A little over a month has passed since Rahm Emanuel took over as the mayor of Chicago, but he already has his hands full with local labor unions.
The former Chief of Staff to Barack Obama faces a midnight Thursday deadline to settle a budget shortfall involving the city’s unionized employees. The cut-off date comes just weeks after Emanuel’s personally appointed Chicago School Board rankled the local teacher’s union with a number of concessions. And with a mandate on cutting costs, Emanuel’s upcoming labor negotiations may be an early indicator of either a fractious or cordial relationship with local labor leaders in the future.
Early signs indicate that Emanuel is seeking union concessions to address the budget crisis in a cash-strapped city. The mayor met with labor leaders on Tuesday to find ways to plug a $30 million budget gap for the second half of the year. Unionized city workers made concessions with Mayor Daley by taking furlough days to avoid layoffs. But Emanuel said he won’t rely on those terms because they are bad for morale and wouldn’t save as much as hoped.
But in turn, he has to work with the union to find ways to narrow the deficit before the contract expires this week. And he hasn’t ruled out layoffs, although both sides would prefer to avoid it.
On Wednesday, Emanuel said 625 city workers will be laid off if unions don’t agree to work-rule changes, the Chicago Tribune reported. The proposal would save $20 million. Labor leaders will need to come up with their own proposal, which may take up to two weeks. Chicago Labor Federation president Jorge Ramirez met with Emanuel on Tuesday. Earlier reports said that fewer work hours, reduced overtime pay and further privatizing of city businesses were among the discussions, according to a local alderman.
The talks stem from Emanuel’s plans to trim $75 million from the current budget and find ways to narrow next year’s deficit that is estimated to be between $500 million and $700 million. But much of those cuts are seemingly aimed at unions, something labor groups were wary of during the mayoral race.
Emanuel received scant political support from local labor groups. There was already the infamous “F‑Bomb” gaffe aimed at the United Auto Workers revealed in a book last year. Shortly before his campaign announcement, an SEIU official told the Chicago News Cooperative that Emanuel would favor businesses over unions and the union did not make any mayoral endorsements. The Chicago Federation of Labor and the Chicago Teacher’s Union did not endorse any mayoral candidates either, and the latter wrote on their website at the time that Emanuel is “out of touch and directly opposes the CTU’s official positions.”
Soon after the election, Emanuel fired his opening salvo by warning teachers that change was coming. And since then, the teacher’s union has already faced cutbacks in jobs, wages and labor rights. This week, the Chicago Public Schools announced layoffs of 1,000 teachers. An education reform bill passed by the state earlier this month makes it more difficult for teachers to strike; Emanuel supported curtailing that right during his election. A few weeks ago, the Chicago School Board denied teachers a 4‑percent pay raise worth $100 million, which was to trim the school budget. Emanuel said students “got the shaft” from the pay raises that were obligated under the current contract.
The union was angered even more after the same board approved pay raises for school system executives, who earn six-figure salaries. Several of Emanuel’s top administration officials are also reportedly receiving salaries higher than what officials in the same position earned under Mayor Daley.
Unions don’t appear to be happy with the prospect of submitting to concessions while city executives receive raises. The CTU already plans a rally next week. And tensions have already risen even before teachers and Emanuel will meet in June 2012 when the current collective bargaining deal expires.
Meanwhile, Emanuel has found other ways to add jobs via corporations including GE Capital, United-Continental and Allscripts. But there are still more budget cuts planned, including the possibility of reduced pension benefits, and maybe even lay-offs. It remains to be seen whether Emanuel and unions can work together for the long haul, but so far they’re not off to a good start.