By Jim Cline and Kate Kremer
This is the third part of our 2021 wage series. In this article, we take a look at recent contract settlements and examine how those trends vary from recent previous years. Our view of 2019 and 2020 settlements and what we have so far from 2021 indicates that the Washington State public sector wages dropped in 2021 but not as substantially as employers might suggest. We see some wage increases with little substantial “real wage” growth (as measured once controlled for inflation). Whether a growing economy eventually will accelerate these is something we’ll discuss later in this series.
In this article, we will provide you an overview and summary of settlements. But for the details of those settlements, you will want to explore our Premium Website. If you are not currently a Premium Website subscriber, you can review our services, Cline and Associates Premium Information Services and contact Carly Alcombrack at Cline and Associates and she will explain how you can become one: CAlcombrack@clinelawfirm.com. For current premium subscribers below are links to some of the additional available Settlement Trend reports:
Statewide Settlement Trends 2019-2021
Both mean and median numbers are reported, and each has its own significance. Median settlements may be a better indicator of the overall trend as the mean number is sometimes distorted by the occasional particularly high settlement or a large number of 0% settlements. “Median” reflects the “midpoint” of the list. “Mean” represents the mathematical average.
To give some context to the most recent trends, we take a short look back at the settlement trends over the past two years. This provides us a point of contrast and allows us to evaluate the extent to which the pandemic or other factors have impacted overall settlements.
For 2019, city police, firefighters, and somewhat surprisingly, dispatchers, all fared well. Records personnel averaged close to 3% It was notably the county law enforcement and corrections personnel that lagged in overall 2019 settlements. Note that there is a variance between the “median” and the “mean” numbers.
2019 Washington Law Enforcement and Fire Wage Settlements Averages and Medians
The 2020 table below is also fairly complete with 85-100% of the labor contracts settled and reflected in this data. The 2020 numbers reflect a robust settlement trend, likely the result of the combined effect of a robust economy and a tight labor market.
In those 2020 settlements, we see the average wage settlements substantially over 3% and in the case of the non-interest arbitration Corrections Officers – over 4%. Interest arbitration-eligible Corrections Officers had the lowest “mean” increases during 2020, just under 3%. All the other classifications were north of 3%. The variance between corrections officer bargaining units based on arbitration eligibility is a curious outcome, probably reflecting market pressures forcing employers to raise salaries. The trends for dispatchers to score significant increases also reflects labor market pressures.
2020 Washington Law Enforcement and Fire Wage Settlements Averages and Medians
What happens in 2021 as the economy and the rate of inflation slowed? The following 2021 table is an indicator with 50-68% of the labor agreements settled. 2021 settlements are lower than the two preceding years, generally, between 2 and 3%. The lower 2021 trend was not unexpected, separate, and apart from the impact of the pandemic, since the CPI was lower heading into 2021 negotiations. It should be noted this trend incorporates a number of contracts tied their wages directly to CPI and in particular to the Seattle June CPI which had its lowest percentage increase for 2020 in June (0.9% Seattle June CPI-U and 1% Seattle June CPI-W).
Clearly the overall trend in 2021 was lower than the two preceding years. These settlements for 2021 show Deputy Sheriffs and Police Officers doing slightly better than the other classifications, with settlements over 2.75%.
Firefighters work 24 or sometimes 12 hour shifts and substantially more than 2080 hours (about 3 months) annually. For this reason, we calculate provides Firefighter wages on a “net hourly” basis. Holiday and vacation leave hours are subtracted from annual hours and these are divided by the annual work hours for the net hourly wage. For this reason, if the work schedule and annual hours of work are modified the hourly wage is impacted. Firefighters have settlements below 2.5% or 2021, substantially down from the 2019 and 2020 trends.
This chart shows the 2021 settlements by public safety occupation:
2021 Washington Law Enforcement and Fire Wage Settlements Averages and Medians
When the average and median numbers are close this indicates broadly distributed wage settlements with few high or low anomalies. With the exception of Records Clerks, this is the case for settlements in 2021. Police and Fire have just below 3% medians and Records and Non-IA Corrections Officers have settlements on the lower end for 2021.
In the next article in this series, we will do an even deeper dive into the data. The important question we will address in that article is the extent and nature of any COVID economic impacts on contract settlements.
