Northeastern Open ClassroomSeptember 22, 2010

1906

Real Average Hourly Earnings, 1964-2005

6

6.5

7

7.5

8

8.5

9

9.5Lyndon B. Johnson

Richard Nixon

Gerald Ford

Jimmy Carter Ronald Reagan

George H. W. Bush Bill Clinton

George W. Bush

Percent of Wealth Controlled by the Top 1% in the United States, 1965-2010

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

1965 1969 1972 1976 1979 1981 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010

Lyndon B. Johnson

Gerald Ford

Ronald Reagan George W. BushRichard Nixon

Jimmy Carter

George H. W. Bush

Bill ClintonBarack Obama

Top 10 2008 Bailout Recipients (excluding Fannie Mae and Freddie Mac)

$61 billion

$48 billion

$45 billion

$45 billion

$25 billion

$10 billion

$10 billion

$11 billion

$16 billion

$25 billion

0 10 20 30 40 50 60

Goldman Sachs

Morgan Stanley

Chrysler

GMAC

JP Morgan

Wells Fargo

BofA

Citi Group

AIG

GM

Bailout Amount (in billions of dollars)

Top 10 2008 Bailout Recipients (excluding Fannie Mae and Freddie Mac)

$61 billion

$48 billion

$45 billion

$45 billion

$25 billion

$10 billion

$10 billion

$11 billion

$16 billion

$25 billion

0 10 20 30 40 50 60

Goldman Sachs

Morgan Stanley

Chrysler

GMAC

JP Morgan

Wells Fargo

BofA

Citi Group

AIG

GM

Bailout Amount (in billions of dollars)

$68.5 million

$41.3 million

Not available

$5 million

$30 million

$12.57 million

$16.04 million

$574,000

$14.3 million

$14.4 million

Union Membership Decline and Total Workforce Increase, 1964-2004

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Nu

mb

er

of

Wo

rke

rs (

in t

ho

us

an

ds

)

TotalWorkforce

TotalUnionm em bers

Union Membership in the USA as a Percentage of the Total Workforce

0

5

10

15

20

25

30

35

Un

ion

Me

mb

ers

hip

(p

erc

en

tag

e)

General Motors Plant

Fremont, California

City of Boston FY11 Proposed Budget ($2.45 billion)

Health Benefits14%

Pensions10%

Debt5%

County0%

State Assessments6%

PHC2%

Equipment Supplies and Other Charges

3%

Contractual Services11%

Personnel Services49%

Employee Compensation

$1.76 billion

71.7%

Health Insurance Costs Have Grown Over $150 Million Through FY10

Boston Globe, 4/20/10

Boston Herald, 4/22/10

Arbitration Panel’s Original Settlement

• 19.2% raise over 5 years; total cost $74 million

• 2.5% raise in exchange for random drug and alcohol testing

• FY2011 would begin with a 2.5% raise, setting the standard for other upcoming union negotiations

Local 718, City Council, and Administration Found Compromise• 17% raise over 5 fiscal years• All new firefighters must take yearly physicals

and pass a fitness test, otherwise no 1.5%• No payment henceforth for drug and alcohol

testing • Over 20 years, the city will save $45 million

from the original settlement • FY2011's increase (2.5%) delayed 6 months,

effectively serving as a 1.25% increase for FY2011

Intangible Benefits• Arbitration is forever different in that an award may change or be

defeated at the Council, something that was previously assumed to be impossible

• For the first time, one of Boston's big three unions (police, fire, teacher) made a significant pay concession outside of the bargaining table

• The biggest benefit is ending four years of bitter conflict between management and labor. This saves the City millions of dollars in lawyer bills and restores morale and productivity

• Shooting down the award would return labor and management to the table resulting in further delay, increased legal costs, a continued toxic relationship, likelihood of going back to arbitration, with no guarantee of a better result

• Or 718 could have litigated the award on the basis that the Menino administration violated their agreement to support the award and abide by the arbitration rules

Northeastern Open ClassroomSeptember 22, 2010