Company 1’s Negotiation Ceiling is $17.60. If the top of the Negotiation Ceiling is below labor’s demand, labor strikes. At the end of the strike the two sides will settle halfway between the company’s Negotiation Ceiling and labor’s demand, or at $20.80 (figure below). Strike lengths depend on the spread between positions.
The maximum length of a strike is 84 days, at which point both sides accept arbitration. Workers will strike approximately seven days for every:
- $1.00 difference in wages
- $300.00 difference in benefit package
- Percentage point difference in Profit Sharing
- Percentage point difference in Annual Raise
Table 7.1 illustrates a strike example. Strikes always occur at the end of the year. If a strike is 46 days long, workers would picket from the middle of November to the end of December.