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When Unions Stick It To Taxpayers: The Problem With Binding Arbitration

In addition to effectively eliminating secret-ballot elections, one of the other main components of the currently sidelined (and hallucinogenically-named) Employee Free Choice Act is “binding arbitration“—the process of letting an outside arbitrator dictate wages and benefits of a business or organization.

In the public sector, where states have collective bargaining laws, certain states like Pennsylvania impose binding arbitration on municipalities when contract negotiations fail to produce an agreement.

When binding arbitration takes place, there are typically winners and losers.

For example, in the case of York, Pennsylvania, the losers are, once again, likely to be the taxpayers.

York, PA – County commissioners said they’re very unhappy with a three-year contract proposal calling for raises for more than 300 courthouse employees that an arbitrator has come up with, claiming it’s too generous during lean times for the county. But union officials say the proposal does represent sacrifices on the part of county workers.

County director of human resources Bob Nace outlined the basics of the proposal for commissioners at Wednesday’s meeting.

The contract would be retroactive to the beginning of 2010. It would provide a 2-percent salary increase for 2010, 3.3 percent for 2011 and 3.3 percent for 2012.

All three commissioners said they thought those amounts were unreasonably high. President Commissioner Steve Chronister said they will discuss their options, but acknowledged that they likely have no choice but to accept the terms.

Nace told commissioners that the only way to appeal binding arbitration is in the courts, and the chance of getting it reversed is very small. In all likelihood, Nace said, an appeal would amount to throwing away legal fees on a court fight the county is virtually certain to lose.

Commissioner Doug Hoke said he believes the proposed salary increases are completely beyond what the private sector is paying. He finds that particularly objectionable given the state of the economy.

“It’s totally out of bounds,” Hoke said.

Kevin Cicak is business agent and recording secretary for Teamsters Local 776, which represents the workers who would be under the contract.

Cicak said the question of whether or not those percentage increases are comparable with the private sector depends on which part of the private sector you’re talking about.

[snip]

“They should be glad they have a job,” Chronister said of the affected workers. “They should be glad to get a little bit of a raise.”

Since appealing the arbitrator’s decision would be cost prohibitive and the county would likely end up with the same results, if the county’s budget cannot absorb the mandated pay increases, the only likely alternatives are 1) lay off employees, 2) raise taxes and/or fees, or 3) a combination of both.

With York’s Caterpillar plant gone (thanks to the UAW), its Harley Davidson plant at a fraction of its former size, as well as the overall tight budget, York County’s commissioners are right to be upset—as its taxpayers should be as well.

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“I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776

X-posted.

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