Illinois State Workers, Highest Paid in Nation, Demand 11.5 to 29% Hikes

by Mish

Yet, despite the fact that Illinois is for all practical purposes insolvent, the AFSCME union demands four-year raises ranging from 11.5 to 29 percent, overtime after 37.5 hours of work per week, five weeks of vacation and enhanced health care coverage.

This is a guest post from Ted Dabrowski at the Illinois Policy Institute, of which I am a senior fellow.

For years, Illinois taxpayers haven’t been represented at the bargaining table between Illinois’ largest government union and the state. Illinois’ former governors cared more about appeasing the American Federation of State, County and Municipal Employees than protecting the taxpayers the governors were supposed to represent. That’s how AFSCME workers have become some the highest-compensated state workers in the nation.

Now the union is working overtime to remove Gov. Bruce Rauner – who actually represents taxpayers’ interests – from labor contract negotiations. The union supports House Bill 580, which would strip the governor of his ability to negotiate. AFSCME wants the current contract dealings turned over to unelected arbitrators who are likelier to decide in the union’s favor.

AFSCME wants to remove the governor from contract negotiations because union officials know Rauner will not agree to outrageous demands. Union leaders are demanding $3 billion in additional salary and benefits for union members in a new contract. They’re seeking four-year raises ranging from 11.5 to 29 percent, overtime after 37.5 hours of work per week, five weeks of vacation and enhanced health care coverage. Those additional demands would come on top of the costly benefits that AFSCME workers already receive.

Here are four facts about state-worker compensation the union doesn’t want taxpayers to know:

1. Illinois state workers are the highest-paid state workers in the country

Illinois state workers are the highest-paid state workers in the country when adjusted for cost of living. Illinois pays its state workers more than $59,000 a year, far more than its neighbors and nearly $10,000 more than the national average.

Moreover, state AFSCME workers have received salary increases not matched in Illinois’ private sector.

Median AFSCME worker salaries increased more than 40 percent from 2005 to 2014, reaching more than $62,800. During that same period, median private-sector earnings in Illinois remained virtually flat.

1. AFSCME workers receive Cadillac health care benefits

In addition to paying state workers the highest salaries in the nation, Illinois taxpayers also subsidize a majority of AFSCME workers’ Cadillac health care benefits.

The average AFSCME worker receives the ObamaCare equivalent of platinum-level benefits, but only pays the equivalent of bronze-level insurance premiums. That forces a vast share of AFSCME workers’ health care costs onto state taxpayers.

AFSCME workers pay for just 23 percent of their health care costs, or $4,452 a year. State taxpayers pay the remaining 77 percent, or an average of $14,880 per worker.

1. Most state workers receive free retiree health insurance

The state also subsidizes 100 percent of the health insurance costs for state retirees who spent 20 or more years working for the state. Such a benefit is almost unheard of in the private sector.

This benefit costs taxpayers $200,000 to $500,000 per state retiree. An ordinary worker in the private sector thus would need to have $200,000 to $500,000 in the bank before retirement to purchase the insurance most retired state workers get for free.

1. Career state retirees on average receive $1.6 million in pension benefits

Thanks to unrealistic pension rules, career state workers – meaning those who work 30 or more years – will average $1.6 million in benefits over the course of their retirements.

That’s on top of Social Security benefits, which nearly all state workers receive. In addition, over half of state workers end up retiring in their 50s.

It’s not fair that Illinois residents, struggling with stagnant incomes in one of the nation’s weakest economies, continue to subsidize AFSCME benefits to such an extent.

Many other unions that contract with the state have recognized that taxpayers can’t afford higher taxes to fund even greater pay and benefits for state workers. Officials from more than 17 unions, including the Teamsters, understood the depth of Illinois’ fiscal crisis and agreed to affordable contracts with the state.

AFSCME, which represents a mere 0.5 percent of Illinois’ total labor force (35,000 state workers out of a total 6.5 million workers), is putting undue pressure on the state and its finances.

The General Assembly needs to allow the governor’s veto of HB 580 to stand.

Instead of increasing benefits as AFSCME has demanded, the state should work to bring its employees’ total compensation more in line with what the private sector can afford.

Ted Dabrowski
Vice President of Policy

Question of Fairness

The AFSCME seeks “fairness”.

I wholeheartedly agree. Here is my eight-point proposal.

1. Cut AFSCME salaries an average of 40%
2. Make AFSCME employees contribute 50% to health care plans.
3. Drop AFSCME retiree health benefits entirely. Put them on Medicare.
4. Put caps on pension pay.
5. Kill defined benefit pension plans entirely for new hires.
6. Pass right-to-work legislation.
7. Allow municipalities to go bankrupt.
8. Kill all prevailing wage laws,

Mike “Mish” Shedlock