Union leaders are closing in on an agreement with Mayor Rahm Emanuel that could pave the way for increased health care premiums for more than 10,000 city tradespeople, a powerful labor leader disclosed Tuesday.
Chicago Federation of Labor President Jorge Ramirez refused to say how much more employees would pay, or if labor would demand a no-layoff/no privatization guarantee in return along with a continuation of the prevailing wage paid in private industry.
He would say only that negotiations “concentrating on health care” are “getting productive” and he hopes to finalize an agreement “sooner rather than later.”
“We’ve been under a 10-year agreement. A lot of good things came from that … for the stability of the city and the workforce. It’s in all of our best interests” to strike a new deal, said Ramirez, chairman of the labor-heavy investor group that recently purchased the Chicago Sun-Times.
Ramirez hedged when was asked whether labor was prepared to increase a family health care contribution that, Inspector General Joe Ferguson claims, is half the average paid by private-sector workers.
“We don’t know yet because it’s a package deal. It depends on what the overall package looks like,” he said.
Retiring senior adviser Mike Rendina, Emanuel’s liaison to organized labor, acknowledged that controlling health care costs that “have been flat for the last four or five years” has been a primary focus of the talks.
Already, City Hall and labor have worked together to promote a wellness program, change prescription drug coverage, offer incentives for managed care and trim the network of hospitals to those offering high-quality care at lower costs, Rendina said.
“To keep the quality of care that we have for our employees, we’re gonna have to approach it differently,” Rendina said. “We’re asking them to be good partners and to be fair. In every conversation we’ve had thus far, we’ve seen a willingness to do that.”
Contracts with more than 90 percent of the city’s 30,000-plus employees have expired. Two-thirds of those contracts took effect nearly 10 years ago, when former Mayor Richard M. Daley sought to guarantee labor peace through 2016, when he hoped the Summer Olympic Games would be held in Chicago.
Last month, Emanuel put labor on notice that he planned to follow Ferguson’s advice to seize a “generational moment” to tilt the playing field in favor of taxpayers.
“As we negotiate new contracts, I expect … to see savings in wages and benefits, health care and other places,” Emanuel said then. “And I expect them to be a partner in trying to find the savings.”
On Tuesday, Ramirez responded to the mayor’s warning by essentially saying, “Been there. Done that.”
He pointed to the agreement forged in 2015 with the so-called Labor Management Cooperation Committee to wring $20 million in savings out of health care costs.
“We’ve been equal partners in this,” he said.
Ferguson has been highly critical of Daley’s decade-long commitment to pay a prevailing wage to members of the building trades — a wage no other major city pays.
The inspector general has urged Emanuel to shorten future contracts and include a “mandatory mid-term re-opener” triggered by a “fiscal emergency” or whenever the city’s operating revenues drop below a “certain negotiated percentage.”
Ramirez noted both sides could have “opted out” of the deal after five years, but decided against it.
“Both sides just thought, `This is working the way it’s supposed to. So, let’s keep going,’ “ Ramirez said.
“If annual health care increases don’t exceed eight percent, the increase can’t be passed on to our members. It incentivized the city to seek lower costs and the unions to find acceptable efficiencies to keep increases under the threshold.”
Annual health care contributions currently range from $377.04 for single coverage and $663.60 for family coverage for employees earning up to $30,000-a-year to $1,162.80-a-year for singles and $2,228.88 for family coverage for workers paid less than $90,000.
Non-union employees earning more than $120,000 contribute 1.29 percent of their paychecks for single coverage and 2.47 percent for family coverage.
The inspector general urged both sides to consider “reasonable across-the-board increases” or entertain other options. They include: raising rates for the “highest-paid union employees” to match those paid by the highest-paid non-union workers; confining increases to smokers and employees who engage in “similarly unhealthful activities” and creating “tiers of coverage from basic to Cadillac” with “corresponding levels” of contributions.