Thursday, July 10, 2014
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Doing the math on contracts, furloughs

Here’s an interesting exercise. Assume for a moment that each of the city’s labor unions receives a contract identical to the new police arbitration award. That would mean each unionized worker in city government could be furloughed up to 30 days a year. In its presentation to the police arbitration panel, the city estimated it would save $42.9 million in year one of the deal if it furloughed every police officer the maximum 30 days. Over the five years of the contract, that amounts to $222.3 million, once wage hikes are factored in. But on practical and political levels, furloughing police officers is tricky. So police would likely be furloughed infrequently, if at all. Furloughing other city workers, however, is another story. “Heard in the Hall” wondered: How much would the city save if it furloughed all of its unionized workers 30 days a year? The city is not issuing any such calculations, but according to our estimates the figure tops out at a whopping $549.6 million over the five years of our hypothetical contracts. Exclude police from that total, and it drops to a still-huge $327.2 million. In fact, that covers much of the $350 million over five years in total salary hikes that Councilman Bill Green warns the city is likely to absorb across all unions as a consequence of the police award. Now for the caveats. There is no guarantee that the city will get 30-day furloughs in its other labor contracts. And even if it does, furloughing every worker for 30 days, or six workweeks, would not be practical. But it seems clear that furloughs could, at minimum, soften the budget impact of union raises.

Doing the math on contracts, furloughs

Here’s an interesting exercise. Assume for a moment that each of the city’s labor unions receives a contract identical to the new police arbitration award. That would mean each unionized worker in city government could be furloughed up to 30 days a year.
In its presentation to the police arbitration panel, the city estimated it would save $42.9 million in year one of the deal if it furloughed every police officer the maximum 30 days. Over the five years of the contract, that amounts to $222.3 million, once wage hikes are factored in.
But on practical and political levels, furloughing police officers is tricky. So police would likely be furloughed infrequently, if at all.
Furloughing other city workers, however, is another story. “Heard in the Hall” wondered: How much would the city save if it furloughed all of its unionized workers 30 days a year?
The city is not issuing any such calculations, but according to our estimates the figure tops out at a whopping $549.6 million over the five years of our hypothetical contracts. Exclude police from that total, and it drops to a still-huge $327.2 million. In fact, that covers much of the $350 million over five years in total salary hikes that Councilman Bill Green warns the city is likely to absorb across all unions as a consequence of the police award.
Now for the caveats. There is no guarantee that the city will get 30-day furloughs in its other labor contracts. And even if it does, furloughing every worker for 30 days, or six workweeks, would not be practical.
But it seems clear that furloughs could, at minimum, soften the budget impact of union raises.

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The Philadelphia Inquirer's Troy Graham and Bob Warner and Claudia Vargas take you inside Philadelphia's City Hall.

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