell thy glorious lot! As long as Albion's silly sons submit To Scottish censorship on English wit, So long shall last thy unmolested rule, And authors, under thee, shall go to school; Behold the 'Savile' band shall aid thy plan And own thee chieftain of the critic clan. Kipling shall 'butter' thee, and thou sometimes Wilt praise in gratitude his doggerel rhymes, And Haggard, too, thy eulogies shall seek, And for his book another 'boom' bespeak; And various magazines their aid will lend To damn thy foe or deify thy friend. Such wondrous honours deck thy proud career, Rhymester and lecturer and pamphleteer, Known be thy name, unbounded be thy sway, And may all editors increase thy 'pay'
- 19. And may all editors increase thy pay — Yet mark one caution ere thy next review Falls heavy on a female who is 'blue.' Grub-street doth whisper that a 'ladye faire' Intends to snatch thee by the brindled hair And stab thee through thy tough reviewer's skin With nothing more important than a pin— A case of 'table turned' and 'biter bit'; Heaven save thee, Andrew, from a woman's wit! "What marvel now doth Afric's zone disclose? A solemn book of rank blasphemous prose, Writ by a Mistress Schreiner, who elects A Universal Nothing as her text; Whereat the Athenæum, doddering soul! Whimpers about the 'beauty of the whole,' And shrieks, in columns of hysteric praise, How such a work all nations should amaze: 'Nothing has ever been or e'er will be Like Dreams'—produced by the blasphemous She; So writes the Athenæum to the few Who still pay threepence for a bad review, And watch the hatching of the little plots Conceived and carried out by Mr. Watts. Charles Dilke! Come forth from Mrs. Grundy's ban, And show thyself to be the 'leading' man, With one strong effort snap thy social fetter And get thy prosy journal managed better! "Great Oscar! Glorious Oscar! Oscar Wilde! Fat and smooth-faced as any sucking child! Bland in self-worship, crowned with self-plucked bays, Sole object of thine own unceasing praise, None can in 'brag' thy spreading fame surpass, And thou dost shine supreme in native brass. Thou hast o'erwhelmed and conquered dead Molière With all the mots of Lady Windermere;
- 20. t a t e ots o ady de e e; Thou hast swept other novelists away With the lascivious life of 'Dorian Gray.' Thine enemies must fly before thy face, Thou bulky glory of the Irish race! Desert us not, O Wilde, desert us not, Because the Censor's 'snub' 'Salome' got, Still let thy presence cheer this foggy isle, Still let us bask in thy 'æsthetic' smile, Still let thy dwelling in our centre be; England would lose all splendour, losing thee! Spare us, great Oscar, from this dire mischance! We'll perish ere we yield thee up to France! "Wise Hardy! Thou dost gauge the modern taste: Hence on man's Lust thy latest book is based— A story of Seduction wins success, Thus hast thou well deserved thy cash for 'Tess.' Pure morals are old-fashioned—Virtue's name Is a mere butt for 'chaff' or vulgar blame, But novels that defy all codes and laws Of honest cleanness, win the world's applause, And so thy venture sails with favouring winds, Blest with approval from all prurient minds. "See where at Horsham, Shelley's muse is crown'd! Two Parsons and a Justice on the ground! What glorious homage doth 'Prometheus' win!— Yet sure if ever parted ghosts can grin, Wild laughter from the Styxian shores must wake At such tame honours for the dead bard's sake; An Edmund Gosse doth make the day's oration, Oh, what a petty mouthpiece for a Nation! And William Sharp, face-buried in his beard, Thinks his own works should be as much rever'd As Shelley's, if the world were only wise And viewed him with his own admiring eyes;
- 21. And Little (Stanley) doth with Gosse combine To judge the perish'd Poet line by line, Granting his 'lyrics' admirably done, (Though they could match him easily, each one,) But, on the whole, he filled his 'mission' well; 'Agreed!' says Chairman Hurst, J.P., D.L.! "O Shelley! my companion and my friend, Brother in golden song, is this the end? Is this the guerdon for thy glorious thought, Thy dreams of human freedom, lightning-fraught? No larger honours from the world's chief city, Save this half-hearted, slow and dull 'Committee'? Where Names appear upon the muster-roll But only Names that lack all visible soul; Conspicuous by his absence, Tennyson, The Horsham 'In Memoriam' doth shun; Next, Henry Irving's name doth much attract (That 'glory' of the stage who cannot act) But even he, the Mime, keeps clear away From personal share in such a 'got-up' day,— And not one 'notable' the eye perceives, Save the Methusaleh of song, Sims Reeves; Alas, dear Shelley! Hast thou fallen so low? And must thy Genius such dishonour know? Is this the way thy Centenary's kept? Better go unremembered and unwept Than be thus 'celebrated' in a hurry, And get 'recited' by an Alma Murray! "Now hold, my Muse, and strive no more to tell The public what they all should know full well; Zeal for true worth has bid me here engage The host of idiots that infest the age And spin their meagre prose and verse for hire, Libelling genius if it dare aspire. Let harmless Barrie scrawl a Scottish tale
