Disappointing Results from State Union Contract Deals

So far, the Corbett administration has concluded new four-year contracts with Pennsylvania’s two largest state worker unions, which represent 55,000 government workers—and the taxpayers are the losers.  The deals with the American Federation of State, County and Municipal Employees (AFSCME) and the Service Employees International Union (SEIU) will end up costing taxpayers an extra $164 million annually (an increase to $2.9 billion by 2015).  The unionized government workers will largely avoid the pay freezes and rising health costs that Pennsylvanians across the private sector are facing.   

AFSCME workers, for example, are already generously compensated: the average employee in 2009-10 earned $39,464 in wages plus $22,986 in benefits for a total compensation of $62,450.  Although the contracts freeze pay for the first year, total pay raises over the life of the contract for a current employee will amount to 11.2 percent (not the 10.75 percent noted in a summary version of the agreement, which does not incorporate the compounding effect of one increase on top of another).

Even more disappointing: state workers will not have to bear healthcare costs the same way their private sector counterparts do.  The employee healthcare contribution is still calculated as a percentage of the worker’s pay, rather than as a percentage of healthcare costs. The employee contribution will remain at 3 percent of pay for the first three years before rising to 5 percent in the fourth year—and half that amount if workers enroll in the “Get Healthy” program.   For the average AFSCME employee, that is a contribution of $98.66 a month, compared to the $231 the average private-sector employee in Pennsylvania pays for a family plan. 

Nor does it appear that the governor made headway on ending dues deductions, and the state—at taxpayer expense—will continue to collect contributions to unions’ Polical Action Committees (PAC) for financing the elections of candidates.