A Virtual Look at Contract Negotiations: A Long Spring for the Negotiators on Both Sides.

Contract negotiations are multi-faceted and complex.

Different teams sitting in different rooms mulling over printouts, offers and counteroffers; distressing amounts of time is spent caucusing with your team plotting/creating responses, crafting arguments supporting positions and waiting, waiting, waiting for a response/counter offer from the other side. The process is laborious and incremental, with many trips down the wrong path, with frequent dead ends.

As the sides close in on a settlement the negotiations tend to become round-the-clock, pushing for that last comma and semi colon in the right place.

Years ago I served on the negotiating team – the final, lengthy session, the presentation to the union executive board, the delegate assembly … I think we went fifty-four straight hours.

Under the previous administration negotiations never began, our former mayor chose leaks to the press and unkind op eds in lieu of actual negotiations.

In the “money” room the sides have to decide on the numbers – what would each percentage point cost in each year? How much would each percent from 11/1/09 until 6/30/10, and each subsequent budget cycle (7/1 till 6/30) cost out? Is the time pensionable, and, if so, how much would this add to the cost? Remember: the city contributes a rate determined by actuarial calculations each year; if teachers retired between 11/1/09 and the date of the new contract are they entitled to retro pay and a recalculation of their pension? If the answer is “yes,” how much would it add to the dollar cost of the agreement?

Before you can reach a resolution you have to agree to price tag of each negotiated segment.

The union numbers people parse past city budgets, current budget proposals, revenue and expense projections, tax receipt projections and on and on … How many new buildings are in the pipeline and how much in taxes will they generate? Can we anticipate increasing tourism and place a price tag on the anticipated additional revenue?

In another room the health plan negotiators representing the Municipal Labor Coalition (MLC) are engaged in the enormously complex discussions. It is a three-way discussion: the city, the union and the feds. How does the Affordable Care Act impact health plans for NYC active and retired employees? Are current active and retired employee health plans “Cadillac” plans, and, if so, are elements of the plan taxable?

How will retroactive salary be paid out? All at once? Over two or three budget cycles?

In another room the “non-budgetary” issues are on the table.

Management is wary about relinquishing managerial prerogatives; unions defend what has been previously embedded in the contract.

Once the parties have an agreement the union has to “sell” the settlement to the membership and the mayor has to “sell” the settlement to the media/the elites and the broader public.

Will the headline praise or pan the settlement?

Teachers have told me, “Who cares what the settlement costs, that’s not a concern of the union, the city will just have to figure it out, we’re entitled to a raise, we earned it, and the city just has to pay it?

My answer is: Wisconsin.

Scott Walker, the Governor is Wisconsin, and a cooperative legislature, effectively ended collective bargaining in Wisconsin. Public employee unions in Wisconsin are beyond life support – they are moribund.

Read the frightening story: http://www.nytimes.com/2014/02/23/business/wisconsins-legacy-for-unions.html?hpw&rref=business

Some of you may have gone to Wisconsin to support our brothers and sisters, participated in recall elections for state senators who voted on “the wrong side,” all to no avail. The public was not sympathetic to the unions, and, Scott Walker is now mentioned as a possible presidential candidate.

The “unofficial” voters on any contract settlement are the people of the City of New York.

The teachers union has spent years working with communities across the city: parents, civic associations, and other unions, block associations, electeds on the local level, faith-based leaders, in the parlance of labor, an “organizing model.” Thousands upon thousands of union members participating in local campaigns, from volunteering to spending time in Louisiana after Katrina, to working right here in New York City on Hurricane Sandy relief, from going to Haiti to work on field hospitals to trekking with parents to fight for a stop light on a corner or to prevent a school from closing or to fight against co-locating a charter school in a public school building.

