In tentative agreements with the State of Oregon, union bargainers agreed — for the first time — to give up fully-paid health coverage.
Oregon AFSCME (American Federation of State County and Municipal Employees) reached agreement July 19 on a contract covering 3,000 state workers, and three days later, Service Employees International Union (SEIU) Local 503 settled for a group of 23,000 workers. The terms are basically the same. If approved, the two-year contracts would run through June 30, 2013.
Under the agreements, workers would pay 5 percent of the cost of health coverage starting Jan. 1, 2012. That would amount to $50 to $75 a month, depending on which plan is chosen and how many dependents are included. The amount will rise in the second year to between $52.91 and $78.75.
“It’s painful, but we had to deal with reality,” said Oregon AFSCME Executive Director Ken Allen. “State workers in Washington pay 15 percent, and in California 18 percent. It was serving to hold our wages down.”
“We’ve seen benefits erode over the last 15 to 20 years in the private sector, and that’s now coming home to roost in the public sector as well,” said Local 503 Executive Director Heather Conroy.
Members earning less than $2,696 a month will get a $30-a-month subsidy toward their share of the cost. SEIU had earlier pushed for the employee health contribution to be calculated as a percentage of salary, rather than a percentage of the cost, as the state proposed.
The contracts also contain modest cost-of-living raises, one partially-delayed salary step increase, and two more years of periodic unpaid furlough days.
AFSCME members get a 1.5 percent across-the-board cost-of-living adjustment Dec. 1, 2011, and 1.45 percent increase Dec. 1, 2012. SEIU members get the same, except the second increase comes a month later. The previous contract contained no cost-of-living increases, though a new top step was added to the salary schedule which amounted to a 5 percent raise for the most senior workers. Nationally, the consumer price index rose 1.6 percent last year after falling 0.4 percent the year before.
In normal times, state workers also get annual step increases of about 5 percent until they reach the top step, but those have been suspended in tight budget times. The new agreements grant one step increase during the two-year period. Eligible workers will get half the increase on July 1, 2012, and the second half six months later.
Workers will also take 10 to 14 unpaid furlough days over the two year period. Workers earning below $2,450 a month will take 10 furlough days; between $2,450 and $3,100 will take 12 days, and those earning more than $3,100 will take 14 furlough days. Ten of those days will be full-scale closures for state agencies that can close without endangering public safety. The remainder of the furlough days will be worked out between workers and their managers.
This is the second contract in a row to include the furloughs, but a binding agreement commits the governor not to propose furloughs in his next two-year budget proposal.
Significantly, the state backed off a proposal to end its practice of paying workers’ 6-percent-of-salary contribution to the Public Employee Retirement System.
Both agreements were reached after marathon bargaining sessions. SEIU settled shortly before midnight July 22, while AFSCME’s deal was reached July 19 after 26 straight hours at the bargaining table. Allen said he remained awake throughout, though some members of the AFSCME bargaining team were nodding off.
Ratification votes could stretch into mid-August. But both union bargaining teams are recommending passage.
“It’s a tough settlement,” Conroy said. “But we do believe that, given the times we’re in, we were able to protect the lowest-wage workers in the contract, and we feel good about that.”
“These were the hardest negotiations we ever had,” Allen said. “We wanted our workers not to go backwards, to get into the plus column during these few years, and I think we’ve achieved that.”