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Tuesday, January 05, 2010 3:01 PM


Showdown in Cleveland: Unions Refuse Nominal Pay Cuts


In typical fashion, and not understanding how well off they are compared to the private sector, unions have rejected nominal salary concessions in Cleveland.

Please consider Cleveland Unions Have One Week To Accept Concessions Or Face Layoffs.

Cleveland Mayor Frank Jackson plans to follow through on layoff notices issued late last month unless unions agree to sacrifices. Ideastream’s Bill Rice reports.

The mayor sent a total of about 160 layoff notices out just before Christmas in order to meet the a two- week notification deadline to cut employees loose after next Monday. At that time, the Cleveland Fraternal Order of Police – which represents supervisors - had rejected the mayors’ proposed concessions. Shortly after that, the Patrolman’s Union followed suit, as did the EMS union. Those votes will mean the city will lay off just under a hundred officers and paramedics, and demote several higher ranking police personnel.

Jackson has asked all union employees to make concessions equaling a 4.17 percent across the board pay cut. He calls the proposed concessions an opportunity to preserve jobs, and says it’s up to the unions to decide whether there will be layoffs.

Jackson: “Realistically I’ve been able to give them a proposal that would avert layoffs, that would not impact their membership. And those who choose to go along with that, then that is what will happen. Those don’t, the effective date of the layoff is in mid-January.”
Jackson Overly Generous

Jackson is too generous. A 4.17% pay cut is just a down payment for what needs to happen. Unless and until public unions give up defined benefit plans along with agreeing to wages that will not bankrupt cities, these meager cuts will not solve anything.

Jackson's starting point should be more along the lines of 20% pay cuts and termination of defined benefit pension plans for new hires.

Eventually it is going to come to something like that, so why not ask for it upfront? The other reasonable alternative is for Cleveland to declare bankruptcy and let the unions see what they can get in bankruptcy court.

"Mark" who sent me the link writes:
Amazingly enough, cities, counties and states are coming to the conclusion that, if you don't have any money, you can't pay anyone to work for you.

How's that for Economics 101?

I wish the federal government would sign up for this "adult refresher course" as well.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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