The work of the union has paid off, Sol Stern in the Manhattan Journal (Special Issue, 2013) wrote,

according to a poll of city voters commissioned by the Manhattan Institute and conducted earlier this year by Zogby Analytics … New Yorkers now trust the oft-maligned teachers more than they trust the mayor’s office: almost half of all respondents said that teachers should “play the largest role in determining New York City’s education policy,” compared with 28 percent who thought that the mayor-appointed schools chancellor should.

The public is fickle, to continue the support of the populace union leadership has to craft a contract that is viewed by the public as fair to teachers and fair to the city.

Mayor de Blasio’s State of the City speech addressed affordable housing,

“In total, we pledge to preserve or construct nearly 200,000 units of affordable housing – enough to house between 400,000 and 500,000 New Yorkers — to help working people by literally putting a roof over their heads” … Mr. Bloomberg invested heavily in affordable housing, but Mr. de Blasio won office promising to do more. He has said he would require major residential projects to include units for low- and moderate-income residents. He has also said he would invest $1 billion of city pension funds in creating lower-rent units.

Decisions on the investment of pension funds are controlled by the trustees of the funds and require the approval of the union-appointed trustees who have a legal fiduciary responsibility. While there is no connection whatsoever between the contract negotiations and the pension fund trustees the enthusiastic support of the investment by the union could resonate well with New Yorkers.

In 1975 as the city was teetering on the edge of bankruptcy Al Shanker supported a plan in which the Teacher Retirement System purchased city bonds to avert default, a default that could have freed the city of all contractual responsibility, a la Detroit today.

In one room a team is discussing the teacher evaluation plan.

The elements of the plan are set in law and regulation and a final plan must be approved by the state commissioner. The current New York City plan is a mess – the plan was written by the commissioner and basically is much too complex. Both management and labor want to simplify the plan; however, the plan must be approved in Albany.

Yes, complex with many, many moving parts.

At the same time the negotiators are engaged the city budget plans are moving forward. The mayor’s proposed budget is silent on dollars for collective bargaining. The City Council will hold hearings, the fifty-one council members will argue for projects for their districts, Community Planning Boards will support or oppose budget initiatives and in the waning days of June a budget will be agreed upon.

The unions and the mayor want to reach an agreement – there are no guarantees – the economy impacts negotiations – so – don’t spend that retroactive salary just yet.

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2 responses to “A Virtual Look at Contract Negotiations: A Long Spring for the Negotiators on Both Sides.

  1. Yes, complex, many moving parts and each decision impacts on all the others going beyond the cost of this contract to what’s available and what the pattern will be for the remaining city contracts.

    Nonetheless, I believe that the UFT members are focused on the pattern that Bloomberg set (when he was trying to buy UNion acceptance of his third term bid) of 4% and 4% covering the period from 11/1/2009 through 10/31/2011. The UFT, if it settles first, will be setting the pattern for the other Municipal unions going forward.

    The membership believes they should get the “pattern” for the first two years of the new agreement, but there may be more creative ways to put tha toney into this contract that will not make it a huge drain in this budget cycle. The key things to keep in mind are that any payment should go into the schedule and be pensionable (no non-pensionable, lump sum payments that don’t raise the base and that penalize techers approaching retirement).

    The other issue whether any retroactivity will be paid to teacher swho retired after 11/1/2009. These retirees remain members of the UFT and vote in UFT elections. Will they feel very badly slighted by the Union leadership if they are left out of the negotiations. They believe that having worked those years, they are entitled to some benefits.

    I would offer a modest proposal (whose feasability and legality I am unsure about). Let the city pay any retroactivity that retirees would have earned directly to TRS so that it can recalculate pensions as if the members had earned the salary. This gives the fund the money it needs to make the payments which are generally only a portion of the actual salary earned. The retirees do not get cash but those years are past and those bills are already paid. Going forward the retirees get increased pensions (and an increased pension base for calculating COLAs) which will mean a great deal more than getting some cash in hand. A solution like this makes it clear that the UFT is negotiating for all its members.

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