Public workers struggle against private-sector comparisons

Groups say it’s unfair to judge jobs on same level

Rick Smith
Published: January 21 2013 | 2:15 pm - Updated: 28 March 2014 | 10:21 am in
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CEDAR RAPIDS — As state and national economies continue to struggle, more and more claims have been made in recent years that taxpayer-funded public employees are paid too much, pay too little for health insurance and have handsome pensions compared to many in the private sector.

There is no dispute, says Peter Fisher, research director at the Iowa Policy Project in Iowa City, that there has been a “campaign across the country” the last couple of years to portray public workers as overcompensated, a campaign which he says has been fueled by conservative businesses, individuals and think tanks.

“And I think it’s been pretty successful,” Fisher says.

What the law says

The Iowa Public Employment Relations Act states that Iowa’s public-sector employers and bargaining-unit employees “shall” compare the wages, hours and conditions of employment of their past contracts and the contracts of “other public employees doing comparable work” when public-sector employers and employees negotiate new contracts.

Since the mid-1970s, that language in the state law by and large has resulted in the exclusion of private-sector compensation comparisons during public-sector contract negotiations in Iowa.

Wayne Clymer, a construction inspector in the Cedar Rapids Public Works Department, is president of Local 620 of the American Federation of State, County and Municipal Employees, which represents about 390 city of Cedar Rapids employees.

 Clymer says it still doesn’t make sense today in Iowa to make compensation comparisons between public-sector and private-sector employers and employees because the job types in the two sectors don’t match up. Making those comparisons is difficult, too, because there is no easy access to the value of private-sector compensation packages, while those in the public sector are a matter of public record, Clymer says.

However, the longtime union leader — still a city employee at age 70 and missing half of two fingers from an on-the-job accident — concedes this: The city’s union employees would have liked the ability to use private-sector comparisons more 35 years ago than they would today.

“There was a time back then when we would have loved to compare ourselves to the private sector because we knew they were doing so much better than us,” Clymer says. “But I still think we’d do pretty good today.”

State’s approach

Here in Iowa, the administration of Gov. Terry Branstad hasn’t let the Iowa Public Employment Relations Act, which was created by the Iowa Legislature in 1974, stop it from examining how private-sector compensation compares to the compensation that the state of Iowa pays its employees.

In two studies completed in September and October 2012 for the state’s Department of Administrative Services, consulting firm Aon Hewitt compared the total compensation packages for Iowa state employees to those from select private-sector employers and other state employers and concluded that Iowa’s benefit package and total compensation package for employees are on average more lucrative for Iowa state employees than for other employees in the marketplace.

The study noted, for instance, that 88 percent of Iowa’s state employees pay nothing for their health care insurance, and the study went on to recommend that all state employees contribute 20 percent of the monthly premium cost of their health insurance.

Caleb Hunter, spokesman for the Iowa Department of Administrative Services, says the analysis in the Aon Hewitt studies is not prompting the agency to suggest changes to the Iowa Public Employment Relations Act that would invite private-sector comparisons in public-sector contract negotiations.

He says the agency commissioned the studies because it frequently gets questions about state employee compensation. Such studies, he adds, are common in the private sector.

Hunter said the studies’ results have been reflected in the state’s initial bargaining position with its three bargaining units. That position calls for no increase in wages and a demand that employees pay 20 percent of the cost of their health insurance premiums.

Last fall, the Iowa Policy Project in Iowa City was quick to call into question the results of the Aon Hewitt studies.

The Iowa Policy Project’s Fisher says his group’s research concluded that it was hard to compare public-sector and private-sector jobs, that fringe benefits for public-sector employees in Iowa were better on average than in the private sector, but public-sector wages based on the education and skills of public employees were lower to a greater degree.

“I’m not saying the whole idea (of public- and private-sector compensation comparisons) is wrong, It’s difficult to do in a comprehensive way,” Fisher says.

Conni Huber, the city of Cedar Rapids’ human resources director, and Karen Jennings, city of Iowa City’s personnel administrator, both say their cities take their direction from the state public bargaining law and so use only public-sector compensation comparisons as they negotiate with their bargaining units.

Huber says it is incorrect to say that Cedar Rapids City Hall is blind to the larger world outside of city government when it comes to employee compensation. She is out there competing all the time, she says, with private engineering firms and the likes of Rockwell Collins for engineers and other high-skilled people.

“In order to attract good people, I have to have a good package to attract them,” she says. The city’s package, she adds, is a total one, which at times might not compete on wages so it might need to be more attractive on benefits and pension.

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