Chicago Mayor Rahm Emanuel sent pink slips to up to 625 city employees last week and he plans to privatize many of those jobs in order to close Illinois' $30 million budget gap, the Chicago Tribune reported.
Nearly 130 seasonal transportation workers will be told to leave immediately.
According to the Tribune, “Emanuel said he intends to get private companies to clean the city's airports and libraries, work now done by city employees. Operators at the city's water-bill call center and employee benefit managers also will see their jobs outsourced. Those union workers will receive 30- and 45-day layoff notices.”
Emanuel followed through on his threat to lay employees off because, he said, the unions had failed to offer concessions or cost-cutting measures that would help close a budget hole created by an earlier deal with City Hall for unions to take unpaid days off.
Could it be that Rahm Emanuel is cleaning house? Is he really removing public sector jobs and privatizing them?
The Tribune quotes Emanuel as saying, "It has been two weeks and despite ongoing talks between leaders of organized labor and my administration, none of the changes yet have been embraced or agreed upon."
"My duty as mayor is to protect our city's taxpayers ... not to protect the city's payroll."
Union leaders said Emanuel never set a hard deadline for them to present their money-saving ideas and, according to the Tribune, "did not make serious attempts to negotiate."
But should this come as a surprise? If anyone knows about the stubborn obtuseness of union leaders, and their propensity to not concede on monetary issues, Emanuel would. Perhaps the mayor figured that a preemptive strike would be far more effective than spending hours sitting around a table.
"Mayor Emanuel's decision to lay off these workers and privatize services without really engaging in the process is both perplexing and disappointing to all of us," said Jorge Ramirez, president of the Chicago Federation of Labor, in the Tribune article.
"When there's a fire, you don't pour gasoline on it. You pour water on it."
Henry Bayer, the executive director of the American Federation of State, referred to Emanuel's approach as "scattershot."
"If the mayor were serious about attempting to change any work rule, he would have taken the appropriate measures to engage in such discussions," Bayer said in a statement.
"The fact that he has never done so is clear evidence that his attempt to blame union work rules for the city's massive deficit is mere public relations gimmickry," said the Tribune article.
With Emanuel reigning in the unions, Chicago will no longer be responsible for custodial services at libraries or airports. Additionally, according to the Tribune, "managing benefits and staffing the water billing call center will no longer be the city’s responsibility. 75 percent of the seasonal work force at the Department of Transportation will be dismissed as well."
Labor leaders are still expected to sit down with Emanuel's administration later this week. Those talks will likely be geared toward cost-savings in the 2012 budget, which is expected to be short $650 million or more.
Therefore, Emanuel has proposed additional solutions:
1) Salaried employees receive the same number of sick days and holidays as hourly employees
2) Workers doing the same job would get the same pay, no matter which union they belong to
3) The city would eliminate rate differences for driving different vehicles and operating different equipment.
"Emanuel inherited the $30 million budget shortfall from former Mayor Richard Daley, who balanced his final budget by including savings the city would have seen if unpaid days off continued through the end of the year. But Daley did not negotiate an extension of the furlough program with the unions before handing the reins to Emanuel," reports the Tribune.
Emanuel rejected unpaid days off as a solution, saying they hurt employee morale and fail to deliver the anticipated savings.
Adding more pressure to the unions, Emanuel announced last week that he had salvaged $20 million of the $30 million in savings by not filling up to 200 vacant jobs and by turning a city-run community health clinic system into a partnership with a federal health care program.
Turning over city-run programs to the feds? Uh-oh.
"The layoffs will save an estimated $10 million to $12 million for the rest of the year," Emanuel said in a report from the Chicago Tribune.
Labor leaders are still prepared to negotiate in good faith and share Emanuel's sense of urgency, Ramirez said. The layoff move, however, "complicates things."
Emanuel also said he remains open to partnering with labor and will continue to look for "better, smarter, more efficient and cost effective" ways to deliver city services.
There are two possible conclusions to this story. Either Rahm Emanuel, like the rest of America, has realized that in order to control state budgets, the unions must be brought under control.
The second possibility is that Emanuel, in his typical strong-armed way, has decided that the unions need to be reminded of who’s really in charge. Laying off 625+ union workers seems like an awfully good way of driving this point home.
Which conclusion seems most likely?