July 12, 2005 > Editorial: It's COLA time.
Editorial: It's COLA time.
A 4% pay raise was quickly approved by the city council for members of Teamsters, Local 856 last week. Originally part of the Consent Calendar, this item was removed so, for appearance sake, it could be "discussed" by councilmembers to show they are watching the budget. In reality, this was simply approval of an agreement that "contains increases consistent with those provided to other bargaining units throughout the City." There are eight bargaining units in the city of Fremont which can create a stair pattern to negotiations since contract expirations end on a variety of dates. It is difficult to give raises to one group and not to the next in the interest of "internal equity."
In this last round of negotiations, it was made clear at the council meeting that what was being paid was not an increase of wages. Councilmember Wieckowski asked for a definition of a wage increase in relationship to a "cost of living" increase. We are asked to believe that by calling this a Cost of Living Adjustment (COLA), these are different dollars than a pay increase would consume. I can buy the argument that a gallon of gas costs more today than a year ago and therefore my cost of living as increased. However, extra money paid to employees is an increase of pay whatever term you use. If the budget is in such a tight condition, a set of priorities should rule where money is spent. When staff negotiates with other staff over pay increases and then uses those increases to validate a continuing stream of increases for others, including themselves, salaries can run amok.
No one doubts that it is excruciatingly expensive to live in this area. The push for affordable housing is a testament to the economic problems residents struggle with daily to pay rent, mortgages and buy food for the table. When employers (including cities) are faced with a tight budget, negotiations should reflect as much. Employees are an extremely valuable part of any operation, but when budgets reach the breaking point, everyone including collective bargaining units need to work together and hold the spending line. COLA is another word for a raise and while it may be justified by looking at the Consumer Price Index or other economic indexes, the balance sheet of income and expenses trumps such arguments. If employees are tempted to move elsewhere due to personal economics, the same can be said of the private sector. This may be an unfortunate circumstance, but you cannot pay what you do not have. If however, money is found during these negotiations, then maybe things are not quite as tight as we have been led to believe.
In the current Teamster Memorandum of Understanding (MOU), soaring health insurance costs will be shared between the city and the Teamsters, but this still represents an increase in cash outlay. Statements that seem to congratulate the city for its premium sharing philosophy still skirt the issue of how much is too much. Companies where health premiums are fully paid by employers are dwindling to a handful. Contract modifications include the statement that "The Teamsters MOU provides the lowest maximum retiree medical reimbursement when compared to other employee organizations throughout the City." A "minimal" increase from $130 to $150 per month is included in the MOU and provides a new four tier system giving maximum payment to employees who complete 20 or more years of service. Those who retire with five or less years of service receive no benefit. What was the benefit prior to this change?
The challenge for the city council is to stop this step process and avoid the argument of "internal equity" that is used over and over to continually raise salaries. Employees need to be compensated fairly and we do have a high cost of living in the area, but when benefits break the bank, the losers will ultimately be employees that depend on collective bargaining to protect their interests. The idea that "united we stand and divided we fall" has significant meaning for both sides of a negotiation. If there is money in the budget for salary increases, then why are we being told there is none for additional safety personnel, capital improvement projects and maintenance?
It appears that a major round of negotiations will begin next year. Those at the bargaining table need to keep in mind that increasing salaries and benefits - no matter what terminology is used - combined with a shrinking budget is a losing proposition.