- 22. Let harmless Barrie scrawl a Scottish tale And English ears with 'dialect' assail, Let William Archer judge, and bearded Sharp Condemn his betters, enviously carp At living bards (if any), one and all, Such is the way of versifiers small; Let Morris whine and steal from Tennyson, The poet King, whose race is nearly run, Let Arnold drivel on, and Swinburne rave, And godly Patmore chant a stupid stave, Let Kipling, Caine, and Hardy, and the rest, And all the women-writers unrepressed, Scrawl on till death release us from the strain, Or Art assume her highest rights again; Let Henley, to assert his tawdry muse, Damn other bards by scurrilous reviews, Feeding with rancour his congenial mind, Himself the most cantankerous of his kind; Let Andrew Lang undaunted, take his stand Beside his favourite bookstalls, secondhand; Let 'Pseudonyms' appear in yellow pairs, Let careful Stannard sell her 'Winter' wares, Let Watts 'puff' Swinburne, Swinburne bow to Watts, And Shakespeare be disproved by Mrs. Potts; Let all the brawling folly of the time Find vent in vapid prose and vulgar rhyme; Let scribblers rush into the common mart With all their mutilated blocks of art, And take their share of this ephemeral day With Collins and her 'Ta-ra-Boom-de-ay'; And what their end shall be, let others tell; My time is up and I must say farewell, Content at least that I have once agen Poured scorn upon the puny writing men That chaffer for the laurel wreath of fame, And think their trash deserves a lasting name. Immortal I behold the passing show
- 23. Immortal, I behold the passing show Of little witlings ruling things below, And smile to see, repeated o'er and o'er, The literary tricks I lash'd before, And lash again, with satisfaction deep; And other 'rods in pickle' I shall keep For those who on my memory slanders fling, Envying the songs they have no power to sing! "Gods of Olympus! Comrades of my thought, Where is the fire that once Prometheus brought To light the world? It warmed my ardent veins, And still the nations echo forth my strains; Greece still doth hold me as her minstrel dear And decks with fragrant myrtle boughs my bier— England forgets—but England is no more The England that our fathers loved of yore— A huckster's stall—a swarming noisy den Of bargaining, brutal, ignorant, moneyed men— England, historic England! She is dead, And o'er her dust the conquering traders tread, Crowning with shameful glory on her grave, Some greasy Jew or speculating knave; While blundering Gladstone, double-tongued and sly, Rules; the dread 'Struldbrug,'[2] who will never die! "Thus far I've held my undisturbed career Prepared for rancour—spirits know not fear! Catch me, a Ghost, who can! Who knows the way? Cheer on the pack! The quarry stands at bay; Unmoved by all the 'Savile' logs that roll— I stand supreme, a deathless poet-soul— Careless of Lang's resentment, Gosse's spite, Swinburne's small envy, Arnold's judgment trite, Henley's weak scratch, or Pall Mall petty rage, Or the dull Saturday's unlessoned page— Such 'men in buckram' shall have blows enough,
- 24. Suc e buc a s a a e b o s e oug , And feel they too are 'penetrable stuff,' And by stern Compensation's law shall be Racked on the judgment-wheel they meant for me! "Adieu! Adieu! I see the spectral sail That wafts me upwards, trembling in the gale, And many a starry coast and glistening height And fairy paradise will greet my sight, And I shall stray through many a golden clime Where angels wander, crowned with light sublime; When I am gone away into that land Publish at once this ghostly reprimand, And tell the puling scribblers of the town I yet can hunt 'boomed' reputations down! Yet spurn the rod a critic bids me kiss, Nor care if clubs or cliques applaud or hiss, And though I vanish into finer air The spirit of my Muse is everywhere; Let all the 'boomed' and 'booming' dunces know Byron still lives—their dauntless, stubborn Foe!" Enunciating the last two lines with tremendous emphasis, the noble Ghost folded up his scroll. I noticed that in the course of his reading he frequently repeated his former self, and borrowed largely from an already published world-famous Satire; and I ventured to say as much in a mild sotto voce. "What does that matter?" he demanded angrily. "Do not the names of the New school of literary goslings fit into my lines as well as the Old?" I made haste to admit that they did, with really startling accuracy of rhythm. "Well, then, don't criticise," he continued; "any ass can do that! Write down what I have read and publish it—or——"
