Evanston aldermen Monday are scheduled to approve new four-year contracts with two of the city’s four employee unions.
The American Federation of State, County and Municipal Employees and the police sergeants unit of the Fraternal Order of Poilice have agreed to contracts that call for no wage increase this year and increases of 1.5 percent, 2.5 percent and 3 percent over the next three years.
Under the agreement employee pay rates at the end of the four years will be roughly equivalent to what they would be if they had received a 1.75 percent annual increase over the four years, while the amount the workers will actually receive in pay over the four years would be equivalent to getting 1.25 percent annual increases.
AFSCME is the largest of the city unions. The police sergeants group is the smallest. The city has yet to reach agreement with the firefighters and police officers unions.
In a memo to aldermen, Assistant City Manager Erika Storlie says providing no salary increase in the first year of the agreement “will give the city the ability to significantly reduce and anticipate salary expenses to improve its financial situation.”
And she says the long contract term will provide security and stability to both the city and its employees and let the city reasonably budget for salary expenses.
To ease the pain of the modest pay hikes, AFSCME workers will get three additional floating holidays in each of the first two years of the agreement, two days in the third year and one day in the fourth year.
Assuming a 50-week work year and a 40-hour work week, gaining three floating holidays would be equivalent to a 1.2 percent pay hike for the remaining hours worked.
The police sergeants will get a somewhat similar increase in time off, although for them it’s structured as comp time rather than floating holidays.
The contract will also increase employee contributions to insurance premiums, but not until 2021. The employee share will increase then from 10 percent to 15 percent for the PPO plan and from 10 percent to 12 percent for the HMO plan.
Achieving a zero percent wage increase for city workers this year was one of the goals set to balance the the city’s 2019 budget.
Labor contract questions & considerations
Does the ZERO percent raise for this year apply just to base salary increase?
Or does this mean that there aren’t any step or track increases also?
One important consideration for public sector contracts is that there are many “wage escalators” built into their contracts.
Over the last decade public sector wages have increased at a steady and consistent 3-4% rate compounded, and that’s before the cost of benefits and the guaranteed pension. However, in the private sector, median household income has increased at only about 1% during a similar time period. And the benefit package is generally less in the public sector especially when you compare the Defined Benefit Pension vs a 401k.
The work our public employees do in the City of Evanston is critically important and appreciated, but the Total Cost of their entire Compensation package is not well understood.