Ice age: The wage freeze

TENSIONS BETWEEN Mayor Nutter and the municipal unions ratcheted up a notch on Monday when the city announced a wage freeze for all employees, including pay step increases and longevity payments.

Nutter says he has the authority to impose the freeze because contracts for unionized workers have expired. Cathy Scott of AFSCME DC 47 promises a court action to overturn the move.

The freeze will last only until a new contract is signed, but the city hopes the new agreements will include this freeze for all city employees.

In fact, Nutter is counting on a five-year wage freeze to generate $80 million in savings over five years - a big chunk of the $125 million included in the city budget as concessions from the unions.

Where will Nutter find the remaining $45 million? The only thing left is health care and pension savings, and he'll need to find $9 million in savings in each of the five years.

To put that number in context, health care and pension benefits for city employees cost $830 million in the last fiscal year. If the unions agree to the wage freeze, it might be possible to trim the budget without dramatically impacting benefits. That could be a reasonable trade for both sides.

Union members are understandably upset. For employees who were counting on moving up a step or on increased longevity pay, this move could be considered a pay cut. However, it's a walk in the park compared to what will happen if Harrisburg refuses to approve the sales tax increase. Without more revenue, the city will be forced to lay off thousands of employees in a very short time frame.

What's worse that getting a pay cut? Getting no pay at all. *