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USW rejects U.S. Steel's variable bonus proposal

Thousands march along Broadway en route to the gates of U.S. Steel and then a United Steelworkers rally in Gary in 2015. The steelmaker and union are again negotiating a new contract.

The United Steelworkers union rejected a proposal by U.S. Steel for variable bonuses instead of pay raises.

Steelworkers at Gary Works, East Chicago Tin, the Midwest Plant in Portage and other U.S. Steel mills around the country haven't seen any increase in pay in six years, after the union conceded to keep wages flat during a serious downturn in the industry in the last round of contract talks.

"We made it clear to the company that wage increases must be part of our new agreement and that we aren't interested in the types of variable bonuses schemes that the company has been proposing in place of hourly increases," the United Steelworkers union said in an update to its members. "We simply can't rely on hypothetical income when our families have ever-increasing living expenses that we have to meet."

The union points to U.S. Steel's surging profitability now that steel prices have climbed over $900 a ton. The steelmaker announced last week it would invest at least $750 million in modernizing Gary Works over the next years, to ensure it's productive enough to capitalize off the higher steel prices.

"We already agreed to go three years without an hourly wage increase," the union said in an update to members. "We know that made sense in 2015, but these are very different times. Even while our wages were frozen, U.S. Steel management revised their compensation programs and gave themselves bonuses while the company lost money. Now that the company is in a position to do well in the coming years, we must make sure that workers also share in that prosperity. We'll need you to stand with us to make that happen."

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The contract talks in Pittsburgh have been focusing increasingly on wages and benefits.

"Local issue discussions are wrapping up," USW said in an update to members. "The company has been slow to move in many cases, but we are making progress in some areas."

Despite boom times in the highly cyclical steel industry, U.S. Steel and ArcelorMittal have been asking for concessions, pointing to long-term competitiveness. 

"U.S. Steel gave us a proposal that would make health care costs burdensome for current retirees and nearly impossible for future retirees," USW said in an update to members. "We have rejected that proposal in its entirety."

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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.