- 25. What fearful alternative he had in store for me I never knew, for just then he began to dissolve. Slowly, like a melting mist, he grew more and more transparent, till he completely disappeared into nothingness, though for some minutes I fancied I still saw the reflection of his glittering laurel wreath playing in a lambent circle on the floor. Awed and much troubled in mind, I went to bed and tried to forget my spectral visitor. In vain! I could not sleep. The lines recited by the disembodied Poet burned themselves into my memory as he had said they would, and I had to get up again and write them down. Then, and not till then, did I feel relieved; and though I thought I heard a muttered "Swear!" from some a "fellow in the cellarage," I knew I had done my duty too thoroughly to yield to coward fear. And I can only say that if any of the highly distinguished celebrities mentioned by the ghost in his wrathful outburst feel sore concerning his expressed opinion of them, they had better at once look up a good "medium," call forth the noble lord, and have it out with him themselves. I am not to blame. I cannot possibly hold myself responsible for "spiritual" manifestations. No one can. When "spooks" clutch your hand and make you write things, what are you to do? You must yield. It is no good fighting the air. Ask people who are qualified to know about "influences" and "astral bodies" and other uncanny bits of supernatural business, and they will tell you that when the spirits seize you you must resign yourself. Even so I have resigned myself. Only I do not consider I am answerable for a ghost's estimate of the various literary lustres of the age:— "Byron's opinions these, in every line; For God's sake, reader, take them not for mine!" FOOTNOTE: [2] The "Struldbrugs" were a race of beings who inhabited the "Island of Laputa," and were born with a spot on the forehead, a
- 26. sign which indicated their total exemption from death. (See Dean Swift's "Gulliver's Travels.") XX. MAKETH EXIT.
- 27. XX. MAKETH EXIT. The hour grows late, dear friends, and I am getting bored. So are you, no doubt. But though, as I said in the beginning, I take delight in boring you because I think the majority of you deserve it, I have an objection to boring myself. Besides, I notice that some of you have begun to hate me; I can see a few biliously-rolling eyes, angry frowns, and threatening hands directed towards my masked figure, as I leisurely begin to make my way out of your noisy, tumultuous, malodorous social throng. Spare yourselves, good people! Keep cool! I am going. I have had enough of you, just as you have had enough of me. I told you, when I first started these "remarks aside," that I did not wish to offend any of you; but it is quite probable that, considering the overweening opinion you have of your own virtues and excellencies, you are somewhat thin-skinned, and apt to take merely general observations as personal ones. Do not err in this respect, I beseech you! If any fool finds a fool's cap that fits him, I do not ask him to put it on. I assure you that for Persons I have neither liking nor disliking, and one of you is no more and no less than t'other. Loathe me an' you choose, I shall care little; love me, I shall care less. Both your loathing and your love are sentiments that can only be awakened by questions of self-interest; and you will gain nothing and lose nothing by me, as I am the very last person in the world to be "of use" to anybody. I do not intend to be of use. A useful person is one who is willing to lie down in the mud for others to walk dryshod over him, or who will amiably carry a great hulking sluggard across a difficulty pick-a-back. Now, I object to being "walked over," and if any one wanted to try "pick-a-back" with me, he would find himself flung in the nearest gutter. Wherefore, you observe, I am not "Christianly" disposed, and should not be an advantageous acquaintance. Though, if I were to tell you all the full
