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Iowa negotiators offer state union workers wage freeze, higher health insurance rates

This news story was published on December 2, 2012.
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Rod Boshart, CR Gazette –

UPDATE: Gov. Terry Branstad’s negotiators are asking the state’s largest employees’ union to take a wage freeze for the next two years, pay a greater share of their health insurance costs and make major concessions that the union’s leader called “appalling,” politically motivated and a “slap in the face” to rank-and-file members that will not be accepted.

The state’s proposal seeks to freeze wages across the board for two years, freeze step increases for qualifying workers for two years, and require all state employees to pay 20 percent of their health insurance premiums along with higher deductibles, higher maximum out-of-pocket expenses, higher dental insurance premiums and higher co-payments for prescription medications.

In making the state’s counter offer to representatives of American Federation of State, County and Municipal Employees Council 61, Leon Shearer, a Waukee attorney and top Branstad administration negotiator, praised AFSCME for its past successes before laying out a proposal that seeks to undo much of the current contract language in a new two-year pact that would run from July 1, 2013, to June 30, 2015.

“Over the last decade I think your union and your leadership has done an outstanding job of negotiating on your behalf,” Shearer said. “You’ve got management rights that should have not been given to you but they were. You’ve got a health plan and a compensation plan that is the envy of the private sector and the contiguous states, and you negotiated it and you did a good job.

“On the other hand, in that past decade, I think management has not done its job to look out for the best interests of the state of Iowa and our challenge today on our behalf is to try to address some of these management rights issues and to address the alignment of our compensation with the comparative group,” he added. “And, I don’t for a minute think that it’s anything but a difficult task.”

Shearer then spelled out details calling for state employees to shoulder more of the cost for their health-related benefits, diminish or eliminate some workplace rules governing grievances, bumping and transfer rights, discipline and discharge issues, stop collecting dues for the union’s political action committee, delete four additional holidays for employees eligible for overtime, and increasing the state’s share of employee life insurance coverage.

Shearer said the proposed health-related changes were in line with recommendations of a consultant hired by the state Department of Administrative Services that identified a potential “cost avoidance” of $116 million if all state workers would pay 20 percent of their health insurance premiums. The study indicated that 88 percent of state workers currently do not contribute anything toward their health insurance premiums.

Two weeks ago, AFSCME negotiators made an initial offer that requested a 1 percent across-the-board pay increase in the contract’s first year and 2 percent in the following year for the roughly 20,000 workers it represents. The union also asked to maintain annual 4.5 percent step increases for employees who qualify based on their date of hire. The AFSCME proposal did not include any changes to its health-care coverage.

State Department of Management officials calculated that AFSCME’s initial offer would cost the state $122 million more in fiscal year 2014 and $159 million more in fiscal year 2015 if the union proposal was accepted and applied to all state employees – including noncontract, management and confidential classifications.

However, AFSCME Council 61 president Danny Homan blasted that report as inaccurate and misleading because the cost of providing the AFSCME request solely to the union’s employees would be significantly less. He also said the calculation included health insurance and retirement costs that state negotiators could not explain because they said the information came from the Department of Management, not them.

“This governor has put a proposal across the table today that takes away rights and benefits that employees have had in this state for over three decades. It is a clear indication to me, and it will be to our union, that he is attempting to take away both benefits and money out of their pockets,” Homan said in an interview after Friday’s bargaining session.

The AFSCME leader said the state’s attempt to “steal away benefits out of our contract” was based on an invalid comparison of wages and benefits with other employees in the private and public sectors, and the proposal to freeze step increases was an effort to “take away stuff now that existed during Terry Branstad’s entire term of office the first time he was governor.”

Likewise, he said, the state proposal tried to change discharge and discipline provisions that date back to 1977 and, if deleted or modified, would leave employees vulnerable to the whims of supervisors with the only recourse for fired, demoted or aggrieved employees to sue the state without provisions for “just cause” discipline.

“We gave up money to get the health insurance we currently have. We gave up across the board (wage raises), we modified plans to get to where we’re at today. This governor now wants to say, I don’t care what you’ve done for the past three decades, you’re just going to give up your insurance and you’re going to take a wage freeze,” Homan said. “I’ve never seen an employer that has done this” in his 25 years with the union, he added.

