The composition of the management negotiating team as a determinant of Ohio municipal employee wage outcomes

Abstract

The average citizen and his elected government representatives have very little knowledge of the impact of public sector collective bargaining on their lives. Through there is no scarcity of material written about public sector labor relations, there is a lack of empirically-based research concerning the effects of unionism and public employee wages. This information is especially relevant and urgent today when so many cities face financial disaster. In times of rapidly escalating costs, both for individuals as well as state and local governments, the need for additional data regarding determinants of public employee wages is obvious. Particularly important is better data regarding the wage impacts of variables within the scope of control of the public sector manager. The aim of this research project is to determine if the composition of the management negotiating team has an effect on the outcome of the union's wage demands. The literature supporting evidence is weak and tends to be anecdotal. We will seek to test this alleged relationship using a sample of Ohio cities. Our observations will cover a period of four years during the mid-1970s. We will evaluate the compensation (wages plus fringe benefits) paid to police and firefighters. Our hypothesis is that higher union wages are a result of decentralized authority and dispersed power of the management negotiating team. Winston Churchill, in describing Russian foreign policy, called it "A riddle wrapped in a mystery inside an enigma." The same description could be given to the process of modern labor/management relations in many cities. This paper seeks to unravel some of the mystery by shedding light on how to makeup the management negotiating team affects wage outcomes for municipal employees. Though many different factors contribute to the wages earned by public sector employees, this study will focus on the significance of policy variables,those over which management does have some control.