As some states move to strip public employees of the right to negotiate contracts, the city of Los Angeles is reaching deals with its own unions to curb the impact of the budget crisis.
Labor leaders representing thousands of municipal workers agreed to increase contributions to retirement, saving the city $400 million and 600 jobs.
The deal, which union leaders finalized Thursday, reinforces the importance of unionism, said David Lewin, a professor at the UCLA Anderson School of Management.
Legislators have put unions at fault for spiraling costs in public retirement funds. Lewin, however, said union negotiation lowers costs and effectively deals with fiscal adversity ““ especially when both sides seek to benefit.
Lewin released research on March 21 comparing pay and retirement benefits for public and private sector employees.
The paper responds to legislation to eliminate the ability for unions to bargain contracts in states such as Wisconsin, New Hampshire, Ohio and Florida.
Lewin said unionism has little to do with the growing costs of retirement plans around the country.
He instead pointed to the sharp stock market decline from the recession as the leading factor.
Public officials advocating the measures are themselves covered by lucrative retirement programs, Lewin said.
The paper also shows that public employees are paid much less on average than their private-sector counterparts. Private sector employees are also shown to have higher benefits, particularly in the health care area.
In an interview with University of California student newspapers in early March, UC President Mark Yudof addressed the multimillion dollar gap in the UC’s retirement system.
He said the UC would be prepared to restructure its retirement benefits system in exchange for state support, which was proposed in a report by the California Legislative Analyst’s Office.
UC employees currently receive different benefits than state employees and K-12 teachers. The office proposed that the UC’s benefits align more with those of other state workers in exchange for renewed state funding.