Homan said Friday’s developments made reaching a voluntary settlement “extremely tougher than what I first thought.”

“This proposal is a complete slap in the face to every hard-working state employee in this state,” the AFSCME president said.

“If any of this happens, it’s going to be a huge setback. This is a big deal. This guy is attacking basic union rights that have existed in this country for decades,” Homan added. “This is politically motivated. They can say it isn’t but what they’re doing strongly indicates to me that it’s politically motivated.”

Talks between the two sides now move behind closed doors. If there’s no agreement reached by January, a mediator will come in. Negotiations are subject to binding arbitration for both sides if the mediation fails to work out a deal. A tentative arbitration date is set for Feb. 11 and arbitration has to be completed by March 1 and a new two-year deal signed by March 15.

Shearer acknowledged in an interview that the state’s counter offer “is not going to make it quicker” to reach a settlement. “We will get it done within the time frame, one way or another. We’re optimistic. There’ll be work. We’re going to give it a hard effort and we know the union will. We’re optimistic we can give it a real try.”

Homan said he was “appalled” by the state’s position after presenting “a serious, modest” proposal to the state on Nov. 16. He said his union would bargain in good faith but expected it would be more difficult to reach a voluntary agreement, adding “I believe they’re going to have a very hard time prevailing with their proposal in front of a third-party neutral.”

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24 Responses to Iowa negotiators offer state union workers wage freeze, higher health insurance rates

  1. Avatar

    blog Reply Report comment

    December 6, 2012 at 5:22 am

    There was an article a while back on the large percentage of Iowa state workers that pay nothing for their health care. It’s time this group gets in line with private sector pay. I worked at two companies with unions and the only good I could see from them was protection for the worthless trouble makers who could not hold a job on their own.

  2. Avatar

    Anonymous Reply Report comment

    December 5, 2012 at 3:32 pm

    Public servants are a drain on the private sector and produce NOTHING NOTHING !!!

    • Avatar

      happyguy Reply Report comment

      December 5, 2012 at 5:07 pm

      it isn’t the job of government to produce anything. That is the job of the private sector. I would argue that we need public servants. Firefighters, police, DOT, DHS, and the list goes on and on. How do we get by without them?

    • Avatar

      msgordy Reply Report comment

      December 5, 2012 at 8:38 pm

      Funny how Braindead didn’t mention all the people at the capitol in Des Moines. HE didn’t offer a pay freeze for himself and all the other lawmakers. Do one term and get lifetime retirement benefits. People should be bitching about this. Branstad(braindead) is also double dipping. According to him “I deserve it” Yeah right

  3. Avatar

    Anonymous Reply Report comment

    December 4, 2012 at 11:23 am

    Am wondering where the 5% raise figure is coming from? What I have found is that AFSCME is asking for a 1% raise the first year of the contract, a 2% raise the 2nd year of the contract, and no changes to the current health care structure.

  4. Avatar

    Just My Opinion Reply Report comment

    December 3, 2012 at 3:15 pm

    Somebody name me a private sector job where employees’ health benefits are completely paid by the company. I really doubt there are many of these left.

    I don’t normally agree with Gov. Branstad, but I do on this one.

  5. Avatar

    Observer Reply Report comment

    December 3, 2012 at 11:41 am

    “Part of the reason small businesses cannot afford to give these raises and benefits is because of the taxes they pay to support fat raises and benefits governments pay. What is so hard to understand about that. Why should government workers be the only ones getting big raises every year? “

    It’s called competition. I would wager that most jobs performed by a government employee (by job classifications), are not to be found in the private sector.

    Second, there are plenty of private sector jobs that pay quite well, and who’s employees are union members. Again, according to their job classifications.

    I noted that several unions in the private sector negotiated contracts his spring, with 3-5% increases of wages per year over the life of the agreements. These agreements covered several classifications of workers and crafts.

    I look not at the one or two cases, but the aggregate effect on our economy in the last four decades. Wages have not kept up with costs. In that same time period, we saw that most households were required to add a second (sometimes a third) income to maintain the same standard of living.

    That standard of living has gone down since then, particularly effecting non-skilled and factory type work. (I have clearly spelled out in past comments that the American Consumer was largely to blame for this).

