Labor relations observers say government unions can be innovators

Public sector labor negotiations can produce innovations in benefits plans and union-organizing campaigns, but combative attitudes and economic pressure remain obstacles, said a panel of professors and labor relations professionals on Monday.

"It's my belief, for better or worse, that public sector workers are becoming the face of the American unionized worker," said Stephan Fugate, chairman of the board of the Baltimore City Fire and Police Employees' Retirement System, at the Federal Mediation and Conciliation Service's National Labor-Management Conference in Washington. "Are public sector unions still an innovative force? We'd better be."

Adrienne Eaton, chairwoman of the labor studies and employment relations department at Rutgers University's School of Management and Labor Relations, said the relative stability and strength of public sector unions put them in a better bargaining position than their private sector counterparts.

"I think you need the urgency and the lack of an exit option. In manufacturing, there is the option, often, to exit," she said. "You can't, in fact, cooperate with a weak partner. Innovation is only possible in labor management relationships when both sides are strong."

Christian Weller, a senior fellow at the think tank Center for American Progress and associate professor of public policy at the University of Massachusetts (Boston), said besides their strength, government unions have produced more even income distribution than unionized private sector enterprises among members who hold different jobs within the bargaining unit. He said the size of public sector unions provides opportunities to develop innovative and intelligent benefits offerings that are out of reach of private sector businesses.

"Public sector employees have greater opportunities to take advantage of economies of scale. We don't assume public sector employees will go out of business," Weller said. "That allows public sector plans to take a much more long-term view in their investments [of pension funds] and become more stable investors."

Nancy Peace, a mediator and arbitrator based at the Center for Management Research in Wellesley, Mass., said she worried that intensely adversarial attitudes were a barrier to innovation.

"If you think you're at war, or you think that effective negotiation is a zero-sum game, I think that has a chilling effect on collective bargaining," she said. "It is often a counter to what I would see as creative and innovative bargaining. What do constituents view as robust representation? What does winning mean? How do you define that? That impacts your ability to be creative when you come to the table."

Peace said union elections and management turnover mean there is no guarantee that subsequent leaders would sustain any creative approaches to negotiating or devising employee benefit packages.

Robert Tobias, distinguished adjunct professor in residence at American University, said regardless of labor or management's intentions, the costs of past commitments now coming due would constrain public sector negotiation.

For example, a 2008 Pew Charitable Trusts report found that the costs of Philadelphia's pension fund and health care systems for city employees were outstripping the city's growth in revenue. In 2003, the Bush administration proposed making agencies shoulder the entire expense of their employees' retirements, shifting some of that cost burden from the Office of Personnel Management. As more baby boomers retire, the government will begin to feel the full brunt of those payments.

"They have huge legacy costs in the federal sector that will absorb a huge amount of GDP [gross domestic product] in the next few years," Tobias said.