The Power of Pay

When the ink dried on the collective bargaining agreement signed last August by Federal Aviation Administration and National Air Traffic Controllers Association officials, union members got the gold. They won a collective $200 million raise over three years, adding as much as $10,000 a year to the salaries of controllers in high-traffic centers. Supervisory staff, in good country-western-song style, got the shaft. Money for the raises would come in large part from reductions in supervisory ranks to decrease ratios of managers to front-line personnel from 1-to-7 to 1-to-10.

The negotiation was a remarkable first: A non-postal employee union bargained with management over wages. Federal managers, policy-makers and politicians have managed to keep pay off the negotiating table for the 40-year history of modern federal labor relations. The prohibition was symbolic of the general stranglehold management has held over labor at the federal level ever since President Kennedy first sanctioned collective bargaining for federal employees in 1962. That stranglehold was painfully obvious when members of NATCA's predecessor, the Professional Air Traffic Controllers Organization, were all fired after their nationwide strike in 1981.

NATCA's victory was twofold. Not only had the union bargained over money for the 14,300 air traffic controllers it represents, it had bargained over supervisory staffing levels. And in the opinion of Mark Gable, executive director of the Federal Managers Association, FAA had achieved the dubious distinction of having been fleeced to its skivvies by a union once considered to be the poster child for labor impotence. His succinct summary: "NATCA took the FAA to the cleaners."

It's a charge that NATCA insiders don't strenuously deny. After all, being accused of having picked management's pockets at collective bargaining time is the sort of criticism that unions can take all day, and for a simple reason: That's exactly what unions want their membership to hear.

When it comes to unionism--in the public and the private sector--membership is what it's all about. Federal unions have been fighting to hang onto members since the labor rosters peaked in the 1970s. Some of them are doing a fairly good job of it, but others continue to struggle. One key to building membership is the ability to deliver concrete benefits to workers, and there is no more concrete benefit than compensation. Healthy unions have found new ways to broaden the severely conscripted scope of bargaining, using every opportunity to pull the normally off-limits but absolutely critical issue of salaries into contract negotiations. Members like it.

NATCA is one of those unions that has succeeded in placing pay issues on the bargaining table. The National Treasury Employees Union is another. NTEU, which has steadily added dues-paying members since 1983, recently won a significant compensation coup for workers at the IRS. NTEU deftly parlayed last year's congressional IRS overhaul into an opportunity to bargain over pay, albeit indirectly. According to NTEU President Robert Tobias, the subject of how jobs are classified is now on the table. Job classifications determine job grades. Grades determine salary levels. In the past, unions could challenge agencies that downgraded employees' classifications, but they couldn't negotiate upgrades. At the IRS, NTEU has put classification upgrades on the table.

How NTEU won the right is a straightforward lesson in smart unionism. As part of the IRS reform bill, NTEU argued in favor of "certain personnel flexibilities," says Tobias. NTEU argued that a high-performance organization needs flexible personnel rules and so the IRS should be granted certain exemptions from Title V of the U.S. Code, the law that dictates personnel rules for the federal government. The union didn't go out of its way to explain that it also would win flexibility in what it could negotiate. While NTEU still can't bargain directly over dollars and cents, the next best thing is now on the table.

"It's a whole new arena, and we look forward to seeing if we can create some solutions to long-standing problems we've had around people being under-classified given their expertise," Tobias says.

NTEU's membership remains fairly healthy compared to its "big three" counterparts--the American Federation of Government Employees and the declining National Federation of Federal Employees--in part because of aggressive recruitment campaigns. Recent forays into the Food and Drug Administration and the Environmental Protection Agency netted NTEU 6,500 and 2,500 potential members, respectively. But what distinguishes NTEU from AFGE and NFFE is that it has aggressively and successfully fought for the right to bargain over wages and benefits for its members.

NTEU won the right to bargain over pay and benefits on behalf of its FDIC membership several years ago after it discovered that FDIC was exempt from Title V restrictions. Union officials quickly petitioned management to open up negotiations to compensation.

Not all unions have been so successful. That includes the largest federal union, AFGE, which nevertheless is certainly trying. In on-again-off-again negotiations with the Defense Department, AFGE has said it would accede to management's request for more flexibility in assigning pay grades to employees, but only if such assignment was subject to negotiation. AFGE National President Bobby L. Harnage says his union already has been burned once when it agreed to such a management-directed pay system for nurses at veterans hospitals. Management has used the flexibility to keep wages as low as possible, he says.

While trying to score wins for its membership through negotiations like those at DoD, AFGE is focusing on two other potentially membership-building strategies. First, it is trying to persuade non-dues-payers that to lobby the administration and Congress for higher wages, the union needs the clout of dues-paying members. Second, it is raiding NFFE's membership through what Harnage describes as friendly takeovers. Right now, AFGE has its sights set on NFFE members at the Veterans Administration. For the record, NFFE doesn't regard the incursion as even remotely friendly.

