Thursday, March 10, 2011

Collective Bargaining Abuse Examples in Wisconsin

Earlier this week, Wisconsin Governor Scott Walker’s office released some specific examples of how collective bargaining abuses significantly increase costs to Wisconsin taxpayers, and how reforming collective bargaining in the state will save taxpayers millions of dollars annually (link here, it's fixed now).  I'm sure these collective bargaining abuses are common in other states as well, and helps put the whole issue into perspective:

1. In 2009, the City of Madison’s highest paid employee was a bus driver who earned $159,258, including $109,892 in overtime, guaranteed by a collective bargaining agreement.  In total, seven City of Madison bus drivers made more than $100,000 per year in 2009.

2. Correctional Officer collective bargaining agreements allow officers a practice known as “sick leave stacking.”  Officers can call in sick for a shift, receiving 8 hours of sick pay, and then are allowed to work the very next shift, earning time-and-a-half for overtime.  This results in the officer receiving 2.5 times his or her rate of pay, while still only working 8 hours.

In part because of these practices, 13 correctional officers made more than $100,000 in 2009, despite earning base wages of less than $60,000 per year.  The officers received an average of $66,000 in overtime pay for an average annual salary of more than $123,000 with the highest paid receiving $151,181.

3. Under the Green Bay School District’s collectively bargained Emeritus Program, teachers can retire and receive a year’s worth of salary for working only 30 days over a three year period.  This is paid in addition to their already guaranteed pension and health care payouts.

4. Due to a 1982 provision of their collective bargaining agreement, Milwaukee Public School teachers actually receive two pensions upon retirement instead of one.  The contribution to the second pension is equal to 4.2% of a teacher’s salary, with the school district making 100% of the contribution, just like they do for the first pension.  This extra benefit costs taxpayers more than $16 million per year.

5. Some state employees, due to the nature of their positions, are required to carry pagers during off-duty hours in order to respond to emergency situations.  Due to the collective bargaining agreements, these employees are compensated an extra five hours of pay each week, whether they are paged or not. For an employee earning an average salary of $50,000 per year, this requirement can cost more than $6,000 in additional compensation.

6. Milwaukee Public Schools teacher Megan Sampson was laid off less than one week after being named Outstanding First Year Teacher by the Wisconsin Council of English Teachers.  She lost her job because the collective bargaining agreement requires layoffs to be made based on seniority rather than merit.  Informed that her union had rejected a lower-cost health care plan, that still would have required zero contribution from teachers, Sampson said, “Given the opportunity, of course I would switch to a different plan to save my job, or the jobs of 10 other teachers."

7. As a cost cutting measure, Racine County began using county inmates to cut the grass in medians and right-of-ways at no cost to the taxpayers.  A county employee union filed a grievance indicating it was the right of government workers to cut the grass, even though it would cost the taxpayers dramatically more.

27 Comments:

At 3/11/2011 2:07 AM, Blogger randian said...

Even if you ban collective bargaining, you still haven't prevented the buying of public employee money and votes via unilateral salary and benefits giveaways.

 
At 3/11/2011 6:52 AM, Blogger geoih said...

Welcome to the natural culmination of the unlimited democratic state.

 
At 3/11/2011 10:58 AM, Blogger Che is dead said...

"Even if you ban collective bargaining, you still haven't prevented the buying of public employee money and votes via unilateral salary and benefits giveaways."

And that is why the reformers have made sure to include a provision barring the state from collecting union dues on behalf of the public employee unions. Now, the employees will have to individually choose to pay those dues, writing and mailing that dues check themselves. In Wisconsin, that could be as much as $1000 a year. Many public employees who have been forced to support the unions militant agenda may decide to keep the money instead, making it much more difficult for the unions to buy political influence.

 
At 3/11/2011 11:36 AM, Blogger Benjamin said...

I am fine with bashing Wisconsin employees who are overpaid on the public dime.

How about Department of Defense employees who retire after just 20 years of service, and get full pension for life, and full medical coverage for life, all at taxpayers expense? Why is that never the issue?

VA and veterans benefits now cost more than $100 billion a year, and are rising sharply.

$100 billion a year--I can remember when LBJ's whole budget was $100 billion. Now we spend that on veteran's benefits and medical alone.

 
At 3/11/2011 11:38 AM, Blogger Benjamin said...

Put another way, every family of four kicks in about $1,200 a year, just to pay veteran's benefits and medical. And that number is rising sharply.

 
At 3/11/2011 12:04 PM, Blogger Buddy R Pacifico said...

Sick Pay seems to have become Holiday Pay so, let's be honest and rename it Flexible Day's Pay. Flexible Day's Pay is not part of the work week and should not count as a worked day, to extort overtime pay.

 
At 3/11/2011 12:10 PM, Blogger Jason said...

