Two unions that represent nearly 30,000 Oregon state workers reached tentative agreements this month that would provide a cumulative 13% raise over two years.
Service Employees International Union (SEIU) Local 503 and Oregon AFSCME (American Federation of State, County and Municipal Employees) reached the agreements July 5 and July 6, respectively. Their members will take ratification votes over the next few weeks, with final tallies expected in August.
SEIU Local 503 represents about 25,000 workers at more than two dozen state agencies, including the Oregon Department of Transportation, Oregon State Hospital, and Oregon Department of Human Services. Oregon AFSCME represents 7,000 workers in 22 state offices or departments, including 3,300 who will be covered under this contract.
The terms of the agreements are similar. Under both, workers would receive a 6.5% cost of living adjustment (COLA) in December 2023 and a 6.55% COLA in January or February 2025. (The exact date will depend on how much funding lawmakers allocate to state agencies). The agreements also include one-time bonus payments of $1,500, which will be distributed in September 2023, following the contract’s ratification.
For SEIU, it’s the biggest COLA workers have seen in decades. Under the agreement, no state worker represented by Local 503 would make less than $21.06 an hour after April 2024.
For Oregon AFSCME-represented workers, the raises are the highest anyone at the union can remember, said spokesperson Milana Grant.
The raises come after state workers’ purchasing power lost ground to inflation over the last two years. According to the U.S. Bureau of Labor Statistics, the price of goods and services rose 12.3% between June 2021 and June 2023 — more than double the 5.6% wage increase the two groups of state workers got in the two-year contract that covered the same period. In other words, state workers’ wages lost 6.7% of their purchasing power to inflation in the last two years.
Whether workers catch up depends on the inflation rate over the term of the contract. If annual inflation is less than about 3.1% each year for the next two years, state workers will be back to their June 2021 purchasing power by June 2025.
“Losing buying power has put our members on an economic edge that has been scary for some of them,” SEIU Local 503 Executive Director Melissa Unger. “(This agreement) starts to make up some of that lost ground, but there is still more work to be done.”
Grant said the high inflation rates encouraged the AFSCME bargaining team to “really go in big” to try to catch up wages. Both union bargaining teams were able to negotiate higher COLAs by pushing out the month the increases take effect. The bonuses provide immediate relief while workers wait for their raises.
“That one-time payment is really one way of trying to help folks now because the COLA isn’t going to happen until December,” Grant said. “We want to make sure folks have money in their pocket now.”
