Monday, October 15, 2012

Not quite how it works

There was an interesting opinion column in the Lincoln Journal Star last week written by Coby Mach, the director of the Lincoln Independent Business Association.  Mr. Mach calls upon the members of the firefighters union to give up many of the benefits or "perks" in their contract.  There are a couple of slightly misleading inferences in the column, but he's got the major benefits right, and there is no denying that firefighters in Lincoln earn a nice wage and have some pretty good fringes, too.

What interested me about this was whether Mr. Mach was simply using this column as a vehicle to inform his fellow citizens of the wages and benefits firefighters receive, or whether he truly believes that by calling upon a labor union to give up some of their benefits, you can actually convince them to do so. If it is the later, that's not quite how it works.

Labor unions exist to get the best possible salary, benefits and working conditions they can for their members through collective bargaining  They do so in negotiations with management--in this case, the City of Lincoln. Negotiating is a back-and-forth process in which each party attempts to get what they want. If the give and take does not result in an agreement, and the parties are at impasse, they may exercise their options under the law.

In Nebraska, state law establishes the process by which disagreements may ultimately be settled in the Commission on Industrial Relations.  The prevailing rule is comparability: public employee salaries and benefits are to be compared by the Commission to those of employees doing similar work requiring similar skills in similar conditions.

A proceeding in the Commission to resolve a dispute is much like a trial: both sides present their evidence, usually composed of salary and benefit information from other jobs they think are suitable matches, and the Commission ultimately decides.  Like a trial, you can win or you can lose. There is a certain risk involved for both sides, which operates as an inducement for the parties to earnestly attempt to reach an agreement without resort to the Commission.

Under this legal scheme, created by the Nebraska Legislature, you can expect the salary and benefits of public employees to be pretty close to the midpoint of similar employees in other places that resemble Lincoln.  The parties at odds can argue about the math, and disagree about what the most comparable places may be, but in the end the range is not very large, regardless of who prevails.

Laws can be changed, and the City of Lincoln has advocated changes in the past. The statutes were tweaked last year but there has not been a sufficient number of cases before the Commission since those revisions to assess their impact.  If Mr. Mach and LIBA believe that firefighters' benefits are out of line and should be eliminated or reduced, lobbying for changes in the state law that would produce that result is probably more productive than calling upon a union to voluntarily surrender their benefits.


Anonymous said...

I thought it was an interesting piece, especially when considering the writer or the organization he represents. In the big list of community priorities, which is more necessary: A well trained, well paid, and well respected Fire Department, organization of irrelevant, self promoting, good old boy, blowhards who are only in the news when they raise a stink about a perceived affront to the taxpayers of the community?

Anonymous said...

Let me start by saying I am generally pro union. However, civil service unions, especially fire and police, are the worst. These unions like to play on the fears of a breakdown in public safety, if their demands aren't met. People buy this hook line and sinker every time. As if there aren't a whole line of folks who would do the jobs for a reasonable non union wage. (which would still be more than the average private citizen makes in lincoln.)

Tom Casady said...


To quote from a previous post on this topic:

"If there was no collective bargaining, we'd probably pay exactly like the non-union employers in the private sector: enough to attract and retain the type of employee that we feel we need to deliver the quality of services we desire, and to prevent them from jumping ship to our competitors who would work equally hard to lure the best ones away. Maybe the package necessary to do that would be lower, maybe not. I can find hundreds of people who would be willing to serve as firefighter-paramedics or police officers for less than the women and men who hold those jobs now. I'm not so sure we would be happy with the result."

Michael James said...

Somehow I knew this would be your blog post today. Before I even read Mr. Mach’s piece on Friday I knew your debate skills would be on full display today. I received a similar rebuttal last June in “W2 not quite that large”
I am an average citizen who follows government and politics. Firefighter compensation is not just a local issue. The national Fire Union is a highly organized, highly funded institution. They contribute large amounts of money to political races and lobby hard for favorable legislation. In the view of this average citizen it has gotten out of line. When big business and other powerful special interests run the same game, I call them out too.
I do not have a problem with Teachers, Police, or PSD compensation. I do have a problem with Lincoln and Omaha Firefighter compensation. When I wrote my letter to the editor last year about this same issue it was to help inform my fellow citizens. I did not expect a rebuttal on your blog.
Keep up the good work and thank you for your service.