Yet more evidence that unions represent themselves and their membership, not "the working man" and most certainly not the taxpayer.

Good for Wisconsin. Now let's talk Michigan...

 
At 3/11/2011 1:01 PM, Blogger Marko said...

I am an employment attorney, and I have seen similar stuff in private sector unions that would curl your hair. For example, employees terminated after being caught on video tape stealing company inventory being returned to work by arbitrators, or a white employee terminated for admittedly shouting an offensive racial epithet at a black employee (the epithet started with an "N") being returned to work by an arbitrator. I have seen tons of these cases, where an arbitrator determines that union rules prohibit termination in ridiculous cases, when the rules do no so such thing. The company basically has no recourse in such cases.

Most people don't know about these things because they are usually confidential. Only in-house counsel and high level HR employees are aware of these crazy cases so it doesn't cause outrage in the ranks of every day hard working union employees.

 
At 3/11/2011 1:44 PM, Blogger Hydra said...

So what you are saying is that the people doing collective bargaining are smarter than management?

If Greed is good a la Friedman, why not for the unions?

So unions, democracy, and any kind of organization, including corporate governance is wrong, because some shareholders may force an action on a minority who disagree?

Are there never any bargaining abuses from the management side?

 
At 3/11/2011 2:05 PM, Blogger Marko said...

Hydra, I think the answer to your question is that trade with unions is not free. There is only a problem with unions when governments grant them special protections and powers that go far beyond the powers the employer has. Without these special protections, employee still have the 'power' to sell their services to the highest bidder, and negotiate on their own for their best job or quit the job if they don't like it. They can even band together with others to do the same thing. The abuse comes when a government then grants restrictions on the freedom of the employer to also have the freedom to hire and fire works at the price they can in the market, like they do with union protection laws (like the NLRA).

In this case, a state government for political reasons gave the unions too much power, and then the unions not surprisingly abused that power to win concessions that would never have otherwise been agreed to by the government. Here is your example of "unfair trade" - when the trade isn't free because the government has put its thumb on the scale to give more power to employees than they would otherwise have based on their abilities and value.

 
At 3/11/2011 2:53 PM, Blogger DnQuiggs said...

How does the listing in this post, citing nothing more than a series of anecdotes, contribute to having a serious discussion on this subject matter? There is no context provided and the data reeks of sampling bias. For example, do we know whether the high salaries listed are part of a statistical anomaly? Wouldn’t it be better to look at the distribution in percentage terms in regards to high earners as opposed to absolute numbers in order to give the reader a sense of scale? Perhaps management did a cost benefit analysis and had an employee work 16 hour days because it was cheaper than having two people work 8 hour days. Besides this point, what benefits were the employees providing and was this benefit (and the revenues brought in) worth more than the wages paid? Also, on bullet point five, I know several people who work in different fields who are paid a small percentage of their salary to work as on-call employees, if fact in many ways you could say that this is a fairly standard procedure. Why is there no comparison to that fact that a nurse getting paid $50,000 a year may also make an additional $6,000 for this on-call service? In addition to this, is this point really relevant to the overall discussion? Instead of vilifying this person as a “state employee”, shouldn’t we analyze what the actual responsibilities of the employees were in order to justify whether working on-call makes sense? When we look at the specific career of this employee, perhaps the on-call time actually makes sense.

This post is similar to many of the sloppy articles that you see in MSM regarding issues like the financial crisis. It seeks to impress by throwing out one-sided figures in order to argue a point, but offers very little in regards to comprehensive analysis of the issue.
http://hittheone.blogspot.com/

 
At 3/11/2011 3:50 PM, Blogger Michael said...

The pager example isn't really valid, being on call means they have to be available during that time to respond. Want to go to the game and enjoy a couple of drinks? Can't while you're on call. Want to go out of town for a weekend vacation? Can't while you're on call. Now, I'm sure people cheat and do have a few beers or whatever, but it's an additional duty and I'm unclear why compensating for it is such a bad thing.

 
At 3/11/2011 3:59 PM, Blogger harris71 said...

Marko said...
Hydra, I think the answer to your question is that trade with unions is not free. There is only a problem with unions when governments grant them special protections and powers that go far beyond the powers the employer has.
===================================

I have a union trying to get in to my company. The union got enough votes to get the NLRB to order an election and the propaganda from the union has been relentless. Phone calls, e-mails and letters loaded with carefully worded half-truths, being way-layed during work hours by groups of employees pushing union b.s., it's non stop.

During the monthly grip session meeting with our supervisor, several of us asked questions pertaining to the union, the company's position, anything to get an idea of the whole picture.

Her response. She is forbidden by law to even say the word union in any conversation with employees while the unionization process is underway. Any thing she says can be used by the union to file a lawsuit against the company for unfair labor practices, even if her statement would point out some of the outrageous lies, and we already know that they are lies, put out by the union.

