The Problem with Arbitrators

The award of a 19% pay raise through an arbitrators ruling for Boston firefighters has caused some real political tumult, with firefighters praising the decision and Mayor Menino and managers throughout the Commonwealth just shaking their heads in disbelief. The arbitrator gave substantial additional contract value to the firefighters for agreeing to random drug testing (about 2.5 percent for that provision). The award exceeds the roughly 14 percent other Boston unions won through bargaining, and puts Mayor Menino in a tough position. The arbitrators ruling will need to be ratified by the Boston City Council. There was ongoing dispute between the parties over the financial impact of the award, with the arbitrator rejecting some of the city’s financial claims. From the arbitrators ruling (Boston Globe):

“I conclude that the city’s proposal to skim the frosting, pocket the cake, and avoid paying the fair, reasonable, and affordable value of the meal is a hound that will not hunt,’’ Eischen wrote. “To hold otherwise would ascribe zero value to a milestone drug and alcohol policy of enormous, lasting, and arguably ‘priceless’ benefit in terms of human lives of firefighters and members of the public saved or rescued.’’

Eischen contended that the package will cost the city $39.4 million in retroactive pay; the city says the award will cost $74 million in back pay and wages going forward.

The figures do not include savings the city will realize under the award for increased employee contributions for health insurance and tighter management control of sick leave.

Mayor Mazzarella of Leominster, a member of the arbitration panel, strongly dissented from the ruling:

Mayor Dean J. Mazzarella of Leominster, the management representative on the three-member arbitration panel, dissented on the economic aspects of the award, calling it “a slap in the face of the citizens of Boston.’’ He urged the Boston City Council, “to conduct an independent review of Arbitrator Eischen’s financial conclusions, because I do not believe they are accurate.’’

Mazzarella reiterated his assertion that Eischen and the third member of the panel — Robert McCarthy, president of the Professional Firefighters of Massachusetts — had approved the additional 2.5 percent pay increase at the 11th hour.

When members of the Legislature suggest (as they have done in the area of health care) that cities accept binding arbitration as a provision of any agreement they seem incredulous when it is rejected out of hand. This decision shows the basis of that rejection. The arbitrator appears to believe that it is business as usual, and that difficult economic times require no sacrifice from the public sector. He could not be more wrong. Municipal finance continues to spiral in an out of control fashion, with numbers like these promoting a movement towards total decimation of municipal services and sound financial footings for cities. Firefighters do an incredibly difficult job, and they should be compensated fairly. But this decision cannot be justified, in my opinion. Read the Globe story here.

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