by: Jeff Perry

The economic news we are hearing every day has been much better than what we were hearing during 2009, but not nearly so good as 2011. The economy is still growing in the USA, but not quite as fast as predicted.  Unfortunately, the predictions were already anything but quick.

There are many who fear the economy is heading into another recession due to the economy slowing down worldwide and the dept crisis in Europe. Hopefully, that is not going to be the case.  If that prediction comes true, we will all be in for a rough time.

The various branches of the government are generally improving economically.  While there are few jurisdictions that are hiring yet, the number of layoffs has decreased markedly, and revenue has returned to the general vicinity of pre-recession numbers.

The State Employment Relations Board (SERB) has released the wage settlement report for 2011.  The economic mess really hit around the last quarter of 2009.  The negative impact from recession hit the public sector twelve to eighteen months after.  The impact to wage increases is plain to see.  This is by far the worst average wage increases ever recorded by the SERB.

The State wide average increase is wages for 2012 was 0.57%.  In 2006 it was 3.01%.  The average wage increase has decreased every year since then.  The range over the ten years of the survey was 0.57% in 2011 up to 3.59% in 2002.  This is a trend that must end!

The Cincinnati region had the largest decrease in wage rate increase from the following year of 0.71%, down to 0.49%.  The lowest regional increase award goes to Cincinnati as well.  Bad year for the south west section of Ohio!

Only one of the regions saw their rate of wage increase go up from the last wage survey, Southeast Ohio.  Their wage rate went up 1.38% from 1.23% last year.  That was the highest increase in wage rates as well.  The Columbus Area has the distinction of having the second largest increase in wage rates from 2011 to 2012.  Their average increase went up 1.12%.  These were the only two regions that had wage increases averaging over one percent!

Townships were the jurisdiction that had the highest increase in rate of wage increase over 2011.  They had the highest percent for the third year in a row.  They were the only jurisdiction to get over a one percent wage increase as well.  However, they had the largest decrease in wage increase from 2011 to 2012 as well, going from 1.99% to 1.25%.  School Districts came in last with a meager 0.35% increase.

Police did have a smaller decrease in the percent of wage increases compared to the other unit types.  However, the Fire did much better than police once again, with 0.27 percent more.  Fire did much better than any other unit type for the last four years, and seven out of the last ten years.  The teachers found themselves on the bottom of the pack again.  They increased their percent wage increase by an average of 0.36%.  That meager wage increase resulted from the largest decrease from last year, of 0.62%.

The first year of most contracts usually had the smallest wage increase of the contract last year.  The last year of the contracts had the largest.  This is referred to as back loading a contract.  Unions usually prefer to get the most we can as soon as we can, since it maximizes the amount of money earned over the life of a contract.  

News of the State budget looks pretty good so far.  However, that doesn’t mean the Governor has any plans to return any money to the local government funds.  He still wants to squeeze the Cities so he can spend the tax money as he sees fit.  Hopefully, things will change in Columbus come November.

By: Joseph D. Rice

By the time you read this, the 2011 elections will be history but the dust still may be settling.

At this writing - 13 days before the election - it appears certain that Issue 2 will be defeated. The most recent poll gave opponents a lead of 25% and that would seem to be insurmountable.

The only group of voters supporting Issue 2, which would retain Senate Bill 5, are Republicans and 30% of them oppose it. But most Democrats and Independents, men and women, oppose it.

Build a Better Ohio, the pro-business group fronting for Issue 2, was closing the gap until they stole the video of a Cincinnati grandmother whose granddaughter was rescued from a burning home by a Cincinnati firefighters. In the anti-Issue 2 ad sponsored by We Are Ohio, grandmother came out against Issue 2. Build a Better Ohio twisted the footage so that appeared she was for Issue 2. I’ve seen a lot of dumb political moves but this one may have been the dumbest.

So what happens if is Issue 2 is defeated?