Dipping Memberships

Through all this activity, AFGE has managed to add about 14,000 members in the last five years, even in the face of government downsizing. But it's difficult to claim that the union is robust. The 183,000 dues-paying members on its rolls today are far short of the 255,000 that belonged in 1981. And when put in the context of the chronic problem facing all federal unions--no federal employee is compelled to join a union even when represented by one--AFGE's membership woes become clearer. AFGE has signed up only about 30 percent of the 600,000 federal employees it represents. The 417,000 free riders, as they're known in the business, enjoy free of charge all the perks of union membership, including union help over grievances and other non-wage benefits that unions can win for employees through collective bargaining.

The membership picture at the National Federation of Federal Employees is even bleaker: "The whole downsizing of the federal government has hit us hard," says Richard Brown, NFFE's new president. "I was in an Army installation that lost 2,500 people and it cost us 300 members right there. We're stable right now, but it's a fight because of layoffs."

At a time of downsizing, the imperative to sign up dues-paying members would seem even stronger. But the going is tough. "In most agencies you have relatively small actual membership in these unions because there's little to persuade reluctant employees to pay up," says Ned Lynch, a top staffer on the House Government Reform and Oversight subcommittee on civil service.

One thing, though, seems to work--the ability to bargain directly over pay and benefits. When a union has that, it has the attention of those it represents. They more readily make the link between membership, the strength of the union and the size of their paychecks at the close of collective bargaining. "If we had the ability to bargain over wages and benefits," NFFE's Brown says, "every person who's eligible to join our union probably would."

The larger postal worker unions, which won their exemption from federal personnel laws in the early 1970s, have paid membership rates that run upwards of 90 percent. Smaller unions, which for various reasons are also exempt from the ban on bargaining over wages and benefits (unions representing Tennessee Valley Authority employees, for example), also enjoy high rates of dues-paying membership. NATCA boasts a membership rate of about 75 percent.

The Partnership Pitch

Some federal union officials bend a little too far backward to deny that negotiating pay is a big deal. "If it's merely the delivery of a check, why would anyone join?" says NTEU's Tobias. "The issue is whether a union is helping people become part of the process of problem identification and figuring out solutions, and when something good happens in your workplace you can say, 'Wow, I'm part of this.' "

Some AFL-CIO officials have little patience for such a Pollyanna point of view, sincere or not. They say it's not merely delivery of a check that induces workers to join unions, it's the ability to bargain for a larger check every year. "The fact that wages and benefits are not negotiable is reflected in the relative inability of federal employee unions to gain substantial membership, and it's as simple as that," says one AFL-CIO official. And while Tobias asserts that bargaining over pay is no big deal, NTEU's push at the FDIC and IRS indicates the union is eager to do exactly that. And, at 67 percent, NTEU's membership rate is more than double AFGE's.

Besides, if collective input into the operation of the workplace is the most powerful inducement to joining a union, as Tobias asserts, then AFGE and NFFE should be sporting membership percentages as high as NTEU's. That is because the labor relations hallmark of the Clinton administration has been an emphasis on broadening the opportunity for worker involvement in resolving workplace issues. President Clinton's much heralded Executive Order 12871, signed in October 1993, included two initiatives that, on paper at least, expanded worker input into the day-to-day management of agencies' affairs and increased what would be considered negotiable at collective bargaining time.

The chief vehicle for the greater workplace cooperation is Vice President Al Gore's reinventing government spinoff, the National Partnership Council. Situated at the Office of Personnel Management, the council was set up as the quarterback for a governmentwide effort to encourage labor-management cooperation. The council extended the list of negotiable issues to include staffing levels, job assignments and content of jobs, which previously could only be put on, or taken off, the table at the discretion of management. All this extra involvement, according to Tobias' theory of what motivates union members to pay up, should mean healthy federal unions. But of the 1.1 million federal employees represented by unions, less than 40 percent actually pay dues.

The executive order just hasn't proved to be the transformational document that some union members had hoped it would. Success on the partnership front so far is anecdotal. In some places it seems to be helping government do a better job, while also improving labor relations. Tobias points to a reinvented relationship between labor and management at the Customs Service.

"We went from a labor-management relationship that was totally hostile and adversarial to a situation where real mission responsibilities are discussed and worked on and improved in partnership," Tobias says. One success, he says, is a drug interdiction system that was redesigned and re-energized with worker input, leading to a 41 percent increase in the amount of drugs captured in 1998, compared with 1997. AFGE, for its part, has published a booklet called "Government That Works: AFGE Labor-Management Partnerships Making the Difference" that chronicles partnership successes from Veterans Affairs Department offices in Detroit to Education Department offices in Atlanta. But both Tobias and Harnage acknowledge that life on the partnership front has been uneven.

