1. A New “Grand Bargain” for Public Sector Workers
Boston Bar Association
Harvard University Law School
May 2, 2009
Barry Bluestone
Dean, School of Social Science, Urban Affairs, and Public Policy

2. Massachusetts State & Local Government in Trouble
Facing a continuing budget crisis

3. Mass FY2009 Revenue
Through April 9, 2009, year-over-year total state tax revenues are down $1.1 billion (-7.4%) over 2008 revenues
FY 2009 Massachusetts deficit will total close to $3.5 billion relative to original state budget
FY2010 deficit is projected now to be close to $4 billion
Draconian cuts in state services
Large cuts in local aid

4. But current deficits are only the tip of the iceberg
The cost of state government services is spiraling out of control
Given the rising cost of debt service, public employee pensions, and Medicaid, the Commonwealth is facing a massive long-term “Structural Deficit” that will destroy public services

5. Price of State & Local Services rising
twice as fast as overall prices

6. Debt Service, Public Pensions, and Medicaid
will devour most of the Mass State Budget

7. Why are Public Sector Workers in Massachusetts in Trouble
State and local governments will need to find a way to reduce costs by reining in public services, privatizing them, or raising public service productivity and efficiency

8. New Collective Bargaining Environment
Municipal officials have no choice but to demand relief from public service workers or cities and towns will go bankrupt
As the public begins to recognize how well public sector workers are doing relative to other workers, and how bad the national and state economies are doing, they will increasingly side with municipal officials and against public sector unions
Some may cheer the demise of public sector unions, but unions have played a critical role in the past in driving social progress

9. Union Efforts have … Raised wages of low wage workers
Given workers a voice in their own fate
Most importantly, been a force for social progress on health care, combating poverty, raising productivity, insuring product quality
Their demise is not good for society

10. Trends in Union Membership

11. 1955: 35%
2008: 13.7%

14. Lessons from the UAW
UAW was not long ago the strongest union in the U.S. with over 1.5 million members
Union failed to recognize changes in international auto industry, failed to push for improvements in auto quality and performance, and improvement in industry productivity
Today, the UAW has less than one-third as many members (465,000) and the domestic auto industry is holding on by a thread with massive worker layoffs

15. Lessons for Public Sector Unions
Public sector unions must make a better case to consumers … those who pay the taxes for services
Public sector unions must help find ways to improve productivity and reduce the costs of public services
It is time for a “grand new bargain” where unions play a greater role in improving “price”, quality, and innovation in return for greater job security and public respect

16. Goals of New Grand Bargain
Union joins in efforts to boost …
Productivity/Efficiency
Quality of Services
Innovation in Offering Services
Union to be a partner in serving the needs of the Commonwealth
Union plays a serious role in helping shape social policy … balancing the interests of their members with the interests of the public
Increased Union Membership

17. A New Grand Bargain Reductions in Work Rules and Job Classifications
Public Sector Pension Reform
Universal buy-in on Group Health Insurance
Advocate for School Reform
Wage Freeze during times of grave economic crisis
Keep public services public