The Republicans who control the General Assembly may revisit some portions of the SB 5 language. But if the Issue 2 vote is lopsided against it, I don’t think the GOP leadership will have the stomach for another fight with labor, especially with the 2012 legislative elections on the horizon.

State Senator Shannon Jones, whom sponsored Issue 2, will have been discredited and probably eliminated as a contender to succeed Senate president Tom Niehaus in 2013. She wanted to become president and to use SB 5 as a vehicle to accomplish it.

State Senator Keith Faber, her prime opponent, also is a fan of Issue 2. He also could be eliminated by a big Issue 2 loss.

Senate Bill 5 demonstrated how far out of touch the Senate GOP leadership is with the people of Ohio. That’s what happens when people from southwest Ohio call the shots. The same can be said for Kevin DeWine, the state GOP chairman, who is from Dayton.

Governor John Kasich, who embraced SB 5, was to a great extent the issue in the Issue 2 campaign. With a 36% approval and 52% disapproval rating, an Issue 2 defeat will make Kasich toast and his dreams of the White House just dreams.

House Speaker William Batchelder wanted to exclude the safety forces from SB 5. Kasich, Niehaus and Jones refused. Now, Kasich is said to regret that decision and it appears doubtful that any future legislation will be targeting the safety forces.

I anticipate any future legislation may address pension pickups, where a city pays part of the employee’s pension contribution. This usually is a trade off for a lower wage settlement.

Of the 376 police departments and sheriff’s offices we looked at, 53 have some form of pension pickup but only 22 have full pension pickups. The OPBA has six bargaining units with partial pension pickup and 11 with full pension pickup.

We don’t know yet what the changes might be. They probably will be addressed in a pension bill as opposed to collective bargaining legislation.

The key thing for the safety unions will be retaining binding arbitration and the right to negotiate staffing levels and transfers, promotions, hiring and firing, and other conditions of employment.

Other issues a pension bill might address are the retirement age (48 for police and deputy sheriffs), the DROP program and how it is structured to encourage participation, and how a pension is calculated, based on the number of years at top salary.

The legislature had been scheduled to deal with a pension bill last year. They ducked because it was election year. They want to do the same thing next year and wait until 2013.

What has come out of the campaign against SB 5 is a bonding between the safety forces, teachers, and other public sector employees. The Republicans may have lost forever the votes of these groups because of SB 5. They overreached and the public rebelled.

The funding issues confronting local governments will remain because Kasich cut local government funding, leaving local governments three options to save money: gut civil service rules, junk existing contracts, or layoffs. SB 5 never was as much about saving money as it was about destroying unions.

By: Joseph D. Rice

The stage is set for the biggest battle for organized labor in Ohio since right to work was on the ballot in 1958.

The right to work issue resulted in a Democratic sweep in that year’s state elections. If Senate Bill 5 is repealed November 8, it will have serious implications for Governor John Kasich, the other Republican state office holders and the Republican majorities in the Ohio House and Senate.

We Are Ohio, the coalition of labor unions spearheading the repeal effort, collected 1,298,301 signatures on referendum petitions. Secretary of State John Husted certified 915,456 valid signatures, almost four times the number needed to qualify for the ballot. The signature count was a record.

The next step is for the Ohio Ballot Board, made up of Husted and four other persons, to give the issue a number and to approve the ballot language. It is expected that the repeal vote will require a “no” vote.

Despite public bravado from SB 5 supporters, the number of signatures submitted and verified stunned some top Republicans. The 915,456 valid signers represent a formidable block of voters and one would expect them to vote to repeal SB 5.

A July Quinnipac poll had SB 5 being repealed by a margin of 56-32%. After the undecided is factored in, that amounts to a 63% vote to repeal SB 5.

While he didn’t sponsor it but strongly encouraged its passage, this election will, to a large extent, be a referendum on Kasich. His approval rating is at 35%, unemployment just increased, and many Ohioans do not like his policies or his style of government. Kasich believed he had a mandate when he defeated Ted Strickland in 2010. How wrong he was. Voters were unhappy with Strickland and wanted a change. They did not bargain for what they got in Kasich.

