State workers rally for higher pay; collective bargaining process faces criticism. Negotiations will impact 2017-19 state budget

Although school funding will likely be the top budget priority in the 2017 legislative session, state workers are making it clear that they expect a substantial compensation boost in their new collective bargaining agreement. Jim Camden reports in the Spokesman-Review on yesterday’s rally in Olympia.

Hundreds of state workers in green shirts proclaiming “We are the Safety Net” and “Never Quit” held a raucous rally in in the Capitol Rotunda Wednesday to demand higher pay and better benefits in their next contract.

The governor’s office is currently negotiating with some 95,000 state or publicly funded workers represented by 40 different unions. Tentative wage agreements for the 2017-19 biennium have been reached with 14 of the unions, but discussions continue with the largest groups, the Federation of State Employees and the Public Employees Association. 

KIRO7 also covered the rally, focusing on the results of a salary survey that appears (more on that in a second) to bolster the employees’ argument.

State employees rallied Wednesday for better wages as part of their negotiation for their next two-year contract, citing a state study that identified 99 percent of employees as making less than people doing the same jobs elsewhere.

The 2016 state salary survey, released this spring, looked at the midpoints of salary ranges of state employees. They compared those to the midpoints of salary ranges for those doing the same jobs in the private sector and for other public employers, like cities and counties…

The state salary survey concluded that state employees receive relatively good benefits compared to their counterparts who work for other employers.

We’ve looked at the salary survey (executive summary, slide overview, methodology), which is required by law.

The Office of Financial Management – State Human Resources (State HR) is required by law (RCW 41.06.160) to conduct a salary survey to determine the prevailing pay rates for jobs that are comparable to state government jobs.

The state contracted with Segal Waters Consulting to conduct the survey. In such things, comparability can be tricky. Here’s the breakdown 

Invitations were sent to 132 employers; 62 participated in the survey. Of those, 37 percent are from the private sector and 63 percent are from the public sector. Public sector employers included 13 states that provided data for jobs unique to state government: Colorado, Illinois, Indiana, Maryland, Minnesota, Missouri, New Jersey, North Carolina, Oregon, Pennsylvania, Tennessee, Utah, and Wisconsin.  

The participants also included union and non-unionized employers, and included employers from geographic regions across the state.

In-state employer participation has steadily declined over the last three cycles of the survey.

   *In-state private sector participation: 2010 = 56, 2014 = 39, 2016 = 23

   *In-state public sector participation: 2010 = 84, 2014 = 29, 2016 = 26  

Out-of-state public sector (other state governments) participation has held relatively steady: 2010 = 12, 2014 = 10, 2016 = 13

Because of the declining participation rates, the consultants supplemented survey with with information from other reliable sources. Then they compared state workers’ salaries against the market, defined as,

The combined market is private and public sector in-state entities and other state governments.

We’re not prepared to evaluate the results, but it’s fair to question whether the “market” accurately reflects the experience of most Washingtonians, particularly those working for or operating small businesses throughout the state. Then there’s this:

While the survey primarily focused on base salaries, employers were also asked to report on compensation practices, paid leave practices and other fringe benefits provided to their employees…

The state remains competitive in health, dental and retirement benefits in a comparison to the Washington state market (public/private sectors combined) average benefits. 

The table shows just how competitive:

benefits table

Regardless, the labor negotiators’ talking point is clear. 

A delegation of Federation and other union bargainers … delivered their message to the governor’s office. This state – the largest employer in Washington – can’t get ahead when 99 percent of its employees are behind market rates of pay, they told the governor’s chief of staff David Postman.

And, they say negotiations aren’t going well right now.

Federation Executive Director Greg Devereux told Postman that while the General Government team has so far “negotiated a lot of good things…last night we got a proposal that was incredibly insulting.

What was the proposal? We don’t know. And that’s one reason the process continues to draw criticism, as reported by Austin Jenkins of the Northwest Public Radio.

In the Capitol Rotunda Wednesday, unionized state workers rallied for better pay and work conditions. But contract negotiations — now underway — take place behind closed doors and without the input of state lawmakers.

Republican state Senator John Braun called that “absolutely backwards.”

An op-ed in the Tri-City Herald by Jason Mercier of the Washington Policy Center argues for more transparency.

These negotiations should be subject to the state’s Open Public Meetings Act or, at a minimum, utilize a process like the one used by the city of Costa Mesa in California to keep the public informed called COIN (Civic Openness in Negotiations). Under this type of system, all of the proposals and documents that are to be discussed in closed-door secret negotiation must be made publicly available before and after the meetings with fiscal analysis provided showing the costs.

While not full-fledged open meetings, providing access to all of the documents before the meetings would help inform the public about the promises and tradeoffs being proposed with their tax dollars before an agreement is reached. This would also help to make clear whether one side is being unreasonable, and would quickly reveal whether anyone is acting in bad faith.

As we wrote in our foundation report, public employee compensation is an important element in drafting a sustainable budget. It’s to everyone’s benefit to provide fair compensation, preserve a public sector workforce made up of top-rate professionals, and provide a career ladder that motivates talented people to join state government. And, we wrote,

Even with the ongoing economic recovery, the state budget will face stress for the foreseeable future as a result of court-mandated increases in basic education funding, increased health care expenses, negotiated public employee compensation increases, and increases in other required state spending. Given these pressures, special emphasis must be placed on controlling key budget drivers, including health care, labor costs, and debt. Some of the actions lawmakers might explore to increase budget sustainability include fully funding state pensions, creating a defined contribution plan option for state employees, and controlling state debt.

It’s important to remember, collective bargaining negotiations don’t occur in a vacuum. The ramifications for the 2017-19 budget, one that is already under stress, will be significant.