- 28. extent of my income, I dare say you would offer me many delicate testimonies of affectionate esteem. Sweet women's eyes might smile upon me, and manly hands might grip mine in that warm grasp of true friendship which is the result of a fat balance at the banker's. But, all the same, these attentions would not affect me. I am not one to be relied upon for "dinner invitations" or "good introductions," and I never "lend out" my horses. I keep my opera-box to myself too, with an absolutely heartless disregard of other people's desires. I learned the gospel of "looking after Number One" when I was poor; rich folks taught it me. They never did anything for me or for anybody else without a leading personal motive, and I now follow their wise example. I live my life as I choose, thinking the thoughts that come naturally to me, my mind not being the humble reflex of any one morning or evening newspaper; so I am not surprised that some of you, whose opinions are the mere mirror of journalism, hang back and look askance at me, the while I pass by and take amused observation of your cautious attitudes through the eye-holes of my domino. Certes, by all the codes of social "sets" you ought to respect me. I am the member of a House, the adherent of a Party, and the promoter of a Cause, and your biggest men, both in politics and literature, know me well enough. I might even claim to have a "mission," if I were only properly "boomed"—that is, of course, if the Grand Old Struldbrug, as the irreverent ghost of Lord Byron calls him, Gladdy, were to rub his noddle against that of Knowles, and emit intellectual sparks about me in the Nineteenth Century. But I don't suppose I could ever live "up" to such a dazzling height of fame as this. It would be a wild jump to the topmost peak of Parnassus, such as few mortals would have strength to endure. So on the whole I think I am better and safer where I am, as an "unboomed" nobody. And where am I? Dear literary brothers and sisters, dear "society" friends, I am just now in your very midst; but I am retiring from among you because—well, because I do not feel at home in a human menagerie. The noise is as great, the ferocity is as general, the greed is as unsatisfied, and the odour is as bad as in any den of the lower animals. I want air and freedom. I would like to see a few real men and women just by way of a change—men who
- 29. are manly, women who are womanly. Such ideal beings may be found in Mars perhaps. Some scientists assure us there are great discoveries pending there. Let us hope so. We really require a new planet, for we have almost exhausted this. And now adieu! Who is this that clutches me and says, will I unmask? What, Labby? Now, Labby, you know very well I would do anything to please you; but on this occasion I must, for the first time in my life, refuse a request of yours. Presently, my dear fellow, presently! The domino I wear shall be flung off in your pleasant study in Old Palace Yard on the earliest possible occasion. Believe it! It would be worse than useless to try to hide myself from your eagle ken. The "lady with the lamp" on the cover of Truth shall flash her glittering searchlight into my eyes, and discover there a friendly smile enough. Meanwhile, permit me to pass. That's kind of you! A thousand thanks! And now, with a few steps more, I leave the crowd behind me, and, loitering on its outskirts, look back and pause. I note its wild confusion with a smile; I hear its frantic uproar with a sigh. And with the smile still on my lips, and the sigh still in my heart, I slowly glide away from the social and literary treadmill where the prisoners curse each other and groan—away and back to whence I came, out into the wide open spaces of unfettered thought, the "glorious liberty of the free." I wave my hand to you, dear friends and enemies, in valediction. I have often laughed at you, but upon my soul, when I come to think of the lives you lead, full of small effronteries and shams, I cannot choose but pity you all the same. I would not change my estate with yours for millions of money. Many of you have secured what in these trifling days is called fame; many others rejoice in what are pleasantly termed "world-wide" reputations; but I doubt if there is any one among you who is as thoroughly happy, as careless, as independent, and as indifferent to opinion, fate, and fortune, as the idle masquerader who has strolled casually through your midst, seeking no favours at your hands, and making no apologies for existence, and who now leaves you without regret, bidding you a civil "Farewell!"
- 30. Remaining in unabashed candour and good faith, one who is neither your friend nor enemy, THE SILVER DOMINO. The Gresham Press, UNWIN BROTHERS, CHILWORTH AND LONDON.
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