However, the impact of the President's move to broaden the scope of collective bargaining is quite clear: It hasn't had any. Beleaguered career managers, who were all but ignored in the early phases of the National Performance Review, dug in and refused to comply with the order to expand the scope of bargaining. Unions complained to the Federal Labor Relations Authority--the chief arbiter of labor-management disputes. The FLRA concluded it had no power to enforce the order. The issue is now in court.

Back Door to Bargaining

If the ability to bargain over pay is a big part of what has made unions such as NATCA, postal organizations and NTEU so healthy, then why haven't AFGE, NFFE and even NTEU been more militant and direct in arguing for the same right? Virtually everywhere else, unions have the right to bargain over wages and benefits, including the federal unions' counterparts at the state and local government level. "If I were Bob Tobias, I'd want what NATCA got," says FMA's Mark Gable.

So far, though, there has been no broad-based frontal assault on either the Clinton administration or Congress for such an expansion of bargaining rights. Some union leaders have a harsh explanation for such passiveness. "It's a manifestation of an institutional problem whereby the traditional unions in the federal sector have learned not only to live with their idiotic non-bargaining relationship, but even love it," says a top federal union official.

Of course, it's more complicated than that. Union leaders doubt a frontal assault on a Republican-controlled Congress--or even the Clinton administration--would get them far. "We've always been intrigued with the notion of bargaining for pay," says a big three staff member. "We've been struggling with how to approach that. I don't think that calling for it directly is the smartest strategy. On the other hand, at some point we may just decide, 'What the heck,' and go for it."

To date, though, unions have decided to go the strategic route, waiting for the right opportunity to shoulder the door open once it has been cracked. Which is exactly what NATCA did last year. In fact, how NATCA won the right to bargain over wages isn't so much a story about a union taking the FAA to the cleaners as it is a story of the Clinton administration dropping the FAA off at the cleaners. All NATCA did was a little tough, smart bargaining once it got the FAA into the negotiation washing machine.

According to both union and management sources, the White House, after long-running discussions with labor over the expansion of bargaining rights, decided in 1995 to prove to union leaders that it really is friendly to the idea. It leaned on FAA Administrator Jane Garvey to include three lines in the agency's 1996 appropriation request that would largely exempt the FAA from Title V restrictions on bargaining over wages and benefits. A Republican Congress, which normally would reject such a provision out of hand, instead went along rather meekly. Lawmakers apparently were not interested in annoying a vocal and important constituency--air traffic controllers. Besides, only about 45,000 employees are affected (FAA employees are represented by four bargaining units in all).

NTEU seized a similar opportunity when it came time to reform the IRS and in effect got what the air traffic controllers got--new power to negotiate compensation by negotiating classification upgrades.

"You look at that piece of so-called reform legislation," says Lynch at the House subcommittee on civil service. "It was the same situation as with the FAA; it's the employee union that takes most advantage. . . . They ride into the hearings with a reform agenda that effectively ends with 'How do we get our share out of this?' " The strategy may rub certain Republican subcommittee staffers the wrong way, but it sure works for unions.

Besides, critics say, it's more than a little strange that federal unions have been prohibited from bargaining over money in the first place. At the state and local level, next year's raise and what sorts of benefits will come with it aren't just boilerplate discussion, they are mandatory bargaining points. Even in a right-to-work state such as Texas, where state and local unions are prohibited from collective bargaining, teachers unions will sit with management for discussions that are euphemistically labeled "meet and confer." They talk about issues such as what management will budget for teachers' salaries in the upcoming year. When it comes to negotiating over wages and benefits, state and local unions don't always get what they want. But they are at least involved in the discussion.

Asked about the arrangement at the federal level, the response of local government union leaders isn't surprising. "It's archaic and it's crippling to unions not to be able to bargain over wages and benefits," says Steve Fantauzzo, head of the American Federation of State, County and Municipal Employees local that represents employees in Indianapolis.

Certainly, workplace issues are important. Fantauzzo points out that AFSCME recently organized the custodial staff at the U.S. Capitol because janitors perceived working conditions to be supremely lousy, not because the union promised to get them big raises. "Where you have a union that is aggressive in protecting the rights of a fairly homogeneous group, like air traffic controllers or Treasury employees, you will usually find higher levels of membership," Fantauzzo says. In the cases of NATCA and NTEU a collective beleagueredness--for NATCA members it's working conditions; for NTEU members, national outrage over IRS practices--among those whom the unions represent has likely spurred members to sign up.

But the evidence is clear: Unions that one way or another win the right to bargain for pay have a much brighter future than those that don't. And if supervisory staffing levels happen to wind up on the table as well, that's fine, too. "It's a self-reinforcing cycle," Harnage says. "The more effective you show your membership that you are, the more they'll want to join. The more that join, the more effective the union becomes."

It's a straightforward formula for federal unions that will make the difference between being vulnerable to the vagaries of Washington politics--downsizing and all--and becoming a consistent force to be reckoned with.

Jonathan Walters is a senior staff writer at Governing magazine and author of Governing's Guide to Performance Measurement for Geniuses (and Other Public Managers), 1998.

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