Gap between state workers and counterparts’ earnings one issue in Inslee pay talks

Staff writerJuly 4, 2014 

A 2014 consultant’s report that says 81 percent of Washington state employees earn less than their counterparts in the public and private sectors is being cited by union leaders as they make the case that state workers deserve a cost of living adjustment.

Such inflation-based raises will be a key part of the talks between Gov. Jay Inslee’s labor team and more than 25 unions this summer. Inslee, a Democrat elected with labor’s help, is on record as saying he believes state workers and public school teachers deserve a “modest” boost in pay after six years without cost of living adjustments, or COLAs.

"Ordinarily it would be our year (for raises). It needs to be,” said Dave Schiel, president of the Washington Public Employees Union, who noted that the lack of COLAs has continued even while the economy has begun turning around. “Our members are really, really, really, really fed up.''

The pay report, issued in April, relied on data from mostly unionized employers. It found that two-thirds of state workers’ pay is within 25 percent of competitors but in certain job categories, such as auditors at the Department of Revenue, pay is 45 percent behind.

As part of the survey the governor’s Office of Financial Management also used a benefits survey from 2013 to show that Washington state’s fringe benefits are very competitive – both with private sector and government health plans offered in other jurisdictions, according to an explanatory document prepared by OFM. The value of the state’s medical benefits is $10,800 a year compared to a $8,909 value of public and private sector plans surveyed by Segal Consulting, the firm hired by the state to do the survey that included general government agencies and many higher education institutions.

Andre Winstead is one of the revenue auditors whose job class, according to the salary survey, pays 45 percent less than the sample of other government and private sector workers in state and out of state that Segal used for its comparisons. A member of WPEA, his job is to go into the field and compare the books of a business against its tax returns.

Winstead works out of Revenue’s Vancouver office and said he’s seen co-workers earn accounting licenses and leave for better pay at big firms. The former military careerist called compensation a good way for the state to acknowledge the “great work and dedication” the DOR staff provides.“Our contribution for health insurance increases but our income doesn’t move,’’ Winstead said.

“If your people aren’t happy with compensation do you think morale is going to be up there?” Winstead added.

OFM’s survey overview says pay ranges “are competitive at the entry level” but the lag grows as one moves to the top of ranges. That said, the report finds the state is retaining personnel in more than 90 percent of job classes - “including many of those that fall into the more than 25 percent behind the market category,” OFM wrote in its April overview. The agency has calculated separately that its government-wide job turnover rate was 7.1 percent last year, lower than the U.S. average and lower than any other year since 2009.

Schiel said in an interview before face-to-face negotiations began - which triggered a no-disclosure rule for negotiators - that his union could seek a double-digit raise for the two-year contract period in 2015-17.

But he also acknowledged that the state’s legal obligation to spend more for public schools is creating downward pressure on wages.

If the governor’s team were to agree to just a 1 percent pay raise for all general government and higher education employees in 2015 alone, the first-year cost would be about $33 million from the general fund and $44 million from all other funds, according to the OFM. Over two years, the cost grows to $66 million from the general fund and roughly $154 million from all sources.

The salary survey was done by Segal Consulting, which the Office of Financial Management also hired for the 2010 survey that looked at how well pay was holding up for the state’s workforce. The surveys were scheduled to be done every two years but the 2012 version was skipped due to belt tightening during the Great Recession.

Overall, the survey, which compared state pay with similar state, local or private sector job compensation, found two-thirds of state government positions were within 25 percent of peers. It found 19 percent paid above-market rates including rehabilitation counselors earning 8 percent more than peers on average. But 33 percent of workers were more than 25 percent below market, including automotive mechanics who were 37 percent behind.

Some of the biggest gaps are with jobs in finance, insurance, educational or library services, according to OFM’s analysis of the report. But the pay gap exists in most classes of jobs - measuring 31 percent in the finance and insurance sector, 28.5 percent in educational or library services, 25 percent in administrative and support services, 20 percent in IT and media services, 15.8 percent in utilities and 11.3 percent in transportation or warehousing.

The Freedom Foundation, a libertarian-style conservative think tank that is critical of collective bargaining, analyzed the salary survey earlier this year and noted that half of participants in the survey were public sector, and 74 percent of private sector employers used were from the higher-wage King, Snohomish and Pierce counties. Analyst Amber Gunn, who argues for more contracting out rather than having the state compete for talent, said “a Puget Sound-centric survey has the potential to skew salary data for particular jobs much higher than what is paid for the same job in other areas of the state.”

She added, “If the goal of the salary survey is to identify hits and misses in terms of lining up with the market, this is already a huge miss, though not one likely to be highlighted by union bosses during the course of ongoing secret salary negotiations. The union chokehold on public sector employees is highlighted very clearly in the data.”

But representatives of the Washington Federation of State Employees, Teamsters and Washington Public Employees Association all say workers are doing more work for dollars that buy at least 10 percent less than they did in 2008.

A separate survey done in May for the Department of Corrections found state pay for corrections officers was also slightly behind the average for peer states around the country but lag at the high end of the salary range. Benefits lag somewhat for pensions and such things as long-term care, but health premiums for several plans were roughly comparable to other states.

“The worker perspective is ... we are far behind,” said Eric Smith, a prison transport sergeant who has worked at the Washington Corrections Center near Shelton since 1996. A member of the Teamsters Local 117, Smith said he sees many workers enter corrections at the state level, get training, then move on to more lucrative jobs at county or city venues.

“Once they get trained they work for us a little bit and then say I can make more money in King County or Pierce County or Snohomish County – I think even Mason County …. So they go to work there,’’ Smith said.

Patti Pollardo, a program specialist who administers tests at Edmonds Community College in Lynwood, said she is “tired of living from paycheck to paycheck. We have continually every year gone further and further in the hole. Our salaries don’t go up, but our expenses go up.”

Pollardo is in a program specialist 2 job that the survey showed is 39.2 percent behind similar jobs.

Contracts are supposed to be completed and ratified by Oct. 1, which is the deadline for putting in spending requests for Inslee’s next two-year budget.

bshannon@theolympian.com theolympian.com/politicsblog @BradShannon2

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