The whole union thing is so tilted in favor of the unions, it's enough to gag a maggot. The union can say and do anything it wants. The company can't utter a word.

 
At 3/11/2011 4:08 PM, Blogger oldfarcut said...

1

 
At 3/11/2011 4:28 PM, Blogger oldfarcut said...

"The union can say and do anything it wants"

Years ago the union took over my company. You went to work one day and there was a bunch of the most useless f**ks in the company standing there with cards saying Sign here or don't bother to come to work tomorrow, We're putting a union in here. I was young, what did I know. Working conditions got positively awful, with the us vs. them attitude. The company couldn't compete and eventually closed.

That's why unions have been so successful in the public sector (state/county/municipal office worker's union, prison worker's union, state road worker's union, and less we forget the God Almighty state teacher's.....After all, you want GOOD teaching don't you.....union.

Having trashed American industry with its incessant greed and sent all of the productive jobs overseas, government is the only thing left for these thugs. You can't outsource the state bureaucracy to some phone center in Bombay, and the taxpayers have deep, bottomless pockets, at least in the union's minds.

I believe that this delusion is finally starting to come back and give public unions a much needed kick in the pants. The taxpayer are finally starting to get wise.

Better paid does not make you better in what you do, does not make you more conscientious, more focused, more ready to give your all, better paid simply means that you make more money......period!

 
At 3/11/2011 4:48 PM, Blogger Che is dead said...

"Perhaps management did a cost benefit analysis and had an employee work 16 hour days because it was cheaper than having two people work 8 hour days."

This line of argument is really immaterial since the cost of labor, whatever it is, was not arrived at through competitive bidding. Instead, public employee unions are simply granted what are essentially no-bid contracts at the exclusion of the private sector and subject to periodic review by politicians - who if they are Democrats, the unions have purchased - and with whom they collude to fleece the taxpayer.

"Besides this point, what benefits were the employees providing and was this benefit (and the revenues brought in) worth more than the wages paid?"

Since the only wages referred to in this post are those of bus drivers and correctional officers, and since every city bus service operates at a substantial loss and private prisons operate much more efficiently and cheaply than public prisons, the answer to your question is that the benefit was not worth more than the revenue brought in.

"This post ... offers very little in regards to comprehensive analysis of the issue."

It's quite obvious that the post was not intended to provide a "comprehensive analysis of the issue", but was meant by both Governor Walker and Dr. Perry to simply highlight some of the abuses of collective bargaining.

 
At 3/11/2011 4:48 PM, Blogger Walt G. said...

Why would a city need to work a bus driver overtime? Is it cheaper than hiring another driver? If so, isn't the bus driver saving the city money? If it's not cheaper, why don't they hire another driver?

 
At 3/11/2011 5:32 PM, Blogger lovepackards said...

Every place I go in my business travels, companies are working existing employees into the ground with overtime rather than hire new employees, even when people leave thru retirement or job changes.

One secretary in a pers.dept. told me that it actually is cheaper to pay existing employees overtime, than to hire a newbie, even though the newbie will be making less money.

An employee is already on the books for pay, health benefits, pension withholding, income tax withholding, unemployment insurance, workman comp, and the list goes on and on and on. Most of these payments into all these funds dependent on NOT the employee's salary, but just being a body that shows up to punch the time clock. And, according to the last figures I read, for every 12 people hired, the average company has to hire a 13th person to handle all of the federal, state, and local regulations and tax paperwork for the first twelve.

In many cases it actually is simpler and less expensive to give existing rank and file all the overtime they can handle.

 
At 3/11/2011 8:12 PM, Blogger juandos said...

"So what you are saying is that the people doing collective bargaining are smarter than management?"...

LMAO!

Good one hydra, its almost pseudo benny like in its simplicity...

So hydra do you know who the management is?

Could it possibly be someone or maybe several someones looking to buy votes?

"If Greed is good a la Friedman, why not for the unions?"...

It was, just ask the bus driver...

Better yet ask the head honchos of the public sector unions in Wisconsin...

 
At 3/11/2011 10:56 PM, Blogger Jason said...

Is it cheaper than hiring another driver?

Walt, I'll bet that it is not cheaper to hire another driver because of union agreements. Damned if you do, damned if you don't...

Consider this, how hard is it to lay off union employees at GM...even today?

 
At 3/12/2011 11:40 AM, Blogger Walt G. said...

"Consider this, how hard is it to lay off union employees at GM...even today?"

It's easy to lay off GM workers today, but it can be expensive the first couple of years. There is no jobs bank anymore or any benefits except recall rights afer two years.

