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Valley Perspective

Why Are Unions Running L.A.?

The cost of 'labor peace' is busting the city budget. The charter reform vote put a solution out of reach.

June 15, 1997|BRUCE L. BIALOSKY | Bruce L. Bialosky is a certified public accountant who lives in Studio City

June 3 was a red-banner day for public employee unions of the city of Los Angeles. They not only showed that they control Los Angeles city government but also made clear that they intend to keep control far into the future.

Long before results for the day's local elections were tallied, the City Council approved in executive session a hefty wage hike for about 20,000 city workers. The unions won an agreement for a 16% pay raise over the next four years, an average annual increase of 4%. This exceeds the current inflation rate, which has been running at 2% to 3% for several years with no signs of a change.

Councilwoman Jackie Goldberg stated, "It is an excellent package."

The question is for whom. Certainly not for the taxpayers of Los Angeles.

Normally wage increases are related to productivity gains. If wages increase without a commensurate increase in productivity, inflation occurs. Yet this contract has no requirement for increased productivity. The only concession by the unions was to help to decrease soaring workers' compensation costs over the four-year period. The plan lays out no specifics and has no consequence if the raging costs are not brought under control.

Why was there such an urgency to negotiate this package?

Goldberg said, "It buys us four years of labor peace." But it was not clear that we were aiming toward a period of labor strife.

If you create an agreement that is grossly in favor of employee unions, you can clearly say you bought four years of labor peace. But on the other hand, if the city is unable to meet its obligations and has to start cutting programs or staff, this agreement could be the impetus for real employee discontent.

No one has said where we will get the money to pay for the increases. Much as with the recently passed Living Wage Ordinance, the City Council made no provision for funding.

Likewise, when Mayor Richard Riordan this spring offered up his budget for the coming year, he indicated that his proposal was about $100 million short on revenues. To balance the budget, he suggested, among other things, that the city use $15 million in excess sewer charges that have been unfairly collected largely from San Fernando Valley residents.

To add the new wage measures to the financial problems the city already has is heresy.

And if you were to guess where the new monies might come from, it would become apparent: new taxes.

Since Los Angeles has tax rates that far exceed most of its neighbors, additional taxes would only continue to drive businesses and residents to other communities, thus increasing those communities' tax base, reducing ours and further straining our city budget.

With our high tax rates, it would seem that we already pay excessively for labor. This is evident in the fact that any time we want to make physical improvements to community assets, such as parks or libraries, a bond issue is proposed.

Salaries and related employee costs have so squeezed the operating budget of the city that there is no money left over for normal improvements. It is also why the maintenance schedule for our city streets has been stretched to six times the normal schedule for keeping them in good condition.

Any hope we had of changing this vise grip that the unions have on our elected officials was erased at the polls June 3. The election of a charter reform commission that has nearly a 75% union-controlled membership put the unions firmly in charge of our future.

Riordan had hoped to create a commission that would have the interests of the resident taxpayers at heart. The problem is, he forgot to get the voters to the polls who would elect his slate of candidates. The unions, however, saw the possibility of losing their control and succeeded in getting out their voters.

One would look for fairness from union-backed commissioners, but based on recent history, we have little hope for that. And any hope of meaningful change of the city charter has been completely dashed.

The residents of Los Angeles deserve a public work force that is fairly compensated and responsive to their needs. Our public employees deserve a fair wage. However, public employees should not receive salaries and benefits in excess of their private-industry counterparts. And public employees should be required to provide the same responsive and consumer-friendly services that we typically receive from the private sector.

It is apparent that this is not the case. And under current conditions, with the leadership now in place, this will not change in the near future.

We the taxpayers need to evaluate the path our leaders are currently taking so it does not continue to diminish our standard of living.

We may have labor peace for the next four years, but we will certainly not have peace and fairness for the rest of the community.

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