Public Sector Unions and Public Administration: The Impact of Statutory Collective Bargaining Joseph Adler A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Public Administration School of Public Affairs University of Baltimore Baltimore, Maryland August 25, 2011 ACKNOWLEDGMENTS There are many people to thank and too little space to list them all. But a few stand out for special mention. I would like to thank the members of my committee—Dr. Heather Wyatt-Nichol, Dr. Lenneal Henderson and Dr. Larry Thomas for encouraging me to undertake and more importantly to complete this journey. A number of colleagues offered support and acted as a sounding board, including Art Wallenstein, Uma Ahluwalia, Parker Hamilton, Steve Farber, Sarah Miller-Espinosa and Stephanye Maxwell. My daughters, Laura E. LeCron, and Jillian S. Thomadsen, for their encouragement and support even when it meant missing family visits. My brother Michael Adler and his family for their love and encouragement. Most of all to my wife, Judith Sachwald, for constant support and understanding especially when many weekends got tied up with course work; and then later with writing the dissertation when her editing talents transformed a collection of research notes and drafts into a well-structured and crisp document. i ABSTRACT Public Sector Unions and Public Administration: The Impact of Statutory Collective Bargaining Joseph Adler This dissertation attempts fill the gap in public administration research by undertaking a comparative case study of the effects of collective bargaining on public administration and human resource management. The findings suggest that the presence of legally mandated collective bargaining does not guarantee consistent economic gains, nor does the combined presence of a bargaining law and union political involvement lead to union favorable outcomes in public policy issues. Unions have a large impact on ensuring employee due process and on management’s ability to unilaterally determine changes in policies and processes. Management rights clauses do not appear to be effective against unions’ determination to represent members in all aspects of the working environment. ii TABLE OF CONTENTS LIST OF FIGURES.......................................... ix LIST OF TABLES......................................... xiii CHAPTER 1 INTRODUCTION.............................................. 1 Public Sector Unions in the 21st Century.................. 6 Statement of Purpose..................................... 10 Relevance of Study and Organization of the Research Project.................................................. 12 CHAPTER 2 REVIEW OF THE LITERATURE................................. 16 Introduction............................................. 16 The Labor Movement in the United States.................. 19 The Decline of Private Sector Unions..................... 22 Analysis of the Research on Labor’s Decline.............. 32 The Growth of Public Sector Collective Bargaining........ 35 Criticisms of Public Sector Collective Bargaining........ 43 Public Unions and Periods of Retrenchment ............... 47 Review of research on wages and public sector unions 52 CHAPTER 3 RESEARCH METHODOLOGY..................................... 67 Introduction............................................. 67 i Comparative Case Study Design............................ 69 Montgomery County, Maryland and Fairfax County, Virginia: Are they Comparable Jurisdictions?....................... 74 Why these two local governments? .................... 76 Population Demographics and Characteristics ......... 78 Comparison of Other Population Characteristics ...... 79 Government Services Expenditure Comparisons ......... 81 Employee Distribution Comparisons ................... 86 Collective Bargaining vs. Meet-and-Confer and/or Political Action/Lobbying ........................... 88 Summary of Argument ................................. 91 Data collection and analysis procedures.................. 92 Data validation procedures .......................... 93 Sources of Evidence...................................... 94 Summary of the importance of triangulation .......... 94 Chapter 4 RESULTS AND FINDINGS.................................... 104 A Comparative Analysis of Salaries and Benefits of Public Safety Employees in Montgomery and Fairfax Counties................................................ 104 Legal Framework for Determining Public Safety Employee Concerns in Montgomery and Fairfax Counties............. 105 History of Salary Increases: Fairfax and Montgomery Counties 2004-2014...................................... 109 Police Officers .................................... 109 Firefighters and Emergency Rescuers ................ 110 Deputy Sheriffs and Correctional Officers .......... 114 Summary of public safety general base salary increases .......................................... 116 Comparisons of Public Safety Salaries at Certain Career Points ................................................. 120 Police Officer Entry Level Salaries................ 120 Firefighter and EMS Entry Level Salaries........... 121 Deputy Sheriff Entry Level Salaries................ 123 Correctional Officer Entry Level Salaries.......... 125 ii Salary of Each Public Safety Group at the Completion of Three, Five, and Twenty Years of Service................ 130 Salary Data Analysis: Police ....................... 130 Salary Data Analysis: Firefighter and EMS .......... 132 Salary Data Analysis: Deputy Sheriffs .............. 137 Salary Data Analysis: Correctional Officers ........ 138 Impact of Statutory Collective Bargaining on Salaries... 141 Comparison of Public Safety Health Insurance Benefits in Montgomery and Fairfax Counties......................... 146 Health Insurance Comparisons ....................... 147 Kaiser HMO Analysis ................................ 149 Point of Service and Standard Option Plans ......... 150 Discussion of Prescription Benefits ................ 153 Collective Bargaining and Health Benefits: Discussion and Analysis ............................ 156 Comparison of Retirement Benefits for Public Safety Employees between Montgomery and Fairfax Counties....... 158 Discussion of public policy issues related to public employee pension plans ...................... 158 What are the casual factors for the “crisis” in public employee pension plans? ..................... 160 Has the end of the economic recession improved the funded status of public sector defined benefit pension plans? ..................................... 164 How did the pension plans of Montgomery and Fairfax fare during 2002-2013? ............................. 165 Comparison of Montgomery County and Fairfax County Defined Benefit Pension Payments—Methodology............ 167 Fairfax County Public Safety Retirement Plans ..... 168 Montgomery County Retirement Plans ................ 169 Discussion and Analysis ........................... 170 Additional Pension Research Methodology and Findings .......................................... 173 Impact of Statutory Collective Bargaining on Public Safety Pension Plans.................................... 178 Paid Time Off: Comparing Policies on Sick Leave, Annual Leave, Holidays, and Personal Leave..................... 182 Police officer leave policies ...................... 182 Firefighter and EMT leave policies ................. 184 Deputy Sheriff and Correctional Officer leave policies ........................................... 186 iii Impact of Statutory Collective Bargaining on Leave Policies................................................ 189 Overall Summary of the Union Effect on Salaries and Benefits for Uniformed Public Safety Personnel.......... 191 CHAPTER 5 Public Sector Unions and Political Campaign Contributions........................................... 193 Public Safety Union Political Contributions in Virginia and Maryland............................................ 194 Virginia Political Contributions ................... 194 Maryland Political Contributions ................... 197 Public sector union contributions to political campaigns in Fairfax County ........................ 200 Public sector union contributions to political campaigns in Montgomery County ..................... 212 Lobbying and Political Action vs. Collective Bargaining: Impact on Policy Outcomes in Fairfax and Montgomery Counties................................................ 222 Public Safety Pension and Salary Structure Reform Proposals in Fairfax County ........................ 224 Proposed Changes in Pay Structure by Fairfax County Executive .......................................... 231 Reaction by Employees and Follow–up Action ......... 239 Workforce Dialogue: Collective Bargaining under a different nomenclature ............................. 240 Public Safety Pension Modifications, Health Insurance Cost Shifts and Police Labor Law Changes in Montgomery County: Union Defeats................................... 242 Health Insurance Premiums and Employee Pension Contribution Increases ............................. 242 Content of Proposed Unilateral Changes ............. 244 Council Action on Public Safety Service Connected Disability Retirement................................... 253 County Council Involvement, Part I ................. 258 County Council Involvement, Part II ................ 259 Montgomery County and Fraternal Order of Police: The Demise of Effects Bargaining................................... 262 FOP Response