Fiscal Woes Inflame Tensions Between Dems, Unions

Financial crises decades in the making have disrupted the old ways in which Democratic politicians and unions got along

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    NEWSLETTERS

    TK
    ASSOCIATED PRESS
    March, 2013: Unionized employees of the city of Philadelphia, who've been working without a contract since 2009, have been aggressively protesting Mayor Michael Nutter's attempts to force concessions.

    The increasingly vitriolic showdown between Philadelphia Mayor Michael Nutter and his unionized employees can seem at times like a City Hall sideshow, pitting a hardball politician against boisterous workers who call him "Mayor Bozo."

    The dispute hit a low point last week, when hundreds of workers, who've gone four years without contracts, crashed Nutter's annual budget address, shouting and blowing whistles until the mayor had to be escorted from the city council's chambers.

    But the bizarre outburst is rooted in a much wider set of circumstances that has Democratic mayors and governors across the country feeling intense pressure to cut government spending, much of it on the backs of organized labor, historically Democratic supporters who see themselves as a bulwark of middle-class survival.

    There has always been a certain amount of tension between the mayors and unions, but they generally got along by agreeing on benefit packages that had relatively small short-term budget impacts, said Joseph McLaughlin, director of the Center on Regional Politics at Temple University. But that strategy no longer seems viable. Prompted by the Great Recession, many cities and states have found that years of skimping on pension payments, along with a steady rise in the costs of retirees' benefits, have pushed them to the brink of insolvency.

    "We still would have had the problem without (the recession), but that magnified the pressures dramatically," McLaughlin said. "It was like a detonator, even among the Democrats who normally support labor. The problems are hard to hide from anymore."

    The situation is particularly acute in Philadelphia, which had one of the worst records of funding municipal pensions during the recession and now has more retirees than active workers.

    Nutter, first elected in 2008 and re-elected last year, has gone to court in an attempt to force the unions to accept deep concessions on pensions, overtime and raises.

    It is considered very rare for public unions to go so long without contracts—the only other major city whose workers have gone longer is New York, according to North Carolina State University labor scholar Richard Kearney. But in New York, state law allows unions to keep working under the terms of expired contracts.

    Ross Eisenbrey, vice president of the Economic Policy Institute in Washington D.C., said Nutter appears to be taking a hard line stance similar to that of Mayor Rahm Emanuel of Chicago, whose tussle with his city's teacher's union resulted in a strike last year.

    Emanuel, Eisenbray said, is among a breed of new Democratic leaders who aren't as beholden to unions as their predecessors were; instead, they're more beholden to wealthy contributors who are more likely to want tax cuts.

    Workers, meanwhile, are feeling increasingly marginalized. Despite the recession, the nation's income has continued to grow, but a larger portion of it goes to the wealthy, Eisenbray said.

    "Part of what's going on is that everyone, all blue collar workers and even white collar college-educated workers, have seen their wages stagnate or fall in the past 10 or 12 years," Eisenbray said. "They've lost their retiree health benefits, their employer-covered health care, their pensions have been virtually wiped out. There has been this huge erosion across the board in the compensation of the American middle- and working-class, and the public employees have held out longest. They had a good relationship with the politicians they bargained with. But now they're under attack."

    That helps explain confrontations like the one that is escalating in Philadelphia.

    Kearney, the North Carolina State University professor, said that a particularly remarkable aspect of that fight was that the public workers have been joined in support by unions representing private-sector workers. That is an indication that organized labor sees this as a watershed battle, Kearney said.

    "This is another chapter in the same story," Kearney said — one that will likely get worse before it gets better.