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The labor contracts recently ratified by two of Pennsylvania’s largest state government employee unions have been described as historic for the size of wage increases they grant over four years.
Leaders of both unions see the 22.1 % pay increases when compounded over the life of the contracts — the most in at least 20 years — as not only beneficial to tens of thousands of employees but for the commonwealth in making state government work more attractive.
They say it will aid in efforts to help state government compete with the private sector for employees and retain workers at a time of low unemployment.
While Steve Catanese, president of the Service Employees International Union (SEIU) Local 668, and Dave Henderson, executive director of the American Federation of State, County, Municipal Employees (AFSCME) Council 13, both sought bigger raises for their members in this year’s bargaining, others say Gov. Josh Shapiro’s administration gave away the store.
The state’s Independent Fiscal Office gave a price tag of nearly a $3.2 billion if the terms of the AFSCME contract are applied to all 16 state worker contracts the office reviews as well as non-unionized state employees. Critics call that excessive.
The objections raised about the yet-to-be signed agreements rankle union leaders. They spoke with PennLive about the contracts and the negotiating process. PennLive also sought input from others about the cost and the benefits the governor granted to ensure labor peace throughout his first term.
About those pay increases: The contract provides a 2.25% step increase in each of the four years as well as a 5% general pay increase this year, 2% next year, 2.25% in 2025 and 2% in 2026.
Both union leaders said they felt their members deserved more.
“Let me remind everybody that the folks we’re talking about went to work every single day during the pandemic,” said Henderson, whose AFSCME contract covers 32,500 state government employees. “Some of them put their health on the line every single day to do their job. For folks to even challenge the idea that these individuals, our members, commonwealth employees aren’t worth a 22.1% wage increase over four years is frustrating.”
Catanese, whose SEIU local represents 10,000 employees, said state workers saw the state sitting on $13 billion in reserve accounts. They knew the concessions they had to accept in past agreements. They saw lawmakers get a 7.8% cost-of-living-increase pay raise this year. Taken together, he said his union saw the increases as necessary to prevent state workers from departing for private sector jobs
“When a contract like this comes up, it’s a matter of how much do you want to invest in government services to actually make sure public essential services you need are there because the public sector is having trouble competing with the private sector for some of these jobs,” Catanese said. “If the commonwealth wants government to work, it needs to be invested in.”
According to the Shapiro Administration, there are about 6,500 AFSCME-covered job openings, 1,200 SEIU 668-covered openings, 2,700 open positions covered by other union contracts and 4,500 vacant management/non-represented positions.
On negotiating with the Shapiro Administration: Both union leaders described the negotiations as frustrating, even difficult at times but also found the governor’s negotiators to be respectful of the employees that they represent.
“I was very pleased with the respect they gave our members that had the opportunity to speak to them in regards to their concerns and issues they were dealing with on a regular basis or day-to-day basis,” Henderson said. “There were some things important to [the administration] but at the end of the day, they felt the best-case scenario for them was to move forward and get a labor agreement.”
Catanese said his team spoke of the increasing workload that some of his members are carrying along with the increasing expectations being placed upon them. The administration’s negotiators “understood the people they were negotiating with on the other side of the table were essential workers and valued employees,” he said. “The administration was professional throughout the process even when we disagreed.”
Shapiro spokesman Will Simon said commonwealth employees are critical to making government operate more efficiently and effectively.
“Taxpayers are best served when we compete for critical talent, especially in a tight labor market, and recruit and retain skilled employees with competitive salaries and benefit,” he said in a statement.
About the criticisms: Henderson called criticisms of the agreements demeaning, particularly given the service state employees provided residents during the pandemic.
“Those folks that may be casting aspersions they didn’t go to work every day like these folks did,” he said. “Some of them never came out of their office or out of their homes while we had folks going into centers, going into prisons not only jeopardizing their own health but their family’s health as well because they believe in what they do. There’s a passion and commitment and dedication from the folks who work for the commonwealth that is unbridled.”
He turned the tables on complaining lawmakers and ask them to ask their constituents if they think lawmakers deserved the 7.8% raise they received this year.
Henderson also lambasted critics at the conservative Commonwealth Foundation and Commonwealth Partners Chamber of Entrepreneurs, which engages in political activity, among others who have called the contracts paybacks for support of Shapiro’s election campaign.
“If we’re able to achieve a good contract because of our contributions than I need to ask what they’re getting for their contributions to various campaigns,” Henderson said.
Outside issues impacting talks: Catanese said negotiations took place while the main budget bill was still being worked on so the Shapiro Administration had to balance any increased investment in the state workforce with the spending limits in forthcoming budgets. Other than that, he said no other outside issue became part of the talks — including school vouchers.
The reason some skeptics entertain the thought that issue might have come into play is Shapiro supported a limited school voucher plan that AFSCME 13, SEIU 668 and other state labor unions joined the powerful Pennsylvania State Education Association in opposing. They argued vouchers would divert state funding from public schools. Skeptics quietly questioned if the governor tried to get the unions to back off their opposition through these labor agreements.
Catanese said that issue never came up.
“Nothing that was going on outside of the contract impacted what was going on at the table other than the budget in general,” he said.
General takeaway: Having wage increases locked down over the next four years provides a level of security for state employees, Henderson said.
“They can actually look forward and budget accordingly knowing that X amount of dollars is available to them moving forward,” he said.
Catanese sees the contract as a catch-up for concessions made in past contracts.
Granted, they had to agree to a quarter of 1% increase in employees’ contribution twice over the life of the new contract to help pay for health benefits (the commonwealth’s share also rose) but were able to beat back the administration’s desire to move to a premium-based employee contribution as opposed to salary-based one, along with other management demands.
Henderson preferred to highlight some of other provisions that the union succeeded in getting — boosting the lunch reimbursement to $12 or $15 from $3.50, and allowing employees to sell back up to three unused vacation days a year to the commonwealth — instead of focusing on what his union didn’t get.
What others said about the contracts:
“Government unions donated nearly $5.5 million to Gov. Shapiro’s recent campaign, and in return, he secretly negotiated contracts with union leaders that will cost Pennsylvania taxpayers $3.2 billion. In any other scenario, backroom deals that give taxpayer dollars to campaign donors would raise serious concerns,” said Matt Brouillette, president & CEO of Commonwealth Partners Chamber of Entrepreneurs.
Marc Stier, executive director of the Harrisburg-based liberal-leaning Pennsylvania Policy Center, said, “The projected wage and benefit increases for state workers under the new collective bargaining agreements are reasonable, both to help state workers catch up with inflation and to reduce the public-private pay gap, which is necessary if we want a high-quality workforce. … Difficulties will arise in balancing the state budget at the end of the [labor agreements] but other factors besides wages and benefits are a much bigger source of the problem.”
House Republican Appropriations Committee Chairman Seth Grove, R-York County, said, “This sweetheart contract will add $3.2 billion in additional costs to our already growing structural deficit. It is outrageous Governor Shapiro is giving some of his top campaign donors a 22% raise over the next four years, not to mention the fact this contract was never vetted by the General Assembly who now needs to fund it.”
Senate Democratic Appropriations Committee Chairman Vincent Hughes, D-Philadelphia, sees it as a direct investment in the state’s economy.
“These workers in Pennsylvania will spend the lion’s share of these dollars in Pennsylvania and it is probably the best way to get local economic activity going,” he said. “Secondly, we already know [state government’s workforce with among the fewest workers per capita than most states] is stretched to the end and we need workers to do the work in Pennsylvania. The way to keep those workers or attract new ones is through salary and benefits. This helps in a dramatic way get that done.”
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