Hard-pressed cities putting squeeze on their employees
Dollar troubles are forcing a growing number of major US cities to ask from concessions from their own employees to stay solvent. Alternatives run the gamut from outright layoffs to a freeze or rollback in wages or fringe benefits.Skip to next paragraph
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But getting employee's cooperation is no easy task.
Many of the cities in the worst financial squeeze have the strongest public-employee unions. Often their support helped put the mayor in office. Used to having these pleas from management often capped by generous settlements in an effort to keep labor peace, many union leaders and members are not convinced that their city's current tale of woe is genuine. They say they have heard the same financial "sob" stories and layoff threats before.
"Some cities have been crying wolf about their finances for years," confirms Charles C. Killingsworth, Michigan State University professor of labor and industrial relations and a frequent arbitrator in labor disputes. "Now that the wolf is really here, it's not going to be a simple matter for them to establish the credibility of the present financial threat. . . . The question of a city's ability to pay has always been very slippery because the question always in the background is, 'What are the real limits on a city's taxing powers?'"
Detroit Mayor Coleman Young's current bid to unionized city workers to accept a two- or three-year wage freeze is viewed as a key test of government's ability to convince public-employee unions that the line on pay increases must be held.
The freeze, a compromise from a 5-to-7 percent cut in wages earlier proposed, is part of a three-part plan designed to rescue the city from the brink of bankruptcy. City voters approved a 1 percent hike in local income taxes last month, but the Michigan Legislature will not allow that to take effect unless Mayor Young also can arrange by Aug. 15 to sell $125 million worth of medium-term city bonds and persuade local unions to do without cost-of-living hikes.
City police already have agreed to a two- year wage freeze in exchange for a promise of no layoffs and a retirement sweetener. Now local firefighters, who have long favored parity with police in wages and benefits, are, as mayoral aid Joyce Garrett puts it, "under the hammer" to accept the same terms. The recently negotiated contract governing most other unionized city workers calls for a freeze but has not yet been ratified.
Although Detroit's request to its unions is unusual, it is not without precedent, and it may not remain ratify for long. The Metropolitan Transit Authority in New York City, for instance, has warned its unionized workers that it will hold back $24 million in scheduled cost-of-living increases next fall unless workers can raise the funds by increasing productivity, as their contract specifies.
"City budgets are highly labor intensive, and I think Detroit is just on the front end of the crunch that's coming," says US Conference of Mayors spokesman Gene Russell.