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October 14. 2013 5:04PM

Contract reality: Is it hitting Manchester unions?

Manchester aldermen are scheduled to vote tonight on a union contract that could have important long-term ramifications for the city. They should accept it and why the Manchester Education Association should observe closely.

Last summer the United Steelworkers Local 8938, which represents city Water Works employees, rejected a fair and necessary contract the city had offered. The union did not like that it raised the members’ health insurance premium contributions from 5 percent to 12.5 percent the next year, then 15 percent the year after. The city’s financial position in relation to health insurance benefits for employees has only deteriorated.
The economy is not significantly improving while insurance costs continue to rise. Two weeks ago the company that manages the city’s health benefits reported to the aldermen that Obamacare already has cost the city $196,800 and will cost taxpayers a whopping $3 million in 2018, when the “Cadillac tax” on generous insurance benefits kicks in.

The new Water Works contract sets employee health premium contributions at 17.5 percent. That is 2 percentage points higher than in the contract rejected last year. But it is 10.5 percentage points lower than the average contribution in the private sector.

This contract is a good deal for the city and the Water Works employees. Why for the employees? Because it keeps their contribution far lower than the national average for two more years. The Manchester Education Association, which keeps rejecting contracts because of premium increases, needs to wake up and see the trend here. The longer city employee unions hold out, the higher their contributions will be.


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