By Joel P. Engardio
While city voters yawned through this month’s low turnout election, Supervisor Mark Farrell managed to do something unthinkable in San Francisco: He got a proposition approved with the support of both the Republican Party and those on the firebrand left.
Prop A didn’t ask if the sun rises in the East or if Oreo cookies are delicious. But it posed an equally easy question: Should we close a loophole that allows politicians to raid the city’s retiree health care trust fund for any purpose?
Farrell’s initiative won big with nearly 70 percent of the vote. Prop A was also backed by every labor union, except one: Service Employees International Union Local 1021.
SEIU 1021 represents 14,000 city workers including janitors, clerks and nurses. Their opposition was puzzling because Prop A didn’t ask employees to pay more for health care, which was a key reason all the other unions backed it.
“We’ve always been a maverick union,” said SEIU 1021 Vice President Larry Bradshaw. “We didn’t have the appetite to support Prop A because we don’t feel City Hall wants to partner with us in the real fight for lower health care costs – going after the insurance companies.”
It didn’t matter that Farrell recently hosted a hearing to investigate transparency in health care pricing. SEIU 1021 doesn’t trust that Farrell or City Hall will go far enough.
Plus, union members haven’t forgiven City Hall for making them pay for part of their retirement health care. Some of the lowest paid city employees belong to SEIU 1021 and members say their contribution is an unfair burden when other unions have higher wages.
Farrell said he got an earful recently when a union activist followed him across a parking lot, screaming at him every step of the way.
“There’s a general suspicion among our members that Mark Farrell has a pro-business and anti-labor agenda,” Bradshaw said. “I’ve been pleasantly surprised by the ability to work with him, but we’re a membership of 14,000 different opinions and majority rules.”
Compared to what many private sector workers pay for health care, city employees seem to have a bargain - even after being asked to pay 1 or 2 percent of their wages into a trust fund for retirement health care. Some Americans will have to pay up to 9.5 percent of their income for health insurance under the Affordable Care Act. That’s a number SEIU 1021 would have reason to scream about.
And yet, current contribution levels won’t cover San Francisco’s $4.4-billion retiree health care shortfall if City Hall doesn’t get an average return of 7.5 percent on its investments over the next 30 years. Economists warn a 5.7 percent return is more likely.
The most fiscally responsible solution – a realistic rate of return combined with higher employee contributions - isn’t politically feasible. But Farrell has worked closely with unions to find an agreeable starting point. San Francisco is one of the only major U.S. cities to deal with both health care and pension reform in a concrete way, and Farrell deserves some credit for that.
“My goal from the beginning was to build a consensus,” Farrell said. “I believe in finding solutions that bring both our business and labor communities together.”
Any hope he had to win over SEIU 1021 activists vanished when they posted a YouTube video calling Farrell a “venture capitalist” who is “pathetic” and makes “BS” deals with unions while “talking crack behind their back.”
The rhetoric surprised Farrell’s family.
“I grew up in a labor household,” Farrell said. “Both my parents were labor union members.”
SEIU 1021 proved its influence during the recent BART strike by winning what the union says is a better contract for its maintenance workers, though the deal hit some last-minute snags last week. Will San Francisco’s largest labor union push City Hall even harder when the contracts for its city employees are up for negotiation next year?
“We’re going into bargaining very motivated,” Bradshaw said.
Many unions are cooperating with Farrell because they know a fiscally sound city is in everyone’s best interest. A willingness to take the first steps toward solvency is important when difficult and complex issues remain to be solved.
Let’s hope SEIU 1021 will join its union brethren and not take San Francisco backward.