By Jim Cline and Kate Kremer
This is the second part of our 10 part Fall 2016 wage series. In this article we take a look at recent contract settlements and examine how those trends vary from recent previous years. Our view of 2015 and 2016 settlements and what we have so far from 2017 indicates that the Washington State public sector wages are a mirror of national wage stagnation. We see some wage increases with little substantial “real wage” growth (as measured once controlled for inflation). Whether a growing economy eventually will accelerate these is something we’ll discuss later in this series.
In this article we’ll provide you an overview and summary of settlements. But for the details of those settlements, you’ll want to explore our Premium Website . If you’re not currently a Premium Website subscriber you can review our services Cline and Casillas Premium Information Services and contact Karla Rava at Cline and Casillas and she’ll explain how you can become one: krava@clinelawfirm.com. For current premium subscribers below are links to some of the additional available Settlement Trend reports:
Statewide Settlement Trends 2015-2017
Both mean and median numbers are reported and each has their own significance. Median settlements may be a better indicator of the overall trend as the mean number is sometimes distorted by the occasional particularly high settlement or a large number of 0% settlements.
For 2015 we have most of the wage increases determined and with the Dispatchers and Records Clerks on the low end and Deputy Sheriffs doing slightly better we have the following numbers:
Notice that in 2015 the Police Officer and Deputy Sheriff 25 Year average figures are 2.6%. We will see this number slip back to closer to 2.25% in 2016 and then back up in 2017. The 2016 table below is also fairly complete with 77-91% of the labor contracts settled and we see the median wage settlements hovering at 2% with Corrections Officer’s slightly better at 2.4%. The average wage settlements are highest for Corrections officers and Records Clerks. Law Enforcement Officers were outpaced by their non-commissioned counterparts in 2016.
The following 2017 table is an indicator with 28-45% of the labor agreements settled. 2017 median settlements are hovering close to 2% for most groups and 2.5% for Sheriff’s Deputies and Police Officers. As suggested in our most recent CPI blog, 2017 average settlements are showing averages solidly into the 2%+ level.
These early settlements for 2017 show Firefighters on the low end of wage increases for the interest arbitration eligible groups who usually achieve slightly better settlements than non-interest arbitration eligible bargaining units. Firefighters work 24 or sometimes 12 hour shifts and substantially more than 2080 hours annually. For this reason Cline and Casillas provides Firefighter wages on a net hourly basis. Holiday and vacation leave hours are subtracted from annual hours and these are divided by the annual work hours for the net hourly wage. For this reason, if the work schedule and annual hours of work are modified the hourly wage is impacted. Firefighter wage settlements are lower than other interest arbitration groups in the 2015-2017 period.
One major impact on the settlement trend averages since 2009 has been the reduction from the previous high number of 0% wage increases that occurred during the “Great Recession.” The table below shows continued strong movement away from such settlements:
Often, in fact, a 0% is a reflection of a higher wage increase in a contiguous year rather than a true wage freeze as had been occurring in previous years.
The rate of 2% or higher wage increases is up and down, mirroring the slow growth economy. Generally the 2%+ settlement rate is higher or close to the same as it was in 2013.
So a majority of settlements exceed 2% but not an overwhelming majority.
But a real sign of a more robust contract negotiations climate is the number of wage increases at 3% or above. Fire fighters, Corrections Officers and Records Clerks all saw an increase in 3%+ settlements from 2015 to 2016. Some of the slowdown in 3%+ settlements in 2016 for the other positions may have been due to large wage increases in 2015 to catch up from several years of 0% increases.
In the next article in this series we’ll discuss current economic conditions that may affect your bargaining outlook.
