Chapter 13 - Collective bargaining in the public sector. The main contents of the chapter consist of the following: The evolution of public sector collective bargaining, the legal regulation of public sector unionism, differences in the bargaining process between the public and private sectors,...
Chapter 13 Collective Bargaining in the Public Sector McGrawHill/Irwin An Introduction to Collective Bargaining & Industrial Relations, 4e Copyright © 2008 The McGrawHill Companies, Inc. All rights reserved 1 3 13 3 The Evolution of Public Sector Collective Bargaining The percentage of government workers represented by unions grew from 12.8% in 1960 to 20.6% in 1974 Including associations, 37.7% were members of a bargaining organization • The 1960s and Early 1970s: The Era of Growth What caused the rapid growth? • Expansion of government budgets • The example of civil disobedience set by civil rights and other groups in the 1960s • Passage of laws favorable to public sector collective bargaining 1 4 13 4 The Mid and Late 1970s: The Taxpayer’s Revolt The economic environment for public sector bargaining tightened in the mid1970s • Also, a conservative political tide questioned the value of government expenditures Following the OPEC oil embargo and the steep recession of 1974, New York City and other governmental entities were financially strained City workers received pay cuts of up to $4,500 California passed Proposition 13, which cut property taxes to 1% of the market value Despite the problems, employers did not try to remove the unions, making them more stable than the private sector 1 5 13 5 The Early 1980s: The PATCO Strike • The Professional Association of Air Traffic Controllers struck on August of 1981, despite a nostrike clause PATCO sought higher wages and benefits President Reagan fired the strikers and used military controllers to keep traffic moving The Federal Labor Relations Authority decertified PATCO, but the new controllers voted in a new union in 1987 The PATCO strike was a watershed event for labor The strike hurt the image of labor for nearly two decades and legitimized hardline bargaining by employers During the Clinton Administration, the strikers were offered their jobs back and a few returned 1 6 The Mid and Late 1980s: Institutional Stability and Some Gains 13 6 The PATCO strike contributed to a wave of private sector concessionary bargaining in the 1980s The public sector was relatively calm, with no extreme economic events • Some politicians claimed that cutbacks in spending had gone too far Problems with public education and student achievement led to higher expenditures, especially in math and science NEA membership and bargaining power strengthened as a result 1 7 13 7 Reinventing Government: To the Present In the 1990s, the public sector came under intense pressure to improve performance and shrink its size Some calls for reforms arose from formal reviews • These reviews often called for the reinvention of the public employment system to address bureaucracy and inefficiency • A number of reviews suggested empowering public sector workers through partnerships with unions • At the same time, there were calls for downsizing and privatization of the public sector In contrast to the private sector, there has been general stability in public sector bargaining for the past 35 years 1 8 The Legal Regulation of Public Sector Unionism Federal, state, and local government employees are excluded from coverage under the NLRA Separate regulations cover bargaining in these sectors In 2006, 7.4% of the private sector employees were unionized, while 36.2% of the public sector were covered by bargaining agreements • 28.4% of federal and 30.2% of state employees 41.9% of local government workers were union members 13 8 1 9 13 9 Federal Employees Federal employees received the right to unionize by Executive Order 10988 in 1961 In 1970, Congress allowed postal workers to bargain over wages, hours, and working conditions In 1978, Congress replaced the Executive Orders with a comprehensive law giving bargaining rights to federal employees • The law allowed bargaining over conditions of employment, but not pay and fringes Bargaining in the federal sector is now regulated by the Federal Labor Relations Authority • Strikes are still prohibited 1 10 State and Local Government Employees 13 10 As of 2006, all but nine states allowed some collective bargaining by the public sector • States without public bargaining are primarily in the South, and include: Arizona, Arkansas, Colorado, Louisiana, Mississippi, North Carolina, South Carolina, Virginia, and West Virginia Of the 41 states with the laws, 24 have passed comprehensive legislation covering many occupations States have increased the scope of public bargaining laws in recent years, such as improved dispute resolution procedures 1 22 Management Structure in the Public Sector 13 22 In the public sector, managerial