Hard-pressed cities putting squeeze on their employees

Dollar troubles are forcing a growing number of major US cities to ask from concessions from their own employees to stay solvent. Alternatives run the gamut from outright layoffs to a freeze or rollback in wages or fringe benefits.

But getting employee's cooperation is no easy task.

Many of the cities in the worst financial squeeze have the strongest public-employee unions. Often their support helped put the mayor in office. Used to having these pleas from management often capped by generous settlements in an effort to keep labor peace, many union leaders and members are not convinced that their city's current tale of woe is genuine. They say they have heard the same financial "sob" stories and layoff threats before.

"Some cities have been crying wolf about their finances for years," confirms Charles C. Killingsworth, Michigan State University professor of labor and industrial relations and a frequent arbitrator in labor disputes. "Now that the wolf is really here, it's not going to be a simple matter for them to establish the credibility of the present financial threat. . . . The question of a city's ability to pay has always been very slippery because the question always in the background is, 'What are the real limits on a city's taxing powers?'"

Detroit Mayor Coleman Young's current bid to unionized city workers to accept a two- or three-year wage freeze is viewed as a key test of government's ability to convince public-employee unions that the line on pay increases must be held.

The freeze, a compromise from a 5-to-7 percent cut in wages earlier proposed, is part of a three-part plan designed to rescue the city from the brink of bankruptcy. City voters approved a 1 percent hike in local income taxes last month, but the Michigan Legislature will not allow that to take effect unless Mayor Young also can arrange by Aug. 15 to sell $125 million worth of medium-term city bonds and persuade local unions to do without cost-of-living hikes.

City police already have agreed to a two- year wage freeze in exchange for a promise of no layoffs and a retirement sweetener. Now local firefighters, who have long favored parity with police in wages and benefits, are, as mayoral aid Joyce Garrett puts it, "under the hammer" to accept the same terms. The recently negotiated contract governing most other unionized city workers calls for a freeze but has not yet been ratified.

Although Detroit's request to its unions is unusual, it is not without precedent, and it may not remain ratify for long. The Metropolitan Transit Authority in New York City, for instance, has warned its unionized workers that it will hold back $24 million in scheduled cost-of-living increases next fall unless workers can raise the funds by increasing productivity, as their contract specifies.

"City budgets are highly labor intensive, and I think Detroit is just on the front end of the crunch that's coming," says US Conference of Mayors spokesman Gene Russell.

It is clear that as that "crunch" approaches, public employee unions will press hard for job security -- whatever the price.

Agreements by both Detroit police and Michigan State Police to wage freezes in exchange for no layoffs, and recent Philadelphia transit worker acceptance of a smaller pay increase in exchange for the same promise, are viewed as cases in point.

"When push comes to shove, the unions will generally try to preserve as many jobs as they can, giving first on fringes and then on wages," says Melvin Reder, professor of urban and labor economics with the University of Chicago's Graduate School of Business.

Still, few public-employee contracts actually bar layoffs. In current contracts, unions concentrate more on stipulating the order of dismissal. they also will be trying hard in the present crunch to persuade cities that the cuts could more wisely be made in other areas or dollars could be raised in other ways.

"We try to show by budget analyses either that the cuts aren't necessary or that there are other places to take them -- maybe this isn't the year, for instance, for 47 new police cars," says Linda Lampkin, director of research for the American Federation of State, county, and Municipal Employees. "The major battle ahead isn't going to be fought on contractual lines but on budget lines."

Labor-relations experts say that city leaders are apt to guard management prerogatives much more carefully than in the past. Many public-employee unions have won major victories in dictating grounds for promotion and staffing requirements such as how many men must accompany each fire or sanitation truck or how many pupils per teacher.

"The bargaining is going to be extremely hard over the next few years," predicts Roger Dahl of the US Conference of Mayors' Office of Labor Relations. "We're going to be asking for 'givebacks' in terms of management prerogatives such as work rules and practices that may have been given away in the past. And we're going to have to focus much more in local government on getting improved productivity."

Seattle three years ago took an important step forward in the latter category when it became the first major city to negotiate an agreement allowing for a substantial number of part-time bus drivers. The city's transit authority stopped hiring full-time operators, stepping up overtime help instead, well before negotiating began.

Technically, public-employee strikes are illegal in all but eight states. And some union leaders have said that strikes will accomplish little in cities where new revenue possibilities are slim. Still, in each of the last two years there have been well over 500 public-employee strikes, and many city leaders are clearly worried that their current dearth of dollars could leave them in a more vulnerable position than ever.

"Cities just aren't going to have the monetary resources anymore to sweeten the kitty and buy settlements," cautions Susan Pavlou, director of person nel for the City of Seattle.