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A labor battle is brewing: Philadelphia’s mayor freezes payroll increases

Philadelphia is in the midst of a union battle that could be one of the more dramatic tussles that the city has seen with its four major municipal unions in years.

With the Philadelphia budget in shambles and a projected $1-billion dollar deficit over the next five years, Mayor Michael Nutter has proposed payroll changes that city workers are finding tough to swallow.

Nutter will be cutting payroll increases for more than 20,000 city workers, according to The Associated Press. Typically these increases are given to city workers on the anniversary of the worker’s hire.

The change is expected to save $8 million dollars over the course of next year and may save the city $50 million over the course of the next five years.

The Inquirer first picked up the story on March 9th, when it reported that one-year contracts with labor unions were set to expire on June 30th.

Back then, labor unions and city officials sparred publicly over worker pensions and benefits. The Inquirer reported back in March that Nutter repeatedly stressed that employee pension and health care costs consume 21 percent of the city’s $4 billion annual budget.

Now the fire is in full flame, Nutter is taking his first big steps toward restructuring employee payrolls. On July 2, more than a thousand city workers protested outside of City Hall, demanding fair salaries and worker compensation.

But these workers are not likely to see the freeze lifted anytime soon. With payroll increases frozen and city negotiators seeking new contracts that do not include pay increases, city workers, including those backed by labor unions, seem unlikely to see payroll increases anytime soon.

The Daily News reports city officials saying that a Supreme Court ruling makes the payroll freeze legal. The ruling says that the city must maintain the “status quo” of worker compensation. Payroll increases are explicitly stated to not be part of the status quo.

Although this type of action on behalf of the Nutter administration is to be expected when the city faces dire budgetary problems, it leaves us begging for more answers to important questions.

When will the payroll increases be reinstated? How will the city attract qualified, skilled and motivated workers when salary advancement is no longer a motivator? How will the city boost the morale of municipal workers and make Philadelphia a healthy environment for its city workers?

And another question that begs to be answered… will Philadelphia see a strike anytime soon?

July 8, 2009 at 9:26 am

--Kenneth Elder

Tags: Michael Nutter, Philadelphia

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