authority and responsibility is widely shared As a result, bargaining in the public sector is more multilateral than bilateral Teacher contracts are an example, with superintendents, school boards, mayors, citizens and others involved • When unions have considerable access to elected officials, management negotiators may find it difficult to keep a united front Internal conflicts within management’s ranks frequently spill over into the formal negotiations process 1 23 The Negotiations Process in the Face of Multilateral Bargaining 13 23 Multilateral bargaining is a process that includes more than two distinct parties An “end run” occurs when union officials try to sidestep the formal management negotiating team and take their proposals to an alternative group (such as school board officials) Community interests can also be involved with multilateral bargaining Multilateral bargaining also has emerged in jurisdictions that face fiscal crises • State, federal, and private sector business leaders usually demand some say in return for their financial support 1 24 A Case of Multilateral Bargaining AFSCME and Wisconsin engaged in a bitter multilateral dispute • The previous contract had been settled through an end run around management and settled between the governor and the AFSCME president • The next bargaining led to a 15 day strike in which the National Guard was called out • Court injunction against strikers • Joint Legislative Committee on Labor rejected the back to work settlement • Legislature approved deal • Attorney general pursued contempt proceedings against the striking workers The case shows how diverse political pressures can affect collective bargaining 13 24 1 25 13 25 The Effects of Public Sector Bargaining on Outcomes • Wage and Other Compensation Outcomes Although estimates vary, the vast majority of studies have found a wage differential between unionized and nonunionized public employees Wage effects are not greater than the private sector Public sector unionnonunion wage differential range is 515% Unions do not appear to exert a stronger effect on wages of public employees than they do on the wages of private employees Unionism leads to higher fringe benefits for public employees • More days off, fewer hours per day worked, higher pensions and vacations Large pensions increases suggest the simple wage differential underestimates the compensation effects of bargaining 1 26 The Effects on Public Sector Budgets 13 26 Evidence comparing employment in union and nonunion cities suggests that public sector unionism raises or at least does not lower employment Unions are able to lobby for greater expenditures to pay for raises • Union Effects on Public Administration Unionization has increased the formalization of personnel practices and reduced management discretion There have been a few cases of successful labormanagement committees in the public sector The quality of public service is dependent upon the relationship between the union and employer 1 27 The Use of Interest Arbitration 13 27 Interest arbitration determines contract terms Some form of interest arbitration is available in 22 states Police and firefighters are the groups most covered A wide variety of forms, including conventional, final offer, and combinations of mediation, factfinding, and interest arbitration • Does Interest Arbitration Perversely Affect Collective Bargaining? Some argue it chills negotiations and stifles compromise • Politically, it can pass the blame to the arbitrator • May favor the party that seeks the fewest deviations from the status quo and could stifle innovation 1 28 Evidence of the Effects of Interest Arbitration Most negotiations where interest arbitration is available are settled without its use One study found that it was used in 6 to 29 percent of negotiations in states where it is available • The variance in use is a function of the different form used • The Impact of Interest Arbitration on Contractual Outcomes Fewer strikes in states with interest arbitration But settlements are slightly higher and lead to more favorable nonwage contract terms Outcomes are less varied across municipalities 13 28 1 29 Participatory Programs and Work Restructuring in Public Schools • The History of School Reforms 13 29 Many school districts began to alter the roles and responsibilities of teachers, principals, and administrators School reforms came in response to pressures to improve education following “A Nation at Risk” that argued weakness in elementary and secondary schools were contributing to America's economic decline The perception that Japan and Germany were more competitive due to better trained workers, combined with deteriorating public schools, prompted further reforms Education has historically been a local matter in the U.S. Now, national standards increased federal involvement Schools are under pressure to improve learning and lower