Post on 21-Dec-2015
FMCS IMPACT 2006-2007
Pittsburgh Field Office 2
Federal Mediation & Conciliation Service
Impact onLabor-Management Relations
2006 / 2007
FMCS IMPACT 2006-2007
Pittsburgh Field Office 3
F.M.C.S. Creation
Independent agency under Taft-Hartley amendments in 1947.
Resolve collective bargaining disputes which threaten the free flow of commerce.
Neither a regulatory nor an enforcement agency, but a neutral designed to assist Labor & Management.
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F.M.C.S. Mission
Promote sound & stable L/M relations. Prevent/minimize work stoppages through
mediation assistance to parties. Advocate collective bargaining, mediation
& voluntary arbitration. Develop the art, science & practice of
conflict resolution. Foster constructive joint L/M processes.
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F.M.C.S. Services
Collective Bargaining Mediation Private, Public, & Federal
Sectors
Relationship Development & Training Customized training
Education, Outreach & Advocacy Of collective bargaining
processes
Alternative Dispute Resolution In-lieu of litigation
Arbitration Services
International Program
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FMCS Impact on U.S. Economy FMCS mediation in CBM
disputes saved U.S. workers & businesses $9 billion from 1999-2004 by averting work stoppages
Reduced number of impacted workers by 43.2% (~4.3 million vs. 2.4 million)
Prevented 1,265 work stoppages between 1999-2004.
(Source: EPF 2005 Study)
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Collective Bargaining Mediation
2006 U.S. Statistics
23,002 Intake cases 4,486 closed (active) 86% closed/agrmt.
1,632 grievance mediation cases
266 work stoppages (all size B.U.’s)
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Work Stoppages(U.S.)
(all size bargaining units)
0
50
100
150
200
250
300
350
400
450
1995 1997 1999 2001 2003 2005
NumberAvg. days
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Work Stoppage Trends
Note: Preliminary data from FMCS-commissioned study
100
600
1,100
1,600
2,100
2,600
3,100
3,600
Year
Nu
mb
er o
f W
ork
Sto
pp
ages
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Hot Topics at the Table
Job Security Subcontracting Off-shore job losses Technology
Staffing issues Healthcare industry “Foreign” nurse recruiting Construction building trades
Mandatory O/T State legislation
Pension Benefits Defined benefits vs. defined
contributions Two-tier systems “Freezing Plans” (IBM, HP,
Verizon, Alcoa, Motorola)
Health Insurance Active employees & retirees Plan costs & design Co-pays & cost sharing “Fair Share Health Care”
legislation introduced in 31 states
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JOB SECURITY CONCERNS Continuing decline of
manufacturing sector jobs (GM, Ford)
Bankruptcy escalation
Off-shore job losses mounting
Lower wages overseas attractive to bottom line
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Pittsburgh Field Office 13
Job Security Issues at the Bargaining Table
Competition and cost-cutting are driving the following issues:
Technology Adoption (Jobs lost to automation)
Outsourcing (Jobs contracted out)
Globalization (Jobs move overseas)
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Technology
For whom the work gets done
Who assesses the work
How the work gets done
Nature of the work being done
ChangesChanges
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Globalization
Goods can be produced anywhere in the world… sometimes for less money.
To compete, employers need to find ways to control their costs.
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WHY STAFFING IN HEALTHCARE INDUSTRY ?
Source: Employment Policy Foundation 2005
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SOME UNDERLYING CAUSESOF NURSING SHORTAGE
Hospital Acuity “Specialty” demand
continues to rise
Insufficient number of faculty in nursing programs to accommodate enrollment demands
Low retention rates for younger workers
Aging workforce Within 10 years, 40%
of RN’s will be 50 years old or older
½ of working RN’s will reach retirement age in next 15 years
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WHY STAFFING IN CONSTRUCTION / BUILDING TRADES?
Source: Employment Policy Foundation 2005
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A Mounting Labor Shortage The NAHB reported in the Builders’
Economic Council Survey in May 2006 that, “every sector of the construction industry is experiencing some labor shortage. The numbers are highest in the need for finished and rough carpenters.”
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A Mounting Labor Shortage According to the Home Builders
Institute, the industry employed 6.7 million workers in 2001 and an additional 1.5 million are needed by 2010 just to sustain productivity.
According to the National Center for
Construction Education and Research (NCCER), the average age of craft workers is 47.
