Brace yourself: the largest number of L.A.-area union contracts in at least 30 years is going to be renegotiated this year, covering over 300,000 workers in L.A. County.
Not only are the numbers unprecedented, so are the demands from the unions. With a booming economy and more political attention being paid to the gap between rich and poor, unions want a bigger piece of the pie.
“The theme is simple: Workers deserve their fair share of the tremendous wealth that’s being generated in today’s economy,” said Miguel Contreras, executive secretary and treasurer of the L.A. County Federation of Labor and the top labor official in the area.
With so much at stake, the contract talks could have impacts far beyond the specific unions and employers in question:
-They could spark protests this summer when the city steps into the national spotlight as host of the Democratic National Convention. Problems could damage the city’s image and even lead to a drop in tourism.
-In the public sector, granting hefty raises could imperil already slim government budgets.
-In the private sector, a sudden jump in wages could contribute to increased inflation at a time when many fear the economy is due for a slowdown.
“Inflation is the real concern here,” said Esmael Adibi, executive director of the A. Gary Anderson Center for Economic Research at Chapman University in Orange. “Profit margins of companies will be squeezed if they have to pay higher wages. And that means they may have to pass on the costs in the form of higher prices to keep the same margin rate.”
Adibi expects the talks to produce average annual wage increases of between 4 percent and 5 percent for the unions, half of the increase due to inflation and half due to recent productivity gains.
It’s no coincidence that so many contracts expire this year. Unions typically negotiate contracts to expire in election years so candidates can exert pressure on public-sector contracts. That’s especially true this year when Democrats will converge on L.A. for the national convention.
“Unions can use the strong economy to wring more concessions from management,” said Steve Atkinson, managing partner of employment law firm Atkinson, Andelson, Loya, Ruud and Romo in Cerritos.
The dozens of union contracts up for negotiation involve everyone from police officers and bus drivers to radio and television actors and painters. They are being led by the so-called “big three” in the public sector 72,000 home health care workers, 45,000 county employees, and 42,000 L.A. Unified School District teachers.
“This is a huge number of contracts, covering more than one-third of all the unionized workforce in the county,” said Kent Wong, executive director of the UCLA Center for Labor Research and Education. “It’s the largest number in recent memory.”
‘Barely pay the rent’
In the public sector, unions are looking to get back the raises and benefits they conceded during the lean budget years of the mid-1990s.
Or, as county clerical worker Brenda Williams Turner put it: “For so long, we were just worried about keeping our jobs, so we didn’t push for big raises. Now, the county has a surplus and people like me can barely pay the rent.”
Officials with Los Angeles County, which is negotiating contracts involving more than 100,000 of its workers, refused to discuss details about the talks or the fiscal impact of raises.
“The county Board of Supervisors, in establishing parameters, is intending to give fair salary increases. But the increases must also be affordable,” said Sandra Davis, chief deputy administrative officer for L.A. County. “Even though the county’s fiscal position is better than at any time in the last decade, we’re not sitting on a huge surplus. And we still have a structural deficit in our health department. We have a lot of one-time-only funds that we should not use for ongoing salary increases.”
Atkinson said the county’s situation may have improved from the crisis of a few years ago, but that money is still tight.
“The problem is that some of these contracts are driven by political realities, not economic realities,” he said. “In other words, public officials may promise to pay the unions 5 percent more each year, when the budget indicates the entity is operating at a loss.”
Recovering tarnished image
That political pressure is sure to mount this year. L.A. is shaping up to be a key battleground in the presidential campaign, and Vice President Al Gore, the probable Democratic nominee, has broad union support.
Also, with 15,000 members of the media here for the Democratic National Convention in August, unions still in negotiations may try to grab the spotlight with protests, much the same way that protestors snagged the headlines at last fall’s World Trade Organization talks in Seattle.
And that, local political observers and economists say, could be the biggest risk to the L.A. area from this year’s union activity.
“Strategically, a union could position itself to impact tourism by holding demonstrations during the convention,” said Joseph Maggadino, economics department chair at Cal State Long Beach. “These events converge at a crucial time, when we have just recovered our tarnished image from the (1992) riots. We don’t need additional major disruptions at the time of the convention.”
The unions realize this and have every intention of using the convention as a hammer, especially in trying to push through settlements with public-sector employers.
“Clearly, L.A. is going to be showcased during the convention,” said Contreras. “We are encouraging labor and management teams to get to the bargaining table early, so that it’s not necessary to take to the streets with rallies in midsummer, when the eyes of the world are on L.A.”
Indeed, the unions are already holding rallies with an eye toward the convention. A demonstration staged this month by Service Employees International Union Local 660, which represents a variety of county employees, was held at the Staples Center, the site of the August confab.
(The Staples Center itself is the scene of one labor dispute: About 600 members of Hotel Employees and Restaurant Employees Local 11 are pushing for higher wages and benefits from Ogden Entertainment, which holds a concessions contract at the arena.)
Unfazed by convention
Public-sector officials downplay the importance of the convention as a factor in the negotiations.
“We are following our standard process of negotiations and hopefully we can come to agreements prior to contract expirations,” said Davis. “But we are not going to let the coming convention dictate the process of negotiations.”
All the county’s 50 bargaining units have contracts that either just expired or will do so later this year; the largest of those is SEIU 660, which represents about 45,000 county workers.
Two other public-sector contract talks are likely to dominate headlines, thanks to scandals in their respective agencies. The contracts for more than 42,000 L.A. Unified School District teachers and 15,000 other LAUSD employees expire on June 30, as does the contract for 9,500 Los Angeles Police Department officers.
In the case of the police officers, the widening LAPD corruption scandal could prove bad timing, especially if public support for LAPD officers dips.
Several high-profile private-sector agreements are up, too. Chief among those are some 20,000 to 25,000 television and radio commercial actors, whose contract expires on March 31. Along with better pay and benefits, a key issue is residuals, or the money that is owed actors from repeat broadcasts of commercials.
Then there are the building trades, where a slate of contracts expire on June 30. The largest involves 20,000 to 25,000 laborers in L.A. County and an estimated 25,000 painters in L.A. and Orange counties.
Unlike the public sector, where local services could be impacted, if contract talks falter here, it could pose a significant threat to the local economy.
“If the laborers or painters go on strike, it could slow down construction, which could cause projects to be postponed,” said Jack Kyser, chief economist for the L.A. Economic Development Corp.
