Labor Agreements

Negotiating labor agreements with employees is one of the more important duties of a city manager. Labor costs are the largest single operating expense in a city; annual labor costs are even greater than annual capital costs. If a manager is to keep the budget under control, s/he must keep labor costs in line.

Labor agreements are a lot more than making a decision about wage rates. It is an annual rite which focuses all of the organizational dynamics of the past year and coming year--political and personal, as well as economic. The recent experience of "cutting back," caused by sharp cuts in Federal and State support and aggravated by increasing demand locally for services, is showing up in labor contracts being negotiated now. On management's side, wage increases may be a small price to pay for productivity improvements.

Much of labor negotiations depends on "people skills" and mastery of group process, rather than quantitative analysis. There is, however, an advantage to going into the negotiation process with a clear idea of what you intend to achieve (and a way to evaluate your achievements afterwards) and with a clear idea of the price of the proposals which may be offered. "Price" may not be the main criterion for deciding a labor issue, but it does offer a common measure of the effects of various issues. It also offers a yardstick for gauging the importance of other criteria used for evaluating the merits of various issues.

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1996 A.J.Filipovitch
Revised 11 March 2005