Collective bargaining bill places new onus on arbitrators

DES MOINES - When settling a dispute between public employers and employees, an arbitrator must consider wages earned by comparable private-sector workers under one provision of the rewrite of Iowa's collective bargaining laws.

However, such comparisons often are dubious, according to state experts in economics.

After days of debate, lawmakers Thursday voted to dramatically alter the way most public employees bargain for benefits and other compensation. The wide-ranging, Republican-authored legislation includes significant changes to what arbitrators could consider.

One change requires arbitrators, when ruling on a wage dispute, to consider comparisons with wages for private-sector workers who perform work similar to the public worker.

The legislation says arbitrators must consider comparable wages and hours for private-sector workers doing similar work 'to the extent adequate, applicable data is available.”

But truly 'applicable data” is rare, economic experts said. The problem, they said, is that most wage comparisons between public- and private employees do not account for a multitude of variables, including workers' education level.

David Swenson, an economics professor at Iowa State University, said private-sector wages could provide reasonable benchmarks for some jobs such as truck drivers, cooks, custodians and skilled trades workers such as plumbers or electricians.

But most comparisons are not apt, Swenson said. For example, he said private schoolteachers do not have the same continuing education requirements or, on average, the same amount of educational training as public school teachers.

And in some cases, Swenson said, there is little to no comparison at all. For example, he noted there are few private-sector comparisons to social workers.

'The point is that a very broad range of public-service jobs, including a large fraction of those covered by collective bargaining agreements, do not have legitimate private-sector counterparts,” he said.

When public- and private-sector wages are compared, with as many factors as possible included, public workers typically earn less than private-sector workers, state experts said.

'Despite higher incidences of college degrees and advanced degrees, state workers similarly educated make significantly less than their for-profit counterparts,” Swenson wrote in a 2009 report on comparing public and private wages.

The Iowa Policy Project, a liberal-leaning state policy think tank, came to a similar conclusion in a 2011 report.

'Even if the public employee benefit packages are accounted for, Iowa's public-sector workers still earn less than those in the private sector. Indeed, contrary to such claims, Iowa's public-sector workers are undercompensated relative to their private-sector peers,” said the report, written by group research associate Andrew Cannon.

Andrew Klein, with the Iowa chapter of Americans for Prosperity, a national conservative issues advocacy group, said the group thinks public employees earn more than private counterparts. Klein pointed to federal data that shows at the end of 2015 the average government employee in Iowa made $10 per week more than the average private employee.

The federal data includes all government employees - federal, state and local - many of whom would not be affected by the state legislation, which covers state and local employees in bargaining units.

The federal data also accounts only for wages and not other forms of compensation such as health insurance, and it doesn't account for those other variables, such as education levels.

Klein also pointed to a 2014 report by the American Enterprise Institute, a conservative public policy think tank, that concludes state government employees in most states receive greater compensation - a combination of wages and benefits - than similarly experienced and educated private workers.

That report concluded Iowa's state employees - but not all public workers - made, on average, 9 percent more than the state's private workers.

'Public employee wages in nearly all states fall below those paid in the private sector, but fringe benefits - in particular health and retirement benefits - are significantly more generous in government than in the private sector,” the report said. 'In addition, public employees in every state have greater job security than they would likely enjoy outside of government.”

If a wage dispute goes to arbitration under the measure, not only will appropriate data be scarce, experts said, but negotiators may dispute which data sources are appropriate.

'I'm sure comparability will become a point of contention in negotiations,” said Peter Fisher, research director for the Iowa Policy Project. 'A big problem, I think, is wages are only part of total compensation, and I believe total compensation data is harder to come by at the level of occupational detail needed.”