 
At 3/12/2011 3:41 PM, Blogger denny said...

if it were not for the unions,employees would not have the protection they have.how would you like it it if you get 8 paid holidays off a year,,and another employee dont pay union dues,the union is the one that negocited the 8 paid days off,and also set the pay scale,an employee pays uniuon dues and the union negocated a wage for a job,and a person comes in and gets the same benefits the the UNION gets for the employees,why should a non-union paying person get the benefits that that the UNION got for the union dues paying person.and why you people on here feel that the union caused all this money problems because of some benefits that union dues paying person gets.the problem in wisconsin is so black and white written on a wall,that stevie wonder could see.why dones a govenor give 1.3 billion in tax breakes,and says the state is 1.3 billion in the red and want to take it from the workers?they union members have agreed to pay into their health care and pensions.the govenor just had all this planned before he became govenor.dont blame the union workers for not wanting to cut their pay because the govenor gives a tax break,and noew wants yhe workers to pay for it!!!

 
At 3/12/2011 3:52 PM, Blogger denny said...

look at this problem that the govenor created in wisconsin.how would you like it if you boss comes and tells you that he has to cut your pay in half because he wants to buy new equipment.you have a car loan,a mortgage and other bills based on what you were told your going to be paid.now you just got your pay cut in half,you cannot have the same life style on half your pay.so now you got to sell your house,sell your car,all because you bought these things based on what you agreed with your boss that you were going to be paid.he cut your pay,ruined your current life style because he wants to buy something.IT WOULD NOT BE FAIR WOULD IT?????????

 
At 3/12/2011 6:15 PM, Blogger juandos said...

"if it were not for the unions,employees would not have the protection they have"...

Hmmm, what protections are you specifically refering to denny?

I've been a union member since '76 and those alledged and real protections have for the most part become the stuff of legends and on the odd occassion an actual service...

"how would you like it if you boss comes and tells you that he has to cut your pay in half because he wants to buy new equipment"...

denny it happens all the time in the private sector...

Consider the recent increased costs in energy and if a business needs energy to stay in business (which business doesn't?) then the costs have to be made up somewhere else or the business may go out of business...

"now you just got your pay cut in half,you cannot have the same life style on half your pay"...

Well now, that's a damned shame but it happens and it has always happened to one degree or another...

"IT WOULD NOT BE FAIR WOULD IT?????????"...

You're just finding out NOW that life isn't fair?!?!

 
At 3/12/2011 7:19 PM, Blogger randian said...

IT WOULD NOT BE FAIR WOULD IT?

Would you prefer to be fired? If I'm your employer and I can't reduce your pay in bad times, instead of dropping wages 10% across the board I'm going to fire 1 in 10 of my employees instead.

 
At 3/12/2011 8:11 PM, Blogger Jason said...

Trying to make things fair is a fool's errand. Although we appear to be a country of fools at times.

 
At 5/09/2012 8:28 AM, Blogger VangelV said...

Careful now. Let us be clear that Walker is not against unions and is not exactly a fiscal conservative. He is simply against Public Unions. I think that Reason nails it.

...After all, he once declared: “The process of collective bargaining, as usually understood, cannot be transplanted into the public service.” There is something obscene about collective bargaining rights for government employees whose appetites are unrestrained by market discipline. When private-sector employees demand more in compensation than they generate in value, their companies go out of business. But when government employees do the same, they burden citizens with higher taxes and debt, which is one reason why Wisconsin—like nearly every other state—is saddled with unsustainable state worker-related legacy and other costs. This is why no president’s administration—Democratic or Republican—has ever advocated such rights for federal workers.

But Walker is like FDR not just in his antipathy to public-sector unions, but his support for mandatory private-sector unionism. He has pledged not to make Wisconsin a right-to-work state (like its neighbor Indiana), where workers in union shops would no longer be required to pay mandatory dues as a condition of employment. This is a big mistake: It will undercut Wisconsin’s competitiveness and make it harder to restore robust economic growth.

That, however, is not the only way in which Walker reflects an FDR-like understanding of the economy. Contributing to his political vulnerability is his previous campaign pledge to “create” 250,000 jobs—as if that’s something that politicians can control. So far, he’s added only 15,000. And last month, the Badger State lost jobs, giving it the worst job creation record in the country.

Walker is blaming political uncertainty, but what’s his cure? Not wholesale tax reform (although property taxes have declined slightly on his watch) or regulatory overhaul, as would befit a “free-market ideologue.” Instead, he announced this week that he’ll pump $100 million into rejuvenating the depressed parts of Milwaukee. His opponents are condemning this as a vote-grubbing gimmick. But that makes no sense, given that Milwaukee is a heavily Democratic area and this election is extremely polarized along party lines with very few undecideds. The more likely reason is that Walker seriously believes that he can buy growth and jobs through such “investments.”...

 

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