Six Years Later and Still Fighting to Recover
by S. Randall Weltman, Esq.
September of this year will mark 6 years since the wholesale collapse of the U.S. economy. As big of a blow that the Great Recession was to the OPBA’s membership, it was never contemplated that it would take 6 years to recover from!
It did not help that during the long, slow battle back to normalcy other harmful shots were delivered to the core of the OPBA’s membership, public employees working for municipalities and counties. One was the state’s recent reduction and deletion of both its local government funds and the estate tax. These moves reduced and eliminated revenue that was vital to our employers at the exact time that their revenue was already diminishing from the recession.
Another blow was Senate Bill 5 and its implicit backlash against public employees. While Senate Bill 5 was beaten back it has left lingering effects, all negative in nature. One such negative is my belief that SERB and its neutrals have shifted their thinking and attitudes in a way that is conducive to our employers’ loss of those important revenue streams.
It is now apparent that the state’s annual grant of local government revenue and the funds derived from the estate tax served as our employers’ “margin” or their “house money”, the dough that they depended on getting every year in varying but large amounts. This was the money that our employers often used to fund wages and benefits, allowing us to slowly but steadily negotiate our pay packages to respectable, “middle-class” levels.
The elimination of these monies, spread out over the last few years, has allowed every one of the OPBA’s employers to truthfully declare that it has lost significant revenue. And unless that employer has the demographic composition that produces growing income tax revenue, that employer has had some powerful arguments in favor of “towing the line” on wages and benefits.
As you know, when we can not get an employer to offer a reasonable settlement on wages, benefits and healthcare the only recourse we have to get more is to use SERB’s fact-finding/conciliation process. Those are the proceedings before a professional neutral who will consider the facts and certain factors and then dictate the outcome of the parties’ negotiations.
You might recall that per the terms of Senate Bill 5, the fact-finding process was to be altered in favor of limiting the fact-finder’s so call “free reign” to impose a fair settlement. Conciliation, per the bill, was to be modified so drastically as to render it virtually ineffective and useless.
Senate Bill 5’s proponents complained loudly that the neutrals on SERB’s roster were beholden to the unions and not sensitive to the specific needs of the employers or their communities. They maintained that these neutral “outsiders” had too much power over local officials and the locality’s issues. Senate Bill 5 was designed to reverse what its supporters perceived as a biased process.
Even though Senate Bill 5 was repealed, SERB has apparently taken heed of its anti-public employee sentiment. In the last few years, SERB has clearly modified the fact-finding selection process so that we are offered neutrals that we are unfamiliar with and who are unfamiliar with our jurisdictions. More and more the “panels” of neutrals offered by SERB to the OPBA and its Cleveland area employers are from the Columbus, Cincinnati, and Toledo areas instead of from Northeast Ohio, as in the past. I suspect that our area’s neutrals are now being offered to downstate parties in an attempt by SERB to alleviate any claims of bias.
Furthermore, we have learned that SERB is now “training” its neutrals in a manner that is conducive to addressing other Senate Bill 5 elements. I do believe that SERB has urged its neutrals to more strongly consider “the public’s interest” when making their recommendations and rulings. And I am convinced that this has resulted in decisions far less favorable to us than those received even a few years ago.
Where does all of the foregoing put us, or leave us? Much like the world in which we live, the “have” cities and counties are now back to doing ok; restoring lost positions, granting raises and acting reasonable in regard to health care costs. Then there are the “have-not” jurisdictions which, because of the nature of their community, have not recovered because their income tax or sales tax have not grown sufficiently.
The have-nots really miss that “house money” and their miss results in substandard offers and below average settlements. When we challenge those offers in fact-finding and conciliation it is harder than ever to get a really good result. Ah, such is life 6 years after the outset of the financial crisis.
Meanwhile, I am not sure how good of a “go” these neutrals are having here in Ohio given the atmosphere and the persistent decline of union membership. Based on the simple law of “supply and demand” this period of time can not be favorable for a career as a neutral.
There really is no factor that can control or limit the “supply” of neutrals. Pretty much anyone can hang a shingle and vie for work as a neutral. While all neutrals have to meet certain standards to be on the SERB roster and even more standards to be on the American Arbitration Association (AAA”) or Federal Mediation and Conciliation Service (“FMCS”) rosters, and even more for entry into the National Academy of Arbitrators, all can and do ultimately compete for the same work. This makes for a lot of supply which ultimately means that they all work less frequently if not for less money unless, of course, the “demand” for their services outstrips their supply.
Unfortunately for the neutrals the demand for their services is declining and really shows no prospects for a pick-up. Some of the slack in demand for neutrals is attributable to the slow but steady drop in union membership during the last several years. Fewer union members translates into fewer collective bargaining agreements meaning fewer grievance procedures and fewer grievances to arbitrate, or disputes to mediate or otherwise resolve.
I believe that even within the existing union/management situations there are less grievances that are ultimately arbitrated. No doubt that the economy has forced some employers to be more conciliatory now that their budgets for outside counsel and other legal costs have been cut. Or, maybe we can say that the parties are familiar enough with each other and the reality of each situation so as to permit them to more readily settle matters. Either way, being a financially successful, full-time neutral these days must be quite a challenge.