Plan by ‘Boston Globe’ To Tie Raises to Revenue Could Be Felt Elsewhere

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The Boston Globe wants to tie future wage increases for its largest union to revenue gains – an apparently unprecedented step in the newspaper business and an unusual move in any industry.

But observers say contract language similar to that proposed by the Globe and rejected by its biggest union this week could emerge in talks elsewhere, as other newspapers try to limit wage obligations in case financial conditions don’t improve.

Even a leader of a major union representing newspaper workers concedes that tying wages to revenue gains may become an unpleasant reality, if it can aid the survival of newspapers most at risk of failing financially.

“We’re not opposed to those kinds of concepts,” said Bernard Lunzer, secretary-treasurer of The Newspaper Guild-Communications Workers of America, said in a phone interview Friday. “Along with the employers, we want to see the industry reshape itself. We know there are legitimate money concerns.”

Boston Newspaper Guild members voted 307-223 on Wednesday to reject a proposed four-year contract that would cover more than 1,000 Globe reporters, editors, advertising sales staff and ad designers, circulation managers, and other staff.

The dispute has drawn the interest of Boston area political and labor leaders. On Thursday, about two dozen leaders including Sen. Edward Kennedy, D-Mass., sent a letter to the Globe’s owners, The New York Times Co., urging company Chairman Arthur Sulzberger Jr. to “invest in The Boston Globe and invest in the future of Globe employees– rather than look for new ways to get by with less and less.”

The Globe’s proposal would grant periodic pay increases only if revenue meets or exceeds the level in the same period a year earlier — provisions agreed to by other Globe unions earlier this year.

But the wage-revenue tie-in isn’t the Boston Newspaper Guild’s only beef. The formula that would determine whether wage hikes kick in would include only revenue at the Globe’s print newspaper, not at its http://www.boston.com Web site _ an area with potential for more rapid growth than the newspaper.

Edward Atorino, a newspaper industry analyst with the brokerage Benchmark Co., said the Globe has seen steeper declines in print circulation and advertising revenue than most U.S. papers recently, so it’s not entirely surprising to see management propose a wage-revenue tie-in.

The New York Times Co. on Thursday reported that advertising revenue for its New England Media Group — led by the Globe — fell 10 percent in the first nine months of this year compared with the same period a year earlier, while circulation revenue fell 6.2 percent.

But Atorino said it’s doubtful wage-revenue tie-in will remain intact should the Globe’s management eventually come to terms with The Boston Newspaper Guild, in part because such a step is believed to be unprecedented at a unionized U.S. newspaper.

“It’s too radical,” he said.

A more likely outcome, Atorino said, is a contract guaranteeing workers very small annual wage increases, but making any additional pay above a certain level contingent on meeting revenue targets.

“This is going to be a revolutionary negotiation, in that the management is asking employees to basically save the paper, give up some guaranteed income, and tie their pay to the performance of the newspaper,” he said.

There is some precedent for U.S. labor contracts tying pay increases to revenue gains — U.S. automakers took that approach when they faced financial crises in the 1980s, for example.

But such provisions are practically unheard of across all unionized industries, said Tom Juravich, a professor and director of The Labor Center at the University of Massachusetts-Amherst.

“We’ve really only seen them in cases of dramatic downturns in the economy when industries are in big trouble,” Juravich said.

The union has asked the newspaper for new negotiations.

In response to the letter from political leaders, the newspaper’s parent company on Friday issued a statement from Globe Publisher Steve Ainsley, who was named to the post last month to replace Richard Gilman, who retired.

“The Boston Globe, one of the nation’s greatest newspapers, remains committed to providing its readers with the high-quality journalism for which it is known,” Ainsley said.

Under the Globe’s current contract, top-scale reporters make nearly $1,400 per week.

Boston Newspaper Guild leaders worry that the Globe’s future revenue will fall short of levels needed to trigger wage increases, especially with the paper’s circulation dropping.

Circulation was more than 397,000 on weekdays and 604,000 on Sundays as of March 31, compared with more than 434,000 weekdays and nearly 673,000 Sundays as of March 31, 2005.

Given such numbers, the Globe’s attempt to tie wages to revenue is unsurprising, said Tobe Berkovitz, interim dean of Boston University’s College of Communication.

“This is probably the first of what are going to be many tough contract proposals from all sorts of different newspapers,” he said. “All of journalism, but in particular the newspaper industry, is being hammered by Wall Street demanding high profit levels, so the media corporations are doing everything in their power to cut back and show higher profit levels.”

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