costs, which parallels pressures in the private sector 1 30 The “LowCostHierarchical” School Reform Strategy There was a wide divergence of opinion over what was the appropriate way to restructure schools Some wanted tighter controls and stricter lines of authority • They felt this would improve productivity and discipline • Testing of teachers and merit pay were suggested • This was a counterpart to the lowcost private sector business strategy • A “DecentralizationParticipation” School Reform Strategy This technique was thought to improve quality & innovation The hope was that teachers would innovate in classroom instruction and respond to student needs quickly 13 30 1 31 School Improvement Teams • Some districts introduced school improvement teams with 10 to 15 members including the principal and some teachers, parents, and support staff • The teams were analogous to Quality Circles • Their problems and limitations were similar to those in the private sector • Teachers became frustrated when their suggestions were turned down • School improvement teams were constrained by the myriad regulations that surround public education 13 31 1 32 Lead Teacher Programs Lead, or master, teacher programs were often part of the decentralizationparticipation strategy The goal was to allow experienced and committed senior teachers to serve as mentors and role models for younger teachers It was a way to financially reward superior teachers in a senioritybound system This was a way to cope with a seniority system with no mechanism for merit raises 13 32 1 33 SchoolBased Management • Schoolbased management was an extreme reform adopted in some districts • Typically included teams of teachers, administrators, parents, students, and local community leaders • Issues included curriculum, teaching strategies, hiring of administrators, professional development, discipline, and school schedules • This system attempted to create more flexibility in systems constrained by rules • Some teachers unions support such reforms, yet there is much diversity in the unions’ stance 13 33 1 34 The Problems Inhibiting New Efforts 13 34 Many principals are reluctant to give up control, similar to supervisors in the private sector The schoolbased management and related reforms also create a critical issue concerning the relationship between bargaining and the participatory process • For example, the role of the grievance procedure when there is a team to solve the problem • Accountability Programs • The pressure for closer accountability derives in part from the public’s concern over the quality of education • It includes the monitoring of student progress • Proposed revisions of tenure are a challenge to the unions • Effects of School Reforms on School Outcomes • Little evidence relating to the effectiveness of reforms; complexities of the educational system make such measurement very difficult 1 35 Normative Premises 13 35 Criticisms of Public Sector Bargaining • Some say that government’s primary responsibility – to represent the public interest – makes collective bargaining inappropriate for the public sector • Critics say that if labor unions gain exclusive representation, they will obtain undue political power The Virtues of Public Sector Bargaining • Others say public employees have an inherent right to participate in the determination of their working conditions • Evidence suggests that unions have modest impact on pay and working conditions • Representation of public employees may enhance worker democracy 1 36 Summary 13 36 There has been a diverse range of experience in public sector bargaining • It is difficult to make generalizations, since there are wide differences in the economic power of public employees • Unionism does not appear to warp the political process • The wage effect is not greater in the public sector than in the private sector • Public sector unions have raised some fringe benefits substantially and led to an increase in government expenditures • Work restructuring has emerged as a central issue in the public sector • There are high levels of unionization in the public sector versus the private sector .. .Chapter 13 Collective? ?Bargaining? ?in? ?the? ? Public? ?Sector McGrawHill/Irwin An? ?Introduction? ?to? ?Collective? ?Bargaining? ?&? ?Industrial? ?Relations, 4e Copyright © 2008 ? ?The? ?McGrawHill Companies, Inc. All rights reserved... A difficult issue is how? ?to? ?resolve conflict between? ?public? ? employee? ?bargaining? ?statues? ?and? ?other laws 1 15 13 Differences? ?in? ?the? ?Bargaining? ?Process between 15 the? ?Public? ?and? ?Private Sectors The? ?more? ?public? ?sector? ?employees are able? ?and? ?willing? ?to? ?... At? ?the? ?same time, there were calls for downsizing? ?and? ? privatization of? ?the? ?public? ?sector In? ?contrast? ?to? ?the? ?private? ?sector, there has been general stability in? ?public? ?sector? ?bargaining? ?for? ?the? ?past 35 years