    I never fault a person who wants to better themselves, it’s the American Way. I also cannot fault a group of employees for bargaining for better situations.

    Small business has always had to compete for labour as long as I can remember. Fifty years ago, you would never see a person over the age of 30 working at a fast food establishment, unless they were the owner. I remember the neighbor boys lining up for a chance at a job at Turtle Wax, as it gave them a sustainable wage and benefits. The left their jobs at small businesses without a second thought. It was the natural way of things.

    In other words, a person who owns a small business, should never have the dream of competing with a large business who can afford to pay better wages.

    And I will stand by my belief that a community cannot survive unless it has a balance of jobs which in the long run, offer wages at or above the national average. Our country has suffered enough with the overall deterioration of the standard of living, and it is beginning to show signs of stress.

  6. Avatar

    a citizen Reply Report comment

    December 2, 2012 at 10:57 pm

    Katie: Thank you. Sometimes I get too caught up in thinking that my typing/spelling suffers. No excuse, I messed up. And also, thanks for the hand slap about throwing stones. When a person loses courtesy, they have already lost the argument.

  7. Avatar

    a citizen Reply Report comment

    December 2, 2012 at 3:10 pm

    Have a non-partisan study done of what the state is offering vis a vis what the private sector is getting. If the state’s proposal is comparable to the private sector, then I don’t see what the state union workers have to complain about with the proposal. State workers have got to realize that times are changing. Govt.’s do not have the latitude, or the capital, to fund the unions contract demands as they used to. It’s time to bring some parity to the public and private sectors as per wages, benefits, and expectations of what is deserved and what is owed.

    • Avatar

      Matt Rezab Reply Report comment

      December 2, 2012 at 9:12 pm

      So you wanna compare high school dropout factory workers with skilled people who’ve earned college degrees? I have no problem with a comparison study, just be sure you’re comparing apples with apples. When you compare college graduates in the private sector with thier companions in the public sector your argument doesn’t hold up so well.

      • Avatar

        a citizen Reply Report comment

        December 2, 2012 at 10:32 pm

        Interesting that you used the phrase “high school dropout factory workers”, the key word here being “workers”. Having a job and not being an entitlement drain on society and the govt. Where in your arguement would you put the Crystal Sugar workers, who have chosen numerous times to be out of a job by rejecting a contract? Again, the key word here is “chosen”. And in regards to your comparing college grads in the private vs the public sector, I am not sure you really know what you are talking about there. Regardless, anyone who uses “wanna” and spells “thier” rather then “their” makes me question not only their education level, but also their intelligence level.

      • Avatar

        Katie Reply Report comment

        December 2, 2012 at 10:49 pm

        @ a citizen: watch it when you’re throwing stones. You spelled argument wrong.

    • Avatar

      Matt Rezab Reply Report comment

      December 2, 2012 at 11:51 pm

      Citizen, first of all I apologize for my hastily typed reply. You’re right, their is spelled incorrectly. “Wanna” was just a quick way to say “want to”, I assure you I understand it’s not the proper usage, yet I still get the idea you understood what I meant. Now let’s get to actual ideas. You seem to be saying that anyone employed by the government is not a “worker”. I would have to disagree with that premise. I would also like to know what the Crystal Sugar workers have to do with the study of private vs. public sector compensation comparisons. Lastly, simply throwing out that “your not sure” I know what I’m talking about doesn’t strengthen your argument.

      • Avatar

        LVS Reply Report comment

        December 3, 2012 at 8:09 am

        @Matt Rezab-while I resent your comments about high school drop out workers because at least these people are working for their income. It may come as a surprise to you that all people are not college material and there is nothing wrong with that. Try getting by without a janitor where ever you work or evev a garbage collector. Nasty work but someone has to do it. In my opinion they are worth a lot more than most college grads. The other point is this site is NOT a english paper it is for people to express their thoughts and who cares if they make a few typo’s or mis-spell a few words? If you can’t understand it maybe you need to go back to high school.

    • Avatar

      Matt Rezab Reply Report comment

      December 3, 2012 at 8:29 am

      @LVS-It was not my intention to suggest that individuals with college degrees are better people than those without. I was replying to a citizen’s post about disparities in compensation between public and private sector employees. I wasn’t the one complaining about typos or spelling errors, a citizen was. Finally, are you implying that only private sector employees actually work for their income?

