Pittsburgh Loses Again

Member Group : Allegheny Institute

Pittsburgh has lost again, although this time it was not a sports contest. The City lost an arbitration award to the labor union representing Public Works employees. The grievance was over the awarding of overtime during the G-20 Summit held in the City in September 2009. As a result, the City must pay a total of $50,000 to 62 laborers.

That the City lost is not a surprise. Pittsburgh’s Public Works Director noted that he could not recall the last time the City won an arbitration case. A union representative is sure that the City has won one, but was unable to name a specific case or how long ago it occurred.

And that in a nut shell is the problem with the City of Pittsburgh: it is being, and has been for many years, dominated by its unions. Whether in arbitration disputes or at the negotiating table, the City cannot win in confrontations with unions. The real problem is that the ultimate losers are the taxpayers who are forced to pay far more than they would absent this egregious imbalance of power between employer and employees. They are also forced to watch the City be embarrassed as workers are returned to jobs after serious dereliction of duties or conduct that should have resulted in conclusive termination.

Ironically, one of the seeds of this problem was planted in 1974, when the City adopted its Home Rule Charter. Article seven, section two of the Home Rule Charter states that "(a)n independent appeals board is established to hear employee appeals to the decisions of major administrative unit heads and other officers and officials."

That’s exactly what had occurred in this situation. Members of the union accused assistant director of Public Works of disregarding seniority rules when selecting workers to work overtime during the G-20 Summit. The arbitrator agreed with the union’s accusation that the City was playing favorites and did not select union members according to the rules of an agreement the City had with workers to short-list those who wanted to work the overtime according to seniority.

To further underscore the fact that the City’s union problems are self-inflicted is the notion that they agreed to these conditions in the first place. Why would they agree to hand overtime to those workers who have seniority instead of to those who have the most skill or who are most readily available? Undoubtedly, imbedded into every union contract with the City is a litany of work rules, job classifications, seniority, and other regulations that handcuff the City. Any violation of these rules sends them to an arbitrator—where the City invariably loses.

As we have written before, Pennsylvania’s Act 111 of 1968, guarantees public safety (fire and police) workers binding arbitration in exchange for giving up the right to strike. This law is heavily slanted toward the unions by failing to require arbitrators to take into account the financial condition of the City or its ability to pay the contract terms or any comparison of City employee compensation to that of same occupation employees from other cities. Placing effective control over salaries, benefits and work rules, and grievance procedures into the hands of arbitrators operating under Pennsylvania’s extraordinarily biased Act 111 provisions has proved to be disastrous for many Pennsylvania municipalities as costs have climbed across the state, including Pittsburgh. Yet, as with the law allowing teacher strikes, there is little appetite in Harrisburg to reform Act 111 to bring it in line with other states’ arbitration laws. What we have instead is Act 47 and distressed financial status to mitigate temporarily some of the damage done by Act 111. And as we have seen, distressed status has not been a great success in most municipalities that have been forced to apply for Act 47 help.

Combined, the Home Rule Charter and Act 111 have stripped the City of virtually any semblance of power to deal with problems arising from its unions. If any more evidence was needed, the recent series of arbitration losses should be proof enough.

While the most recent damage awards are not huge relative to the City’s budget of about $440 million, the cumulative effect of the employees bargaining power has produced an upward spiral in the City’s cost structure along with a work force on a per capita basis far above the typical U.S. city. Pittsburgh’s government costs keep rising even under the protection of Act 47 and there is not much City leaders are willing to do about it.

Rather than going to Harrisburg and lobbying for more taxes, perhaps the Mayor could find some folks to go with him to urge reform of Act 111. And maybe City Council would recommend a referendum question to revise the language concerning the appeal board to make sure taxpayers’ interests as well as common sense are used in reviewing employee appeals. Unfortunately, pigs will fly before either of these suggestions is implemented. Union leaders will make sure of that.

For the City’s union employees, Pittsburgh may indeed be "America’s most livable city".
Frank Gamrat, Ph.D., Sr.ResearchAssoc.

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