What's in Chicago's Newest Union Contracts? Lower Wage Increases, Higher Healthcare Costs

The agreements with the Coalition of Unionized Public Employees (COUPE) are the first in a new generation of collective bargaining agreements for the City of Chicago.

This policy article is part of a series on the city's contract negotiations. Learn what city council can do better when the next contract is negotiated here.


 

Chicago’s City Council recently approved the first in a new generation of collective bargaining agreements for the City of Chicago. The agreements with the Coalition of Unionized Public Employees (COUPE) come at a time when all of the city’s collective bargaining agreements (CBAs) have expired. In this environment, the COUPE agreements, covering about 22 percent of the city’s unionized workforce, set the tone for the rest of the city’s negotiations. They also affect five years of city finances. What’s in the COUPE contracts and what we might expect to see in the next labor agreements?

Lower wage increases

Wage increases under the new COUPE agreements average 2.1 percent per year. This is much more in line with current economic realities than prior contracts were. According to a 2017 report by the city’s Inspector General, the average compounded annual increase for COUPE agreements was about 2.9 percent, while local inflation was about 1.2 percent per year. Because the 10-year COUPE contracts were finalized before the recession, these agreements were far out of sync with the city’s finances and economic realities. The change makes average annual compensation increases for COUPE employees lower than those in the recently expired contracts with the Fraternal Order of Police (FOP), Chicago Fire Fighters Union (CFFU), and the American Federation of State, County, and Municipal Employees (AFSCME).

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The changes in wage will have no effect on employees who receive the prevailing wage — the wage that laborers in the private sector get paid. Getting rid of the prevailing wage would have been a win for the city. In addition to being expensive, as Tom Villanova, then president of the Chicago and Cook County Building and Construction Trades Council, recognized in 2007, the prevailing wage is long outdated. Still, prevailing wage became a sticking point in the negotiations for the new contracts.

However, the new agreements do expand the use of “break-in periods,” two years during which new employees are paid a set percentage less than the prevailing rate. This will save the city some money. The COUPE agreements also are the only contracts with the city that have historically included prevailing wage.

Higher employee healthcare contributions

Traditionally, all city unions receive similar basic rates for healthcare. Thus, the changes solidified in the COUPE agreements are likely to be echoed in future negotiations.

Under the new contract, COUPE employees will be getting a .5 percent increase in premiums every year after 2017. This means, for example, that single employees in 2020 on average will pay 2.79 percent of their premium. According to the Kaiser Family Foundation’s 2017 Employer Health Benefits Survey, this still is far lower than the average of 14 percent paid by state and local government employees as a whole. But, the benefits survey does not differentiate between union and non-union agencies. Employees in the Coalition of Los Angeles City Unions, for example, will pay nothing for their premiums until at least June of this year.

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The COUPE agreements also include an increase in salary caps from $90,000 to $130,000 and changes to prescription deductibles. With the new premium rates, a change in the salary cap from $90,000 to $130,000 will save the city an average of $ 623 annually for the highest earning employees. These savings should be amplified by the next round of negotiations as most of the city’s top-earning union employees work in public safety positions.

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The negotiations do not appear to have made much of a dent in traditional work rules that can be costly for the city. For example, the Inspector General's report describes city crews being unnecessarily driven to a worksite by employees who are dedicated solely to driving and who cannot perform any other work. Such rules will remain in effect.

However, according to the material distributed by the city, it has been able to bring in some flexibility for managers, including by extending the probationary period for new employees to a year, introducing a new civil title for drivers, and combining training and assignments for four titles.

What's next?

The city’s collective bargaining agreements cover about 30,874 (full-time equivalent) positions. COUPE agreements cover 6,732 employees, about 22 percent of the unionized workforce.

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Negotiations with the FOP and the CFFU will have the greatest impact on the city. Together, police and fire department employees make up the vast majority of the city’s unionized workforce (38.5 percent and 14.6 percent respectively) and the bulk of its personnel expenses.

The union contracts have expired at a particularly sensitive time for police. New technology has been introduced to the Chicago Police Department, such as body cameras, and expectations for accountability are evolving. For example, Attorney General Lisa Madigan is seeking a court-ordered monitor for the department and organizations like the Coalition for Police Contracts Accountability, of which the BGA is a member, are calling for police accountability to be considered in the negotiations. The FOP’s two prior contracts were fought straight through to arbitration, extending an already sluggish process even further. There is no reason to think that the current contracts negotiations will be different. According to FOP President Kevin Graham, negotiations have yet to start. Thus, the finalization of the FOP contract could likely be pushed past the 2019 election.

What can the public do?

The remainder of the contracts, like the COUPE agreements, will be carried out behind closed doors with little information available to the public. Once the city and union have come to an agreement, the city council must vote it into law.

Unfortunately, the COUPE agreement was pushed through the council in less than a week. In the next round of negotiations, aldermen should take their time, get all the material they can from the city, and seek expert opinion from resources like the Council Office of Financial Analysis before saying ‘yes’ to a contract.

Members of the public can stay engaged in future negotiations by talking to their aldermen or, if you are an employee, talking to your union representative. Make sure those at the table hear your priorities. As the 2019 election approaches, you also can ask that the mayor and your alderman publicly commit to their priorities as they work to finalize contracts that will affect years of city services and expenditures.

About the Author
  • Rachel L. Leven

    Rachel Leven is the BGA’s policy manager focusing on Chicago and Cook County. Before joining the BGA, Leven ran communications for the City of Chicago Office of Inspector General (OIG), a nationally renowned municipal oversight agency.