By: Jim Cline and Kate Kremer
Pushed down by the COVID Recession, the important June to June CPI number showed a dramatic, though expected, drop. We say “important” because many Washington public safety labor contracts are tied, directly or indirectly, to the June CPI numbers. As indicated in the recently released Guidebook on “Negotiation in Turbulent Times”, regardless of the CPI, we anticipate challenging bargaining in 2020 and into 2021. We are expecting most employers will at least start with 0% as their base wage proposal, and we’ve already seen one proposal for a -3%.
So, while the CPI matters are relevant, the local fiscal and economic conditions are likely to be more impactful. In our next newsletter article, we discuss the latest statewide sales tax data and how that impacts fiscal conditions.
This chart shows the month to month changes in the Seattle and All Cities “W” index from June 2019 to June 2020:
As you see the Seattle and All-City numbers hit a peak of 2.6% and 2.3% in February and have slide dramatically since. In fact, the June All-Cities 0.5% number is a bounce back from its lower of 0.1% in April.
Not all contracts are tied to the Seattle or All Cities Index. Some use a “U” version of the Index, and some are tied to the various “West Coast” indices. Here’s a chart showing those numbers:
For more CPI data, current and historic, visit our Premium Website CPI page. In an upcoming Newsletter Article, we’ll discuss how we anticipate evolving economic conditions to impact negotiations. That discussion will include the dramatic downturn in location government revenues, a subject that we turn to next.
