Global Economic
Trend Analysis

Recent Posts

Wednesday, December 30, 2009 2:46 AM

Union Battles In Las Vegas, Simi California, Hawaii, Massachusetts

Mish Moved to MishTalk.Com Click to Visit.

Union battles over benefits are starting to appear all over the place. Here are a few stories from the past two days.

Las Vegas: City firefighters launch campaign against cutbacks

Las Vegas’ firefighters union has taken a hard stance against the city’s budget cuts, alleging that reductions will hurt emergency responses along with fire insurance rating for homes and businesses.

City officials, meanwhile, said the union is engaging in irresponsible “scare tactics” at a time when the city is facing economic difficulties.

The back-and-forth comes as the city readies for a series of town hall meetings scheduled from January to March to hear resident feedback on what city services are most important.

It also comes as the city is considering back-to-back 8 percent salary rollbacks and freezes for all employees, including firefighters, although a union official declined to comment today on the union’s positions on these wage proposals.

The union has created a Web site as well as a radio advertisement warning that cuts could increase response times, result in fewer people on duty, reduce the city’s ability to respond to disasters and hurt the city’s fire insurance rating, which is at the highest level.

This discussion is just one part of the ongoing wrangling over the city’s budget, which has seen an ever-widening deficit since the economic downturn began.

The city has already cut operating costs, eliminated vacant positions and announced some layoffs. City management has also proposed an 8 percent wage rollback in each of the next two budget years to avoid layoffs, a proposal being evaluated by the unions that represent city workers.
My recommendation to Las Vegas is to declare bankruptcy and let the unions see what they can get in court.

Simi California: Simi, police union agree to contract
The Simi Valley City Council on Wednesday approved a new agreement with the Simi Valley Police Officers’ Association for an 18-month employee contract that includes a 3 percent salary decrease for sworn police officers and sergeants.

The unanimous approval came after the council went into a closed session meeting late Wednesday afternoon with attorneys and representatives from both the city and police association.

Significant provisions of the MOU approved Wednesday include:

For fiscal year 2009-2010, the base salaries and monthly salary ranges for all police unit classifications will be decreased by 3.43 percent. To address the issue of retroactivity, the city will capture the decrease by reducing base salary of all police unit employees by 6.86 percent Dec. 21, 2009 to June 20, 2010. Effective with the payroll period beginning on June 21, 2010, base salaries will be increased so that the reduction is back to 3.43 percent.

A two-tiered retiree medical program, with any new employees hired after Jan. 1, 2010, receiving a defined contribution retiree medical benefit. Police unit employees as of Dec. 31, 2009, who retire from the city are eligible to remain on the city’s group health plans and the city will contribute to the full amount of the premium. Employees hired after Jan. 1, 2010 are not eligible to receive retiree health insurance benefits, but rather will receive a contribution in the amount of $300 per month placed in a type of retiree health savings account.

Modified provisions regarding assignments, shift scheduling, and the use of annual leave.

A provision providing for an expanded Civilian, Volunteer and Reserve Officer program ....
I had to read that twice. The police union agreed to work rule changes, pay cuts, and benefit cuts including a two-tiered program for new officers. Wow. I commend the city of Simi for standing tough and of course I commend the police union for seeing the writing on the wall and recognizing the need to phase out defined benefit medical plans. I am sure there there is much more work to be done in regards to pensions but this appears to be a genuine start.

Hawaii: University of Hawaii will reduce faculty pay by 6.7 percent
The University of Ha-wai'i will cut salaries for most faculty by 6.7 percent beginning Friday.

UH President M.R.C. "Marci" Greenwood said she decided to cut salaries because negotiations with the faculty union were at an impasse and time was running out to reduce the school's budget.

J.N. Musto, executive director and chief negotiator for the University of Hawai'i Professional Assembly, said Greenwood's decision violates an existing agreement and the union "will take action to protect the rights of the faculty and to preserve a legitimate collective bargaining agreement in whatever court or venue is necessary."

It may ultimately be up to a judge to determine what happens.

"It may very well be that this will get resolved in the courts," Greenwood said.

Greenwood said if the salary cuts are not instituted, layoffs and other actions will have to be considered to help make up for a $154 million loss in revenue, about 13.8 percent, from the state over the current fiscal year and the next.

Systemwide, the average salary for a UH faculty member is about $84,000. The payroll reduction affects UHPA's roughly 3,500 members, consisting of lecturers and professors. Those faculty members paid through nonappropriated funds such as extramural contracts and grants won't be affected, nor will faculty members who retire before June 30, 2010.

The current UHPA contract ran out on June 30, but Musto said UH is bound to follow it until a new contract is negotiated.
What is it that unions in general do not understand about layoffs and budget deficits? Things clearly have to change and not just salaries either.

Boston: Judge rejects transportation workers effort to block benefit cuts
A Suffolk Superior Court judge has dealt a significant blow to MBTA employees fighting a cut in their benefits, saying in a key ruling released yesterday that a group of 22 labor unions was unlikely to win a lawsuit attempting to block Governor Patrick's transportation plan.

