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Michael Cimini, Joan Borum, Eric Johnson, and John Lacombe
P ublic sector negotiators faced a troubled economic climate in 1992 that often dictated the bargaining outcome. As a result, major collective bargaining settlements in State and local government provided the smallest average wage rate change since the Bureau of Labor Statistics series began in 1984. In addition, the changes were smaller, on average, than those in the contracts being replaced.1
The economy
Record budget deficits and declining revenues were among the
lingering economic difficulties from the 1990-91 recession that
forced several State and local government negotiators to try to
freeze salaries, require employees to pay a greater share of
health insurance, and consider furlough days and layoffs to
balance government budgets, which is a constitutional requirement
in many States and localities. To union negotiators, job
security, pay, and health insurance were among the most important
bargaining issues.
Because of these economic conditions, many agreements negotiated in 1992 called for salary freezes in the first part of the contract term, followed by subsequent pay raises, or included just one pay raise over the contract term. In addition, many agreements contained health care cost control and cost-sharing arrangements, such as managed health-care programs, higher employee premium payments, and higher deductibles and employee copayments.
This excerpt is from an article published in the June 1993 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1 Data on private industry settlements reached in 1992
were published in "Collective bargaining agreements in
1992," Monthly Labor Review, May, 1993, pp. 22-23.
Comparisons between major collective bargaining settlements for State and local government with those for private industry should note differences in occupational mix, bargaining practices, and settlement characteristics. Professional and other white-collar employees, for example, make up a much larger proportion of the workers covered by government than by private industry settlements. Lump-sum payments and cost-of-living adjustment clauses, on the other hand, are less common in government than private industry settlements. Also, State and local government bargaining frequently excludes items such as pension benefits and holidays that are prescribed by law; these items are typical bargaining issues in private industry. (For a more detailed description of how occupational mix and industry activity affect the comparison, see Richard E. Schumann, "State and local government pay increases outpace five -year rise in private industry," Monthly Labor Review, February 1987, pp. 18-20.)
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