Wage inequality has been historically an issue not only in the United States but worldwide. The Bureau of Labor Statistics data from May 2020 shows that for some occupations in the state government, such as correctional officers, administrative assistants, and teaching assistants, the annual mean average falls below the US average salaries. In Wagner's (2022) article, he claims that "the Bureau of Labor Statistics had indicated that the gap has slowly trended downward, with federal workers earning 22.47% less on average than private sector workers in similar jobs in 2021". Collective bargaining, among other things, aims to regulate working salaries and address the pay disparity in the public sector. It helps establish pay standards for those who perform similar jobs. Mishel (2021) claims that "collective bargaining increases and equalizes wages for union workers and nonunion workers in unionized occupations and sectors." However, trends are showing a decline in unionization, which widens the salary disparity in the industry. The U.S Department of Treasury shares the same sentiment that "over the subsequent decades, union membership steadily declined, while income inequality began to steadily rise." The research featured in Mishel (2021) shows that the median wage in 2017 could have potentially been 8% higher if there was no decline in union, and about 12% increase in men's median wage had there been no erosion in union. Since the union negotiates wage increases, understandably, its decline also equates to slow progression of wages. The union's responsibility is to target raises to compensate especially for those in the low-paid industries. The collective bargaining not only helps increase wages but also advocate for transparency of pay scales to limit wage discrimination.

DC37, New York City's largest public employee union, recently ratified its contract, which previously ended in May 2021. For almost three years the city employees did not have a contract in place and were at pre-pandemic salaries. With the increase in cost of living brought about by the pandemic, the wages, especially for those in those lower income bracket, were not enough. The low- and middle-income industry workers were generally not able to secure substantial wage increases because of the pandemic and inflation in recent years. The 3% retroactive compounded salaries put them at competitive salaries and lessened the prevailing wage gap. According to Bureau of Labor Statistics (BLS) data, for the covered employment and wages in the United States and New York County, first quarter 2022, the government employees had a weekly wage average change of 4.5% in the US government industry vs. 6.9% in the private industry. However, in New York alone, there is a change of 1.9% in the private industry vs. 9.6% in the government industry. That is a good indication of how collective bargaining works to increase the wages and close the wage gaps. Over a period of time, collective bargaining has made the salaries higher than it would have been otherwise in the same conditions of the market. It empowers the employees to push for the changes they want to see and protects the rights of the employees, especially those who are underrepresented.

Collective bargaining is the process in which employers and labor unions negotiate the conditions and terms of employment for workers represented by the union. The process usually shapes the landscape regarding pay, benefits, hours of work required, performance, and other job-related provisions. "Negotiation between the union and management on wages, working conditions, and grievances is practiced through varying degrees in public employment" (Spero, 2007, p. 314). The goal of collective bargaining is for the parties to mutually agree on the conditions and terms of the work of the unionized workers. In other words, collective bargaining is when a group of workers, usually represented by a union, negotiate with the employer to decide things like pay, working hours, benefits, and other job-related issues; and then agree on what's fair for both parties.

This interaction between employers and labor unions is more prevalent in the public sector and can yield both positive and negative outcomes. One of the positive outcomes is the assurance for employees to receive fair wages that can depend on their skills, experience, length of employment, and the cost of living. This in turn helps attract and retain qualified personnel. Another positive outcome is the power to advocate for improved working conditions, such as better safety standards, better work hours, and better benefits. This leads to a more satisfied and productive workforce. A third positive outcome is the ability to provide job stability and equity as it outlines the terms of employment and addresses matters of pay inequity and discrimination. This helps to ensure that pay is distributed fairly among employees regardless of gender, race, sexual orientation, etc.

Just like collective bargaining can ensure fair pay, fair treatment, and improved working conditions, it can also create challenges that can impact the effectiveness of how work is performed and delivered. The relationship between the employer and the employee inevitably gives rise to disagreements which produce grievances (Spero, 2007). One of the negative outcomes is that the increase in wages and benefits can strain government budgets. This can result in pressure to raise taxes or cut other services to compensate for the added expense. Another negative outcome is the challenges faced when a change or modification is needed in the collective bargaining agreement. Even if the change is to improve production or performance, it can be difficult to agree to make changes to the agreement regarding work rules, staffing, or any other provision. "Two separate reports by the MTA Inspector General determined the labor agreements at the LIRR are so restrictive and expensive that it makes it virtually impossible to run the railroad in a cost-effective manner" (Hicks, 2023). A third negative outcome is the conflict and inefficiency that can result from strikes and the lack of flexibility when addressing underperformance. According to Spero (2007, p.314), the strike is the basic union weapon in negotiations. Strikes strains relationships, disrupts service, and generates distrust.

An empirical example of collective bargaining is the Long Island Rail Road (LIRR), a subsidiary of the Metropolitan Transit Authority (MTA). The LIRR is a commuter rail system serving the Long Island region of New York and the busiest commuter railroad in North America, carrying approximately 200,000 customers each weekday on 947 daily trains. The article "How union muscle keeps expensive rules, high fares in place on LIRR" (Hicks, 2023), highlights the power of labor unions and how through collective bargaining agreements, they contribute to maintaining expensive work rules and higher fares for commuters. "Rail workers are among a select group of state employees who retain the right to strike thanks to federal law and they've walked off the job dozens of times since Albany took over the LIRR in the 1960s" (Hicks, 2023). The article points out that while labor unions advocate for the interests of its members, the resulting work rules often lead to inefficiencies and increased costs for the transit agency. This rigidity then forced the LIRR to raise fares to cover these expenses. In the end, the affected party are the commuters who rely on the rail service as their main means of transportation.

Critically reflect on the negative and positive outcomes of collective bargaining in the public sector on wages and performance. Refer to the readings and draw from public sector empirical examples to explain its viewpoint on collective bargaining.