The unions had argued in a lawsuit filed in September that Patrick's plan to save up to $30 million a year through cuts to worker and retiree benefits illegally subverts collective bargaining rights by changing their benefits without going to the negotiating table.

They say they earned the benefits over many years and that the T's real problem is the debt that has piled up from years of unfunded expansion projects.

But Judge Christine M. Roach denied an attempt by the union to block benefit cuts on an emergency basis. The initial cuts are targeted at a small group of employees and retirees starting Jan. 1; the majority of employees would be affected on July 1.
Understanding the Massachusetts Bay Transit Authority [MTBA] problem

Please consider Time to end ludicrous MBTA benefits
I turned on the local news this morning, and heard, once again, that the MBTA has to increase fares and reduce service in order to make ends meet this fiscal year. As a business person who has had total profit and loss responsibility for several firms over the years, I was curious how reducing product quality and increasing the price charged to customers could ever work in the marketplace. So, I started to look into the MBTA budget for 2009. The first thing I noticed (and you can also go to the MBTA Web site and follow along) is that salaries and fringe benefits are nearly HALF of the total operating expenses. Having been the vice president of a major ground transportation company at one time, it was a rule that salaries and fringe could not exceed 1/3 of total operating expenses in order to remain viable and competitive. But unlike a "for profit" private sector business, the "T" doesn't have to control costs - it just has to increase fares and cut services.

As I continued to peruse the budget, I searched for the cost of pensions and health insurance for retirees - since they have to be fully funded and increased each year to keep up with the rising costs, and since they combined to be the Achilles heal for General Motors, I thought I'd be able to find out what kind of burden they continue to impose. Unfortunately, unlike any other public agency in the commonwealth, the MBTA does not have to publish its pension obligations because it operates outside the state's retirement agency. I was able to find out a few of the generalities of the burden all commuters are paying - maybe you knew this, but as a daily commuter looking at working to pay off my home, my kid's college debt and keep up with rising taxes, I was appalled - especially since I will still be working at age 75 in order to pay everything off!

MBTA workers can receive a full pension after 23 years of service, regardless of age. So, if an MBTA worker graduated from high school and got a job at age 19, he or she is eligible to receive a full pension at age 42! Not only that, he or she will also receive free health insurance for life. And, since 42 is a prime working age, MBTA pensioners can work at other jobs and earn as much as possible, unlike other state retirees, and pile those wages on top of their MBTA pension.

So, when I heard that commuter rail weekend service may be suspended, and that there is a real potential for weekday service reductions - AND, fares may have to be increased dramatically, I asked myself, "Why are the struggling commuters who are paying the salaries of these people, just sitting there and taking it?" The MBTA general manager, Dan Grabuaskas, says his hands are tied. In fact, according to a local daily paper, Grabuaskas even tried to give his management team a 9 percent pay raise, until pressure from the governor's office convinced him to back it off to 3 percent. ....
The Man Who Never Returned

In honor of the Massachusetts Bay Transit Authority it's time for a Kingston Trio song:

Let me tell you the story
Of a man named Charlie
On a tragic and fateful day
He put ten cents in his pocket,
Kissed his wife and family
Went to ride on the MTA

Charlie handed in his dime
At the Kendall Square Station
And he changed for Jamaica Plain
When he got there the conductor told him,
"One more nickel."
Charlie could not get off that train.

Did he ever return,
No he never returned
And his fate is still unlearn'd
He may ride forever
'neath the streets of Boston
He's the man who never returned.

Now you citizens of Boston,
Don't you think it's a scandal
That the people have to pay and pay
Fight the fare increase!
Vote for George O'Brien!
Get poor Charlie off the MTA.

The above part of the lyrics of a great Kingston Trio song Charlie on the MTA
In the 1940s, the MTA fare-schedule was very complicated - at one time, the booklet that explained it was 9 pages long. Fare increases were implemented by means of an "exit fare". Rather than modify all the turnstiles for the new rate, they just collected the extra money when leaving the train. (Exit fares currently exist on the Braintree branch of the Red Line.) One of the key points of the platform of Walter A. O'Brien, a Progressive Party candidate for mayor of Boston, was to fight fare increases and make the fare schedule more uniform. Charlie was born.

The text of the song was written in 1949 by Jacqueline Steiner and Bess Lomax Hawes. It was one of seven songs written for O'Brien's campaign, each one emphasized a key point of his platform. One recording was made of each song, and they were broadcast from a sound truck that drove around the streets of Boston. This earned O'Brien a $10 fine for disturbing the peace.


In 1959, The Kingston Trio released a recording of the song. The name Walter A. was changed to George to avoid problems. Thus ended Walter O'Brien's claim to fame.

Walter A. O'Brien lost the election, by the way. He moved back to his home state of Maine in 1957 and became a school librarian and a bookstore owner. He died in July of 1998.
There are more verses and more information in the above link.

Mike "Mish" Shedlock
Click Here To Scroll Thru My Recent Post List

Last 10 Posts

Copyright 2009 Mike Shedlock. All Rights Reserved.
View My Stats