States and unions struggle over public labor’s future

Gov. Dannel P. Malloy’s call for labor concessions puts him on a growing list of Democratic governors and mayors who are demanding a permanent, new relationship with the organized labor allies who helped elect them.

Jerry Brown in California, Andrew Cuomo in New York, Deval Patrick in Massachusetts and Malloy in Connecticut are making the case that present levels of public-sector compensation no longer can be sustained.

It’s a trend that Barry Bluestone, a Northeastern University economist and longtime friend of labor, says has brought public employees to a watershed moment in politics and labor relations.

“This is not the right, this is progressive liberals on the left,” Bluestone said of Malloy and the other governors. “I think that’s starting to have an effect on many of these unions of saying, ‘Well, we’ve to figure out a new way of doing our business.’ “

To Bluestone, that new way of doing business must mean re-examining benefits and shedding most work-place rules and job classifications that hamper governors and mayors from cutting costs.

He is an unlikely advocate for the proposition that unions should surrender hard-bargained work rules and benefits to avoid a public backlash and the abandonment by political allies.

Bluestone, 66, is the son of Irving Bluestone, a key lieutenant to Walter Reuther, the founder of the United Auto Workers, whose contracts set the pace for broad swaths of the workforce, helping to grow the middle class.

He still sees unions as an important force for social and economic justice.

But Bluestone, who worked in a Ford parts plant as a college student in Michigan, said the decline of the UAW from 1.5 million members in the early 1960s to fewer than 465,000 today is a cautionary lesson for public-sector unions.

In July 2009, he wrote a commentary for the Boston Globe that posed a provocative question, “A future for public unions?”

Bluestone reported that between 2000 and 2008, the price of state and local public services increased by 41 percent nationally compared with 27 percent in private services.

Faced with their own stagnant wages and the threat of job losses, private-sector workers have become more insistent on a leaner, more productive public-sector workforce, Bluestone said.

“Union leaders may think that by working diligently to elect friendly public officials, they can fend off the day of reckoning,” he wrote in The Globe. “But that day is fast approaching.”

Bluestone said he was moved to write the piece after seeing Democratic labor allies such as Boston Mayor Thomas Menino break with unions over issues like experimental charter schools, which tend to be non-union.

Then the economic crisis hit, exacerbating the pressure on state and local governments that had been building over the cost of long-term obligations, such as debt, pensions and retiree health liabilities.

“I just saw all of this leading to a point where the unions really would be taking a lot of hits, not just from conservatives, but from liberals,” Bluestone said. “I was basically saying, ‘Guys wake up. This is coming down the pike.’ “

The reaction of his friends in labor was surprisingly positive, he said.

“I had some of my friends in the labor movement who castigated me for playing into the hands of the right wing and just giving them more ammunition,” Bluestone said. “In fact, that was not the general reaction.”

He has become a sought-after speaker on the subject of challenges to public-sector unions. Last week, he participated in a three-day retreat attended by Massachusetts officials, including the governor, and CEOs, foundation heads and union presidents.

“There was a really lively discussion about what are some of the things the unions can do, and how can we create this new labor-management environment that will be good for teachers and other public employees, but also good for the commonwealth,” Bluestone said.

On Monday, he addressed an economic conference in Hartford sponsored by the Partnership for Strong Communities.

Bluestone, who taught at Boston College while Malloy was a B.C. undergraduate, sees Malloy as the latest in a long line of progressive Democrats on a collision course with labor.

On Thursday, Malloy described the current compensation levels of state-employee as unsustainable and said that labor concessions would be part of his plan to erase a structural deficit of $3.7 billion.

Bluestone’s message is neither being embraced, nor rejected by Connecticut labor leaders.

Larry Dorman, an AFSCME employee and a spokesman for the State Employees Bargaining Agent Coalition, and Connecticut AFL-CIO president John Olsen, each said that public-sector employees are not responsible for the state’s fiscal crisis.

“We’re in an economic crisis caused by Wall Street and corporate America. It was exacerbated by Bush tax cuts,” Dorman said.

He agrees with Bluestone about the danger faced by public employee unions losing the battle for public opinion. And labor already is engaged in a high-profile fight with New Haven Mayor John Destefano, who was supported by labor the 2006 campaign for governor, over pensions.

“There is blood in the water,” he said. “Of course, we are concerned.”

But he is unwilling to concede that the biggest political danger to unions lays with its erstwhile Democratic allies.

“It is in the end being driven by right wing ideologues and corporate America,” Dorman said. “That is the pressure point.”

State employees expected to negotiate with Malloy, just as they did with Gov. M. Jodi Rell two years ago, when they gave back $600 million in benefits and allowed the state to defer a $300 million pension contribution.

Olsen said he rejected the idea that public-sector employees must give up on pensions and good health coverage, just because corporations have succeeded in taking away those benefits from their employees.

“It’s sad. Because I lost my legs, I want to cut your legs off?” Olsen asked. “That’s pretty much where we are. I believe everybody should have a pension, everybody should have health coverage.”

As for more flexible work rules?

“You always need to sit down in good faith and bargain,” Olsen said. “You’re always looking at what’s being put on the table.”