☆ Expert: SJ labor woes likely to be short-lived
Sheridan Swanson, Research Manager of the California Policy Center, analyzes the big trends informing SJ's recent labor impasse—why cities are perpetually squeezed by unions, and why strikes are so temporary. An Opp Now exclusive.
Opportunity Now: Some of SJ's city unions are saying: We want both more workers and higher wages. Time to hold onto our wallets?
Sheridan Swanson: It is very true that cities are getting squeezed from both sides. On one hand, there is mission creep—cities are doing more and more work—
ON: —much of it outside the city's charter.
SS: Yes, so there's pressure to start new programs, throw money at issues the private sector could handle more efficiently, and hire more people. And then there's pressure to pay those employees more and more, and taxpayers are footing the bill. This is a ratchet that only goes one way. Mark Moses has written a great book that explains this phenomenon, The Municipal Financial Crisis. He calls out how cities let their scope grow outside what it's supposed to be, then are in a perpetual squeeze from unions to do and pay more.
ON: There's some noise about a possible strike from some of the unions. How long do these municipal strikes tend to last?
SS: I have not heard of a municipal strike lasting for more than one or two weeks. Recently in Shasta County, they had a strike that ended even before the union and the city came to an agreement. Furthermore, employers (public agencies) are incentivized to come to agreements with striking employees quickly, because the PERB process isn't friendly to aggressive bargaining by employers, and bond rating agencies consider labor relations when they evaluate government agencies.
ON: If it were to go on for a long time, could the City hire contractors and freelancers to fill the gaps?
SS: In California, employees retain their employee status even if they are on strike, so in principle they could strike indefinitely. Even so, the city could bring on contractors and freelancers to fill the labor gap, but that is also controversial and really doesn't happen much—not to mention how difficult it is to actually bring new employees on board. It's not in the agency's best interest to go through the time and effort to train temporary employees; it's easier to negotiate and end the strike. Furthermore, I think the optics of a strike hurt the union if they push it too far, like we saw in Oakland Unified when they had a teacher strike this year. All of this contributes to these strikes, if they happen at all, being very short term.
ON: Unions are complaining about Vacancy Rate, meaning jobs are left unfilled and existing workers have to do more work. Is that legit? Is it viable to build vacancy rates into a contract agreement?
SS: I notice that in SJ, the union marketing campaign is drawing attention to the vacancy rate. I'm not convinced that the rate is high, as unions claim, because of compensation issues. I get that living in SJ is expensive, but still: Looking at the many, many six-figure salaries in the City of SJ, it's hard to believe that compensation packages are keeping people away from those jobs. Those are competitive salaries. Additionally, the benefits are already very competitive, since defined benefit retirement plans (as opposed to defined contribution plans) are the norm in the public sector.
Also, the union is operating on the built-in assumption that every vacancy should be filled, but what if not all of those positions are necessary? And what if filling all of those positions was so costly, the city couldn't afford to pay all the employees the wages the union demands? Or vice-versa: What if the unions' wage demands are so high, the city can't afford to fill all the positions? These are tradeoffs the unions pretend don't exist. The unions also tend to argue that overtime becomes necessary if there are too many vacant positions, but if overtime is the problem, the unions should be negotiating about the specific problem: overtime.
ON: There are also other advantages to working as a union city employee, beyond competitive salaries.
SS: Municipal union employees are used to being able to take advantage of their situation of working for the government instead of the private sector. We see a lot of raises not tied to performance, a lot of "me-too" raises where one group of employees or bargaining unit gets a raise, so everyone else demands one, too. These built in raises are often completely untethered to individual performance or the performance of their department or the city as a whole. They take advantage of the fact that the taxpayer is the one paying for their salaries, not their bosses nor the owners of a company that could go out of business.
For more on the California Policy Center, see here.
Image by The Municipal Financial Crisis
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