By Kevin Manix,
Oregon, and America in general, have an obligation to look forward to the future when it comes to Collective Bargaining agreements which are limiting our ability to compete internationally and nationally. Let me explain:
One of the biggest “secrets” which sits right in front of us, but is unrecognized, is that Oregon’s governments have been driven to the edge financially because of one major clause in most collective bargaining agreements.
This clause is not required by any law but has quietly become a routine provision.
The clause requires that any reduction in pay be tied to a reduction in hours or days worked.
So, when teachers’ pay cuts are discussed due to revenue shortfalls, their union representatives respond by saying that the schools must shorten the school year to accommodate the pay cuts. Alternatively, they say that teachers are being asked to “work for free,” if there is a pay reduction without shortening the school year.
Similarly, state agencies have to talk about putting employees on furlough, if they want to reduce payroll costs. The only other alternative is to do layoffs.
So, when an agency or a school district faces a reduction in income, it cannot reduce what is usually the largest component of its budget — payroll — without reducing hours or days worked.
This is not the way a progressive private sector business enterprise would operate — at least in regard to ongoing higher paid employees. Instead, in tough times, employees would be asked to take temporary pay reductions but would still be asked to continue to work the same hours. Yes, some businesses offer unpaid furlough, but they usually do so in the context of reduced services for existing customers.
Government cannot change existing collective bargaining agreements without negotiating with the unions. After all, these are contracts. The government can re-think what clauses it includes in future bargaining agreements. In these negotiations, public officials should be fair and reasonable about providing pay and benefits. They should refuse to include clauses that only allow them to reduce pay, when revenues run short, by cutting hours or laying off workers.
Government might even consider a “flexible pay modification” clause which provides that pay can be increased by a certain amount at a given time, should revenues increase by a given amount. Alternatively, should revenues decrease by a defined amount, pay and benefits should decrease by a defined amount without reduction of hours.
We often make the mistake of saying government should be run like a business. In business, collective bargaining agreements can be modified under the leverage of a business having to close — and thereby terminate all employees — if the agreement is too extreme. Business operates on the profit motive.
Government does not operate on the profit motive and is obligated to maintain a certain level of service to its citizens. Our officials need to keep this in mind when negotiating collective bargaining agreements.
Kevin L. Mannix