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So How Does It Wash Out?

You can put away those lightsabers.  The battle is over, the compactor rooms unlocked, the sign up schedules removed, and the doorman back on the job.  It’s back to business as usual.

The ink still isn’t dry on the four year tentative agreement, but at least from the war of the press releases it appears that the Local 32BJ has come out ahead.  Not only did the Union stave off demands by the RAB for givebacks, but also got increases for its members.

Among the items the RAB had demanded were a reduction in sick days from 10 to 5, a contribution to health car costs (10% for current staff members and 18% for new members), and a freeze on wage increases in this recessionary environment.

Under the contract announced early this morning, salaries increase by $15 a week in each of the first two years, $22 a week in the third, and $23 a week in the fourth, by which time the average yearly wage will be $44, 000 – an increase of 10% over the course of the contract according to Local 32BJ. That’s better than the 8.5% pay raise achieved over the life of the last contract negotiated in 2006 when times were flush.

In addition, the agreement retains current sick days, vacation and overtime.  According to the Union, it also increases employer contributions to health care by nearly 20% — or $182 million – and pensions by over 20%.

So what did the RAB get for building owners, which includes both landlords of rental buildings and co-op and condo owners throughout the City?  According to The New York Times, it achieved a commitment to attempt to reduce the cost of providing workers’ health care benefits by 2012.

What does that mean – that’s the real question for which there is not a concrete answer this morning after.  How was the number derived in the first place?  Was that the dollar amount the RAB hoped to achieve in givebacks? Or does it simply reflect the amount in savings necessary to keep the Health Fund Healthy?

Moreover, how will the reduction be realized, and by whom.  According to a bleary-eyed representative of Local 32BJ whom I managed to reach this morning, it is contemplated that a joint committee of Employer/Union Trustees of the Health Fund will attempt to come up with a plan to derive economies of scale that, through as yet unspecified and undetermined means, will realize a total of $70 million in savings by 2012.

He explained that in past contracts similar measures were utilized that aimed to achieve set cost savings goals within a fixed time period and that those goals were met.  For example, as a result of the last contract, higher co-pays for emergency room visits were imposed on employees in an attempt to change behavior and reduce the use of emergency care, which is more costly than regular doctor visits.

Just what costs will be wrung out of the system this time round remains to be seen.

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