The OPBA and other safety force unions have been in the forefront of the SB 5 repeal. Our members collected signatures, mobilized for rallies at the State House, and now are preparing for the general election campaign.

While election strategy will be developed by a number of consultants, the election will be won or lost by OPBA members and the other unionists whose livelihood is threatened by SB 5.

Our members are the best selling point to repeal SB 5. They do their jobs every day, often under difficult and dangerous conditions. If we just keep doing our job of serving and protecting the public, we will win and our enemies will know that in November 2012 there will be a day of reckoning for the politicians who want to destroy public sector unions.

The SERB Wage Increase Breakdown

by: Jeff Perry

The economic news we are hearing as of late has been much better than what we were hearing during 2009.  However, the various branches of the government tend to lag behind the private sector in general.  The lag in revenue tends to vary between ten to twenty (10 – 20) months.  

The State Employment Relations Board (SERB) has released the annual wage settlement report for 2010.  Keep in mind the economic mess really hit the bottom in the private sector around the last quarter of the year in 2009.  If we were looking back to that date, the news was bleak as many feared the recession would probably get even worse.  Of course, it didn’t.  Unfortunately, it hasn’t gotten much better outside of the corporations and the ultra rich.

The State wide average increase in wages for 2010 was 1.26%.  It has been steadily declining since 2006 when it was at 3.01%.  In 2007 it was 2.98%.  Over the ten years of the survey, the highest average wage increase was in 2001, when it was up to 3.78%.  Obviously, the present average is the lowest ever since the state first started keeping track.  I certainly hope it doesn’t get any lower.

The Akron/Canton region had the largest decrease in wage rate from the following year of 1.24%.  That is a large difference and brings the region in with the second lowest wage increase overall.   The Warren/Youngstown region not only has the lowest wage decrease of all of the regions, but the smallest decrease from the prior year with a difference of 0.38%.  This is the fourth year in a row that the Warren/Youngstown region has come in with the lowest wage increase.  Ironically, in 2001, the year of the highest average wage increase across the state, Warren/Youngstown had the highest average wage increase of any region.

The Columbus Area has the distinction of having the largest increase in wage rates in 2010.  They came in at 1.51%.  Cleveland came in next at 1.34%, and Dayton and Southeast Ohio tied at 1.23%.  That rounds up the best of the bad.

Townships were the jurisdiction with the highest wage increase last year.  Their 1.99% was way above the City’s 1.39%.  School Districts did not come in last for the first time in five years with 1.07% compared with .94% for Counties.

Police lost a larger percentage than any other unit type compared to 2009.   The 1.39% average is a whopping 1.07% less than the 2.46% average in 2009.  Fire did much better.  They averaged 1.74% compared to 2.74% for 2009.  They had the largest average wage increase again this year.  The teachers found themselves on the bottom of the pack again in 2010.  This marks the seventh year in a row that teachers have had the lowest average wage increase.  It seems all those failed levies are having a large impact.

The first year of most contracts usually had the largest wage increase of the contract.  At least the first year of a contract was the largest until 2009 and 2010.  Referred to as front loaded, Unions usually prefer to get the most we can as soon as we can, since it maximizes the amount of money earned over the life of a contract.  With the economy being hit with a recession and slow recovery, the pattern seems to be shifting to back loaded.  The good news is the average goes from 1.04% in the first year of a contract to 2.12% in the third year of an average contract.  Looks like things are expected to improve.

News from the State does look pretty bad right now.  Since the economic downturn, there has been a fairly steady decline in wage increases that could continue for quite a while.  On the national level there are renewed fears of a double dip recession at worst or a slow recovery at best.  I don’t think that next year will bring about any large wage increases.  

I was speaking to several Fact-finders at a seminar recently.  One of them complained to me that they had to recommend decreasing wages while increasing the amount of money the employees had to pay towards the health insurance.  From my prior experiences with him, he had always been pretty generous with employees.  It seems he made the right choice, since the employees accepted the recommendation.