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Pension QUICK FACTSQUICK FACTS
Source: BNA 2/2006
90% of CBA’s provide some form of pension and retirement benefits
62% of unionized mfg. & 67% of unionized non-mfg. employers offer traditional defined benefit plan
62% of unionized employers offer tax-deferred retirement savings plan (e.g., 401K)
12% of unionized employers offer a cash balance plan
38% of all union employers offer defined contribution plans
32% of employers will consider pension increases in 2006
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Pension QUICK FACTSQUICK FACTS
Source: * Wilshire Associates
Pension plans of companies in the S&P 500 were 92% funded; and in State Retirement plans 81% funded as of 12/31/04. *
Some States with pension fund deficits have attempted to switch from defined benefit plans to defined contribution plans with mixed results:
1. Alaska
2. California
3. West Virginia
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The Long Term Threats to Pensions
Source: Bradley Belt, executive director the Pension Benefit Guarantee Corporation, remarks to Federal Reserve Bank of Chicago's Bank Structure and Competition Conference, May 10. 2005
Flawed Funding Rules
Flawed Funding Rules
Underfunding Underfunding
Shift to PBGC Shift to PBGC
PBGC DeficitPBGC Deficit
ERISA doesn’t guarantee safe funding
levels by plan sponsors. E.G: UAL, in
compliance with ERISA, but under-funded
by $10 billion
Level of under-funding in insured single
employer plans is about $450 billionFinancially weak plan sponsors shift
unfunded pension costs to PBGC
PBGC carried a $23.5 billio
n deficit at
the end of 2005
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PENSION PLAN DEBATE
Fiduciary litigation
Plan investment returns below expectations
Bankruptcies (Steel, airlines, glass)
PBGC liquidity ($23.5 billion deficit)
Pension Plan “freezes” and “terminations”
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Health Care Costs and Labor Strife
In 2005, health care costs were a strike issue in 66% of work
stoppages
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The Classic Debate at the Table
Who’s covered?
What’s it going to look like?
Who’s going to pay for it?
How much are you going to pay?
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The current system involves health expenditures that constitute over 15 percent of Gross Domestic Product
(GDP)
$3,358B
$2,387B
$1,674B
$1,150B
18.4%16.7%
15.3%13.1%
1998 2003* 2008* 2013*
Projected National Health Expenditures and Percent of GDP
Source: Centers for Medicaid and Medicare Services, 2003
* Estimated
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Rising Health Care Costs: A National Pain
Cumulative weight of premium increases since 2000 = 87% Cumulative inflation rate since 2000 = 18% Cumulative wage growth rate since 2000 = 20%
Source: Kaiser Family Foundation survey 2006
• In 2000 - Total Annual Premium Family Coverage = $6,438/yr.
• In 2006 - Total Annual Premium Family Coverage = $11,480/yr.
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Rising Health Insurance Premium IncreasesRising Health Insurance Premium Increases
Continue to Outpace Earnings and InflationContinue to Outpace Earnings and Inflation
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Labor Perspective –Union vs. Nonunion
Average Monthly Employee Contribution
Union employees contribute less, on average, to health insurance premiums than nonunion employees
Source: BLS National Compensation Survey, 2005
Single Coverage
$70.80
$55.71
Nonunion Union
Family Coverage
$282.98
$198.19
Nonunion Union
21% lower 30% lower
Average percent of premium contribution required:
19% 10% 32% 16%
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Relationship Development & Training
2006 U.S. Statistics
Active in 2,445 joint training/process cases
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Alternative DisputeResolution
2006 U.S. Statistics
1,269 assigned cases
Federal agency ADR contracts, public sector and private sector employment mediations
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A.D.R. Growth(U.S.)
0
200
400
600
800
1000
1200
1400
1600
1995 1997 1999 2001 2003 2005
Cases
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Common reasons for not reaching agreement
Ineffective communications
Inaccurate info./data
Personalities / emotion
Morals differ
Internal/external political pressure
Un-realistic expectations (economic, status, etc.)
Perception of “Fair”
Pride
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Why mediation can be an effective tool for conflict resolution
Parties retain control of resolution Voluntary (in most cases) Informal vs. formal process Time efficient Cost effective
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Estimated Direct Financial Impact of Work Stoppages by Year
Source: Employment Policy Foundation 2005
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Early FMCS Intervention is Key to ReducingWork Stoppage Duration
Source: Employment Policy Foundation 2005
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When mediation may not be appropriate
Pre-determined, inflexible positions
When a “directed” decision is sought
“Principals”
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Federal Mediation & Conciliation Service
Robert S. DitilloCommissioner
One Oxford Centre, Suite 2570301 Grant Street
Pittsburgh, PA 15219412-644-4110
rditillo@fmcs.gov