Director of Labor Policy
Q: I heard that Gov. Pat Quinn terminated the state's contract with AFSCME. What just happened?
A: The governor's office announced that it was not going to continue to extend the contract with AFSCME Leadership Council 31. About 40,000 state employees that AFSCME represents are now working without a contract.
Q: How did we get here?
A: The state’s contract with AFSCME originally expired June 30, 2012, but the governor and the union had agreed to extend the contract between negotiating sessions while they tried to put together a new contract. The two sides met with a mediator Tuesday afternoon and failed to reach an agreement on a new contract. AFSCME offered to extend the old contract again, but this time Quinn declined.
Q: So state employees won't be working tomorrow?
A: No – this isn't the same thing as a lockout. Under state law, state employees continue to work under the old contract terms anyway, for the time being.
Q: So you're saying nothing changes and this is all posturing?
A: Not necessarily. The key phrase is "for the time being.” There's a lot of legal rigmarole involved, and nothing is going to happen all at once, but this does open up some options for both sides during the next few weeks or months.
Q: Such as?
A: Quinn could attempt to implement changes unilaterally. That's something he couldn't do while there was a contract in place or while the old contract was extended.
Q: Can state employees strike?
A: Not yet, but we're a lot closer to that point. The union will need to give at least five days’ notice before walking out. AFSCME will probably want to hold a strike authorization vote first. We're probably a couple of weeks away from a strike at least, but without a contract in place, a strike is much more likely.
Q: What are they arguing over?
A: Quinn is looking for two things in the next contract. First, he wants state employees to accept pay cuts. Second, he wants retired state employees to contribute more for the cost of health insurance. The union is resisting both.
Q: What's next?
A: It's hard to predict. My best guess is that the sides will meet at least one more time. If that fails, Quinn may notify the union that he is going to implement his terms on his own, but that depends on just how serious the governor is about reining in labor costs.
Q: What will the union do?
A: I don’t have inside sources at AFSCME, but I wouldn't be surprised if AFSCME holds more protests and schedules a strike vote. If Quinn implements his terms, the union is almost guaranteed to start preparing for a strike by starting protests, picketing, holding a strike vote and then setting a strike date and notifying the governor.
Q: What would a strike mean?
A: It wouldn't quite be the end of the world. A lot of state employees, especially state troopers and prison guards, aren't allowed to go on strike. If all else fails they'll have an arbitrator come in and write a contract. But the rest of state agencies – Department of Human Services, Secretary of State, environmental agencies – those could be shut down.
Q: Could Quinn prevent a strike by agreeing to another extension?
A: Not indefinitely. AFSCME could have decided not to offer the extension themselves, and that would have had the same effect.
Q: What are the sticking points?
A: Illinois is broke but AFSCME refuses to make concessions that would allow Illinois to balance its books. State pensions are underfunded by at least $96 billion – that's the state's estimate, based on fairly optimistic assumptions about investments. The real figure exceeds $200 billion.
The state can’t afford pay raises. The total state debt is $271 billion, or $21,000 per Illinois resident. The state has a backlog of $9 billion in unpaid bills.
AFSCME is also concerned about health care benefits because of the passage of Senate Bill 1313. As a result of this bill, Quinn shouldn't need to bargain with the unions regarding health care benefits. SB 1313 says that the executive branch has the authority to determine how much retired state employees will pay for their health insurance. Retiree health care has always been what's known as a "discretionary" bargaining topic, meaning that the governor should be able to decide this without the union's permission if it's important enough to him.
Q: So why does Quinn say he has to bargain over this?
A: Maybe he's afraid of a strike or what AFSCME can do to him politically, but it isn't because the law says he has to.
Q: Why is the union taking a hard stance?
A: Because the law gives them the power to dictate to elected officials. The governor has to negotiate with the union on many issues, even if individual state employees oppose what the union does. The union receives millions of dollars in guaranteed union dues and uses that money to buy influence with politicians too. Union officials have a lot of power, and there's nobody, not even the workers they represent, who is really in a position to hold them accountable for what they do.
Q: What would a good settlement look like?
A: There are lots of ways this could be settled fairly, but in an ideal world the union would recognize that the state really is in bad fiscal and economic shape, probably even worse than the governor himself says. They would allow for changes to retiree health insurance and then sign a contract that accepts pay cuts and moves new state employees to a defined-contribution retirement plan. That will prevent the state from getting into these huge pension holes in the future.
Q: What can we do?
A: Check out the Illinois Policy Institute’s Labor Manifesto. It helps explain how government unions have put us in such a bind. Then call your elected officials; encourage them to take a firm stand against reckless union demands and call on them to change the labor law to give individual workers more choices and put the public back in charge of government.