Contracts settled through collective bargaining last year provided workers average annual wage increases of 3.3 percent over the life of the pacts, the government said today. The Labor Department said 1989 was the first time since 1981 that negotiated settlements provided larger wage adjustments than the contracts they replaced. The last time parties to 1989 settlements negotiated, usually in 1986 or 1987, average wage rate adjustments were 2.4 percent over the contract term. Wage restorations in steel and other industries, as well as wage gains for nurses, accounted for the difference, the agency said. Last year's 3.3 percent wage gains also were up from the 2.4 percent average wage gains contained in collective bargaining agreements settled in 1988. The collective bargaining report, like the Labor Department's broader Employment Cost Index report, showed workers in the fast-growing service sector winning larger wage gains than manufacturing workers. Service workers received an average of 3.5 percent hikes over the life of the contracts while manufacturing workers received 3.2 percent raises. The Labor Department said the 459 collective bargaining agreements it analyzed covered about 1.85 million workers. The government tracks agreements covering bargaining units with at least 1,000 workers. The government said 114 such contracts covering 743,000 workers had been expired or reopened in the last quarter but had not been settled or ratified by Dec. 31. About half of those workers are employed in railroads.