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Rahm Emanuel locks in labor peace with 10,000 building trades workers

Jorge Ramirez, President of the Chicago Federation of Labor, in 2015. File Photo. | Rich Hein/Sun-Times

Mayor Rahm Emanuel has locked in labor peace through the 2019 mayoral election with 10,000 unionized city workers in the building trades by guaranteeing them the “prevailing wage” in exchange for increased employee health care contributions.

Chicago Federation of Labor President Jorge Ramirez refused to reveal the size of the five-year pay raise or specifics of the health care concessions.

He would only say that members of the building trades would continue to be guaranteed the prevailing wage paid to their counterparts in private industry.

“The prevailing wage is important. It reflects what’s going on in the area,” said Ramirez, also chairman of a labor-heavy investor group that purchased the Chicago Sun-Times.

“It doesn’t mean they’re always going to get an increase. What matters is that they’re gonna get what’s going on in the industry surrounding them.”

City Hall said the five-year agreement “builds on” the mayor’s efforts to keep health care costs “relatively flat” and includes “new measures” in the “ongoing collaboration” to make certain that happens.

In addition, a “break-in” rate established five years ago for Water Management laborers will be extended to caulkers. They’ll be hired at 80 percent of the rate for journeyman plumbers, rise to 90 percent during Year Two and stay there until they earn their plumbers license.

The five-year contract still must be ratified by the City Council and by the 31 unions that are part of the Coalition of Unionized Public Employees (COUPE).

The group includes Teamster Local 700, whose 2,032 members drive city snow plows and garbage trucks and called off their scheduled strike vote on Sunday.

Teamster pay raises for those not covered by the prevailing wage were pegged at roughly two percent in each of the next five years while health care contributions rise by five percent over the next three years.

The city has also agreed to make permanent full-time positions 525 jobs previously deemed seasonal.

Inspector General Joe Ferguson was out of the country and unavailable for comment about the new five-year agreement.

Ferguson has urged Emanuel to seize a “generational moment” for taxpayers — by abolishing work rules that tie the city’s hands and ending Chicago’s decade-long commitment to pay members of the building trades a prevailing wage paid by the private industry that no other major city pays.

Former Mayor Richard M. Daley’s costly 2007 agreement was tailor-made to guarantee labor peace through a 2016 Summer Olympic Games that ultimately went to Rio de Janeiro.

“This tradition is extremely costly because it pays city trades people for a full work-week at the highest rate paid to similar trades people in private practice,” Ferguson wrote last spring.

“Because public sector tradesmen, even those paid by the hour, receive a guaranteed annual income, it is arguably unnecessary to treat them the same as their private sector counterparts who generally lack such income security for the purpose of setting hourly wages. … The parties should consider making all wages and salaries subject to predetermined scheduled increases.”

At the time, Ferguson urged Emanuel to shorten future contracts and consider including a “mandatory mid-term re-opener” that would be triggered in the event of a “fiscal emergency” or whenever the city’s operating revenues drop below a “certain negotiated percentage.”

The inspector general also urged the city to pull back from non-prevailing wage employees in the building trades who got 29.3 percent pay raises over the ten-year period, nearly triple the 11.8 percent increase in the consumer price index during that period.

Ramirez has accused Ferguson of painting a distorted picture of the ten-year contract and its prevailing wage provisions.

“The rates are the same. But, what he doesn’t get into is that the benefits are not the same. It’s significantly less than the city pays for health insurance, pensions and so forth than the guys on the outside,” Ramirez said on the day the inspector general released his report.

Ramirez has also argued that the 10-year agreement “benefited the city tremendously,” with “millions upon millions of dollars saved on health care.”

Ferguson recommended that the city and union leaders consider “reasonable across-the-board increases” in health care contributions 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.

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.

Contributing: Dan Mihalopoulos