      • Avatar

        LVS Reply Report comment

        December 3, 2012 at 9:50 am

        @Matt Rezab-I course I wasn’ implying that. I know lots of city and state workers who work hard for their money. Unfortunately I know some who do not work hard and are a drain on the system. I do believe that government workers are asking for to much in these depressed times. It is difficult for someone who uses social security for the majority of their income and has a lousey 2% increase to see them getting thousands of dollars in raises when it is our taxes that pay for it. They need to get real and be paid for what they do. I feel the same about teachers. They have the highest paying part time job in the world and always want more. That is the union way. Price themselves out of a job.

      • Avatar

        LVS Reply Report comment

        December 3, 2012 at 9:54 am

        @Matt Rezab-Sorry if I got carried away on the typo thing. It is something I get excited about. People who like to embarras other people because of typo’s or mis-spelling really set me off. No one is mistake free and they should not be made to feel bad because of it. It is nothing more than bulling people to either get them to quit posting or make them agree with their point of veiw.

      • Avatar

        LVS Reply Report comment

        December 3, 2012 at 9:56 am

        See there-I made several typo’s because I was getting worked up. I meant Bullying of course.

      • Avatar

        bodacious Reply Report comment

        December 9, 2012 at 3:51 pm

        @LVS – You bash teachers a great deal. Is there a reason for that? “They need to get real and be paid for what they do.” So, I assume you could do a better job? WHen is the last time you were in a classroom? How do you know whether or not they earn their pay? And please don’t try to rationalize what you mean by talking about one particular teacher that did you wrong.

  8. Avatar

    Observer Reply Report comment

    December 2, 2012 at 10:18 am

    Next, you will suggest that transportation companies should scale back the wages of their employees because you ultimately pay the bill.

    Let’s face some legal facts here. You have no standing in a labor dispute or labor negotiations. Period.

    Judging from your comments, you probably would settle for $75 a day for 10 hours work, seven days a week. Just because you feel that is sufficient, does not mean the rest of the workforce should.

    And you wonder why our economy shrinks. It is because communities cannot thrive without decent wages. And people like you encourage it.

    • Avatar

      Katie Reply Report comment

      December 2, 2012 at 1:01 pm

      Small businesses cannot keep pace with the raises governments give to their employees. The business I work for cannot afford 5% raises every year. It also had to go to a health package with a $2500 deductible instead of a $500 because the premium would have been $250/month higher. Part of the reason small businesses cannot afford to give these raises and benefits is because of the taxes they pay to support fat raises and benefits governments pay. What is so hard to understand about that. Why should government workers be the only ones getting big raises every year? Unless a business raises prices 5% every year and business volume stays at the same level or increases, there’s no guarantee you can cover employee raises. Income and expenses are very volatile in some businesses and it’s hard to predict your cash flow. For some businesses, it makes more sense to keep wages lower and give bonuses if they have a good year, with the understanding that won’t happen all the time.

  9. Avatar

    Anonymous Reply Report comment

    December 2, 2012 at 8:54 am

    One better! – how abouT a 15% percent REDUCTION IN SALARY FOR THESE SPOILED fat cats – the real world (private sector) you know -the people that PAY YOUR WAGES has been in decline for over 4 years while your world PUBLIC SERVANTS HAVE SEEN AT LEAST A 20% INCREASE IN WAGES AND BENEFITS – your spoiled! WAKE UP FAT CATS !

    • Avatar

      frog man Reply Report comment

      December 2, 2012 at 11:22 am

      Agreed. Public workers have it way too good. They are overpaid and over-pampered. Look at the courthouse. Secretaries there make $18 to $20 an hour but in the real world they get $10 or $12 tops. Don’t even start on how much the county supervisors make, for doing pretty much nothing. Almost impossible to change some of this.

    • Avatar

      Allen Reply Report comment

      December 2, 2012 at 6:40 pm

      (AT LEAST A 20% INCREASE IN WAGES AND BENEFITS)seems like alot. Just wondering WHO has got that much in the last 4 years, please be specific.