Jim Cline and Kate Kremer
This article continues our series on recent developments influencing contract negotiations. One of the most important influences on contract negotiations (and arbitration) is contract settlements, especially among comparable jurisdictions. There have been some unusual patterns that have developed in Washington public safety labor negotiations, and these seem to be highly influenced by external economic events.
In this article we’re going to explore those patterns with an emphasis on the connection between economic events and contract settlements. We’re going to focus on a single public safety classification in this article to demonstrate these impacts — city police officers. But we are seeing similar patterns in other public safety classifications. (In the near future we’ll be releasing our statewide survey of all public safety classifications.)
Here is a chart that shows the city police settlement trends in recent years:
We collected contracts from 131 cities across Washington state and compiled the wage settlements in those contracts into the graph above. This graph shows the average wage settlement for a 25-Year Police Officer with a BA degree from 2020 to 2024. Because these numbers reflect the year-to-year increase for an officer with years of service and a degree, these numbers also include increases that are the result of additions to or increases in longevity and education premiums. The 5-year Police Officer wage increase is usually slightly less.
These numbers show a substantial increase in 2022 as the inflation figures rise. The 2023 and 2024 numbers are lower for several reasons. One of them is simply that we don’t have that many reported settlements, particularly for 2024. This is reflected in the chart below:
There’s been a lag in wage settlements over the last couple of years as parties wait until they know inflation and other economic numbers. Some are settling one-year contracts for 2022 on account of the future uncertainty.
As discussed later in this article, some of the lag in 2024 has to do with the increasing use of CPI formulas. Notably, the CPI indexes that the 2024 formulas rely upon will not be known until 2023. While we know the formula, the wage increase also requires us to know the CPI index number for a particular year. Since we don’t know the CPI number yet, we can’t plug that number into the formula to determine the wage increase – and as a result we can’t include those numbers in our averages.
The remainder of unsettled contracts will be settled during the current period of high inflation. For this reason, we’re predicting that the settlement averages will be higher when the contracts are all settled, barring some catastrophic economic event in the next few months.