Tom Casady said...

Mr. James,

My post really isn't a rebuttal. I'm trying to point out that the solution to the problem (if it's a problem) lies in changing state law, not vilifying the union for doing exactly what unions do.

While I was a union member for a decade early in my career, that ended 25 years ago, and I've been on the other end of negotiations since then. Managers have to deal with a lot of stuff in union contracts that we wish we were not burdened with, but that's the way the cookie crumbles in collective bargaining, and particularly with the Nebraska state statute comparability scheme.

Steve said...

There are plenty of other places we could complain about when it comes to high salaries and perks that, in the end, are paid for by the general public. Still, it's hard for the average taxpayer to feel happy about paying taxes to support public servants when those salaries and perks are, in many cases, double (or more) what they get in their own jobs.

Anonymous said...

I would like to see ALL State, Federal and Local employee union pension plans switched from a defined benefits plan to plans that allow employee contributions and the employer contributions to be deposited into an employee SELF DIRECTED ROTH IRA. Under a system like this after the initial contributions to the plan are made the government employer is totally out of the picture and is not liable for any further contributions. This would also eliminate HUGE pension funds handling fees and the opportunity for political cronies in charge of administering these funds to scam the system. Under a system like this taxpayers would not be paying retirees for decades to come.

Gun Nut

Michael James said...

Director Casady,
I reread your blog post and you make some great points. I will make contact with the Governor and State Legislators who I believe are above the AFL-CIO and IAFF influence.

Anonymous said...

Anything out there that mandates a municipality to staff a fire department or police force? If not, how about we disband both and roll the dice?

Of course, I'm being facetious. My point is that it's bit shallow to view a law that manadates a city treat their employees fairly (compared to their peers) as unfair and seek to change the rules to their favor.

Spend money on good people, not on more buildings or things.

Anonymous said...

Mr. Mach is always ready to point the finger at city employees. He does have a point though. If you look at the city labor contracts none are as sweet as LFR

Anonymous said...

Nationally, some of your public employee unions like NEA and IAFF are very politically active, and contribute big bucks to the campaigns of candidates they expect to be favorable to their issues. As a result, they've got a lot of local politicians in their back pocket who are beholden to them. I think that's what the director is hinting at: they exert too much control over city councils and state legislatures that make the laws and pass the contracts, and therein lies the problem. I don't think government employee unions should be able to give money or in-kind services to political campaigns. If limiting that isn't Constitutional, then our recourse as voters is to stop electing those candidates who take their money.

Steve said...

Anon 3:52

Why stop at government employee unions? The consumer can take it in the shorts just as much from pretty much any large union that has undue governmental influence.

ARRRRG!!!! said...

It pays to have a good union.

Anonymous said...

It is funny the opinions people come up with about fire and police wages. To those complaining: Next time you need to be intubated on your way to the hospital, your house and irreplaceable keepsakes are burning, or your mom is trapped in her vehicle after getting hit by a drunk driver, do you want a highly trained professional who makes $55K or someone who couldn't cut it at an agency the size of LFR and now makes $30K in a small town? Next time your house gets broken into, your child runs away, or your wife is assaulted by a pervert on a bike you want a police officer as highly trained and professional as the average LPD officer, or do you want someone who is willing to work for $30K because they can't get hired by an agency the size of LPD? Just like anything else, you get what you pay for.

Would the Bulls have 6 championships if they had only been willing to pay Michael Jordan the league minimum?

Would Bo Pelini be coaching the Huskers for the salary that Doane or Wesleyan pay their head coaches?

Would the head chef at Misty's Steakhouse remain at Misty's if he was getting paid the same as the cook at your favorite fast food joint?

I think not!

Steve said...

Anon 11:18

Most jobs are acquired not because of what you know, but who you know. Another factor to consider is that many public agencies strive for diversity and accept less than the best in that regard. Performance on the job is not necessarily related to education or ability, but more often on moral character. To assume that those who make more money are more qualified or more likely to perform at higher levels is simply misguided. Just as many poor people contribute more to charities than people with more money, many people in the work force have good work ethics and good abilities, but lack the contacts, or ethnicity, or luck, to be selected the higher paying jobs.

I have known many who make more money than I do who have neither the ability, the knowledge, or the desire, to perform at a level I would expect from someone in their position.

Pay is not an indicator of competence (look at Pelini).