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Saturday, August 30, 2014         

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Randy Perreira

The chief of Hawaii's largest public workers union says don't blame government employees for the state's fiscal crisis

By Dave Koga

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Randy Perreira doesn't think Hawaii's public sector unions are endangered — at least not the way they are in Wisconsin, where a newly-elected Republican governor and House majority are driving union-busting legislation.

But that's not to say they don't face dangers.

Public workers have become easy targets for legislators looking to make cuts in budgets, says Perreira, executive director of the 28,000-member Hawaii Government Employees Association (43,000 counting retirees and other associate members).

Union benefits did not cause the recession, he says, and members shouldn't have to shoulder the bulk of the sacrifices. Perreira makes no apologies for benefits, which he says were won fairly through tough collective bargaining and are not exorbitant when viewed as the sum of a career in the public sector.

"Life is different for public workers," he says. "They pay more for their medical, and their pay is generally less. But upon retirement their benefits package is likely better than most private sector people. It's a balance."

Perreira says hard times make it easy for people to "buy into the rhetoric" and overlook the contributions and dedication of public sector employees.

Now, with talks on a new collective bargaining agreement at hand, Perreira says the union and the community face tough but necessary decisions over what kinds of government services the public wants — and what it is willing to pay for.

QUESTION: What's your take on what's happening in Wisconsin and how it might affect unions here?

ANSWER: What's happening in Wisconsin, and likewise in Michigan and Indiana and Ohio, reflect in my mind more of a political and ideological assault than perhaps what is happening here.

There, the Republicans have chosen to take advantage of decided majorities in their state houses or governors' offices and have determined that this is their opportunity to strike a blow at the Democratic Party and organized labor, which is arguably the longest standing pillar, if you will, of Democratic support.

I think there are some parallels here because what they have chosen to do there has been to make government employment, and in particular the benefits of government employees, a scapegoat. Now, I'm not going to get into all the rhetoric of how the big banks can be blamed, or the corporations, or all this other stuff ... the mortgage crisis that led to the economic meltdown. But to some degree here, lawmakers also cite the same costs as part of the problem and are using that as justification to make changes and make cuts to where we would argue (that) we don't view public employment to be the problem.

While we all have to face the budget situation together, it should not be where it's just put on the backs of the employees, as you note from the governor's proposed budget where the largest cuts come from public employment rather than any other areas.

Q: Are you surprised that (Gov. Neil) Abercrombie would be proposing these things?

A: In the last two years I've learned not to be stunned by anything.

Q: What is the perception out there in terms of how people view public employees?

A: I think it's most unfortunate, because if you look at polling, or from just gauging letters to the editor that you folks publish, it seems that the anti-public-employment rhetoric has continued. ...

It's easy to buy into the rhetoric. But what's been disappointing is that (some legislators have) consciously attempted to draw parallels between public employment and what has happened in the private sector the last couple of years. ... We have historically gone through peaks and troughs in the construction industry in Hawaii, yet there's been an effort to say, "Gee, you know, these construction guys have been out of work for so long so you government workers should be eating it, too."

Q: A lot of the resentment is clearly aimed at benefits. Can you make a case for why public sector workers should receive benefits private sector workers don't?

A: The first question I would ask you is, "What benefits do they get that private sector employees don't?"

Q: Defined pensions ... Medicare Part B (reimbursement) ...

A: But it's not true. Some private employers do give that as part of their retirement packages. What I'm trying to do is make the point that the media is quick to ask me that kind of question, as if buying into the general rhetoric, but it's not entirely true. Public employees, by and large, have a compensation and benefits package that is comparable in many ways, but clearly different. ...

In many instances, pay is roughly parallel, but in a number of instances, particularly professionals, it's less in the public sector. Government employees pay for their medical premiums throughout their careers. ...The promise, though, is that they're paying today because upon retirement they're getting it free.

As for those that have argued against Part B, the reality is that prior to 2000, union workers and retirees were part of the old state health fund and part of the risk pool. And the government came to realize then that ... continuing them in what would become the EUTF (Hawaii Employer-Union Health Benefits Trust Fund) would be a more expensive prospect for the state than to pay Medicare. So the state made the decision to require, at age 65, enrollment in Medicare. ... And Medicare Part B was a conscious decision to ensure that the state's costs were less.

It still goes back to that promise: You pay for your health care while you're working, because the state exempts itself from the Prepaid Health Care Act, and upon retirement your benefit is free.

The debate about whether we can continue that as a promise is a legitimate one and one that I think should be engaged. But the question of whether the benefits these guys received is inappropriate and too costly is an unfair characterization.

The other benefit state workers get is a defined benefit retirement plan. Clearly, across the country, those kinds of plans have been changing. Now, I could get ideological and say it was never right in my mind for companies like DuPont to dump their plans, screw their employees and continue to make zillions. Here, our pension plan situation is really the result of public policy decisions to skim excess earnings. And I think that anybody involved with the ERS (Employees' Retirement System), the trustees, would confirm that if the retirement plan earnings had been left intact and not skimmed into the general fund, maybe we wouldn't be 100-percent funded, but we would not be at around 60 percent, and it would not be the issue that it is today.

Q: Do you expect a deal before the end of (the legislative) session?

A: I don't know. I think it's just a matter of what's being asked. From our perspective, we're not naive about the situation. The most troubling thing about the budget right now, to be very blunt, is that everybody realizes there is an anticipated shortfall, and we know the biggest driver of that was the deferral of the tax refunds and the economy. But what's troubling is that the governor is looking to expand government and increase spending, so there is the prospect that employees may be asked to make concessions while at the same time they're looking to add employees and restore programs. So that's obviously a cause for alarm.

Q: Why is binding arbitration so important to the union? Isn't the right to strike enough?

A: There are purists still within our ranks that believe that in the event that you've reached a total impasse, that striking is the better path. But we came to believe after the 1994 strike that we in the public sector have a responsibility to provide service. That's why people take these jobs. They don't take it for the money in most instances. It's a steady job, certainly, and there is that promise of good benefits. But mostly, they take the job because they want to serve the public.

Arbitration is a process that allows for both parties to go through discussions after there's been some discovery. In a strike situation, the employer is capable of withholding information. But in an arbitration setting, there is a means of discovery, and at that point you can have candid conversations because once material documents are provided, both sides can see a bit more clearly what the true facts are.

Q: Do you expect any other ripple effects from the mainland?

A: I don't want to overstate this, but we're at an important juncture in Hawaii's history. ... We've seen slumps before, during Gov. (George) Ariyoshi's time, during Gov. (Ben) Cayetano's time, where we went through a couple of rough years. But this is the most prolonged slump that we've seen.

One fear I have is that people will come to believe, "Oh, this is a new normal. We have to change." And my response is, "Do we have to change and adjust? Sure. But to suggest that we're at this new normal point where everything from the past is wrong? Baloney."

I think Hawaii will be able to rebound, but we need to start addressing some structural issues that we face. We have been very reliant on tourism and the military. Tourism has been facing challenges for some years from competition and aging infrastructure here. The military? We're not sure where that's going to go with respect to the earmarks and the loss of some of the funding that Sen. (Daniel K.) Inouye has been able to secure.

As a community we need to determine what level of government service we want. ... And once we determine, as a community, what we want, then we have to make sure we're going to pay for it. Because the public service isn't free. It's going to involve some tough choices, and I would hope that legislators are willing take a hard look and not be so reactive.






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