San Francisco’s largest labor union, Service Employees International Union 1021, is not on board with a proposed charter amendment that would reform the city’s pension system for public employees.
The pension reform proposal was unveiled by a coalition of city officials, labor representatives, and business leaders at a press conference in the mayor’s office in City Hall this morning, May 24. The plan would yield an estimated savings of $800 million to $1 billion in savings over the course of a decade, the bulk of it coming from increased employee contributions to retirement funds of up to six percent for future and current employees. The proposal would raise the retirement ages from 62 to 65, or 55 to 58 for public-safety workers, and impose caps on pensionable salaries for new employees. Mayor Ed Lee described the plan as "a serious, comprehensive plan and one that reflects the consensus." The proposed charter amendment must go through the Board of Supervisors’ Rules Committee and win the approval of the full board before it can be placed on the ballot in November.
Lee emphasized that the pension plan had been crafted with a consensus-building approach over the course of several months, which brought business, labor, and city officials together. Billionaire Warren Hellman delivered comments about the historic nature of the proposal, and Rebecca Rhine from the Municipal Executives Association and Steve Falk from the San Francisco Chamber of Commerce each voiced support for the plan. Sups. Sean Elsbernd and Board President David Chiu spoke of the collaborative and democratic process that had brought everyone in the city family under one tent.
Well, almost everyone.
“We’re stuck on one issue,” noted SEIU 1021 Vice President Larry Bradshaw. Under the plan, a pay cut would go into effect for three groups of lower-paid workers on the same date that they would be responsible for making new pension contributions, July 1, 2012, he explained. The affected workers include nursing assistants, security guards, and clerical workers, he said. While the mayor’s proposal requiring new pension contributions builds in an exemption for city workers making less than $50,000 per year, many of these SEIU employees would fall just above that cutoff mark, Bradshaw said.
“We’ve got workers that are just about at the $50,000 threshold … so they’re going to be paying about $2,000 a year out of their pocket,” toward new pension contributions, he said. “So the mayor’s plan has these workers, who are our lowest-paid workers, taking this huge pay cut, and then they want us to agree to this increase in contributions. And the scale of these pay cuts are just enormous. For someone who’s making $50,000 a year, to ask them to take $2,000 or $3,000 on top of $12,000 in a pay cut, is impossible.”
The pay cut is a leftover from the administration of former Mayor Gavin Newsom. For certified nursing assistants, the shift would amount to a roughly $12,000 annual pay cut, Bradshaw said. Security guards would face an estimated $5,000 per year cut, and clerical workers could face anywhere from $1,000 to $11,000 per year. Bradshaw estimated that a total of about 570 city employees would be affected. The workers faced getting fired and re-hired at lower-paid classifications in a prior budget year to make up for a revenue shortfall, but the union reached an agreement to stave off the worst pay cuts for those “de-skilled” employees by imposing a one percent across-the-board cut for all members in order to restore the salary cuts.
“This was such a sore point with our membership, the membership would not allow us to turn our backs on these workers, and we couldn’t get the city to restore the pay cuts,” Bradshaw said. “So we voluntarily took a one percent pay cut for every member to make up the loss in pay that these workers suffered.”
This arrangement would no longer be possible under the pension reform proposal, he said, because most union members would be asked to contribute 3.5 to 5 percent toward their pensions. “We’re already paying one percent more, so we’re not going to have that option of asking our members to keep funding these workers who have taken this 20 percent pay cut,” he said. “So the same day this goes into effect, these people take this horrible hit in their pay. And these are primarily women and people of color. Our problem is, we can’t leave these workers behind.”
Until that issue is resolved, the union cannot get on board with the plan, he said. “We’ve been waiting three weeks to meet with the mayor, and we can’t fix the problem if we can’t sit down with the mayor and talk about it,” he said, noting that union representatives had been able to sit down with mayoral chief of staff Steve Kawa. Restoring the pay cut would have an estimated financial impact of $5 to $6 million.
Bradshaw said SEIU 1021 had hoped to fix the problem in order to be able to get on board and voice their support during the announcement this morning. “We were at the table until 11:30 last night," he said. "We called the mayor, we had Tim Paulson at the [San Francisco Labor Council] text the mayor, we asked the city team to ask the mayor to come in. The mayor was a no show.” The Guardian has placed calls to the mayor’s office seeking comment, but hasn’t yet heard back.
Asked what he thought the outcome might be, Bradshaw said, “We think this situation cries out for justice. We think there are lots of ways to solve this problem, and we keep putting ideas on the table that are rejected by the mayor’s office. We’re hopeful. But, until we sit down with the mayor, it’s kind of a big question mark.”
SEIU 1021 represents around 17,000 city workers, making it the largest and one of the most politically powerful labor unions in the city.
Pattie Tamura attended the press conference on behalf of SEIU 1021, but stopped short of voicing support for the proposal when reporters questioned whether the union was on board with the plan, saying only that negotiations were ongoing. Bradshaw said they sent a representative as a sign of respect for the collaborative process that had been spearheaded by coalition leaders, particularly Warren Hellman.