Collective Bargaining Agreements and Work Sharing

At a recent interim committee meeting regarding creating a work sharing program in West Virginia, concerns were raised over potential conflicts between work sharing and collective bargaining agreements. Fortunately, these concerns are easily addressed, and do not pose a hurdle for the creation of a work sharing program in West Virginia.

Work sharing allows employers, in lieu of layoffs, to temporarily reduce their employees hours, with unemployment insurance replacing some of the employees’ lost wages due to the reduction in hours. Work sharing allows employers to keep their skilled workers during downturns, and avoid the costs of rehiring and retraining, while employees get to stay on the job, earn their pay, and avoid long spells of unemployment.

Concerns have been raised that work sharing may be incompatible with workers covered by collective bargaining agreements, or that the use of work sharing may even break a collective bargaining agreement. However, in the thirty-year history of work sharing in various states across the country, and in other countries, there have been no major clashes between unions and employers over work sharing. In fact, unions are often among the big supporters of work sharing, in part because it allows them to keep members.

Work sharing has avoided conflicts with collective bargaining agreements for two main reasons. First, work sharing is voluntary. If a potential conflict would be created between work sharing and a collective bargaining agreement, the employer could simply not pursue work sharing, avoiding any potential conflict. Many states simply require union consent to work sharing plans if the employees are covered by a collective bargaining agreement. This creates an additional safeguard against potential conflict, but is not required under federal guidelines.

While requiring union consent defuses any potential conflicts between work sharing and collective bargaining agreements, the requirement isn’t necessarily needed. This is because most collective bargaining agreements already require employers to consult with unions regarding work hours, making a requirement for work sharing redundant. This is what policymakers in Ohio discovered when the Ohio House passed their SharedWork bill with broad bipartisan support, as well as with backing from the Ohio Chamber of Commerce, nonpartisan policy analysts, the National Federation of Independent Business/Ohio, and the Ohio Manufacturers Association.

Instead of creating conflict, a work sharing program in West Virginia would allow employers and their employees to work together to save jobs and help the economy.

Medicaid Expansion Can Save West Virginia Millions

Expanding Medicaid to 130,000 West Virginians would provide $281 million in uncompensated care savings, according to a new report by the Urban Institute. Taking these savings into account, the total cost of expanding Medicaid in the state would by only $338 million or just $33.8 million per year over the next ten years (2013-2022). This amounts to only $260 for each new Medicaid enrollee per year. 

Though the state of West Virginia has not yet decided whether it wants to expand Medicaid under the Affordable Care Act, these new findings may help alleviate some of the concerns. 

The costs of implementing the Medicaid expansion are relatively small when compared to total state Medicaid spending. Over the ten-year period West Virginia’s Medicaid costs would only increase by 2.7 percent. The federal government will initially pay 100 percent of the state’s Medicaid expansion costs and will drop to 90 percent in the future. The Urban Institute estimates that $8.7 billion will come from the federal government between 2013 and 2022. 

While $338 million may seem like a lot of money, it’s only a very small share of projected state spending over the next ten years, Based on projections from the State Budget Office and a growth rate of less than 3 percent (which is conservative), it would be less than 1 percent  (0.7%) of the state’s base budget over the next ten years.

A decline in uncompensated care and relatively low costs are not the only advantages to Medicaid expansion. The Urban Institute concludes that nationally:

“The Medicaid expansion will yield additional state fiscal gains in three areas: increasing federal matching payments for consumers who would qualify for Medicaid even without the expansion; reducing states’ non-Medicaid health care spending on poor, uninsured residents who would receive Medicaid under the expansion; and increasing state revenues due to heightened economic activity or taxes on insurance premiums or health-industry-specific transactions. These factors could outweigh the net cost increases that we estimate for many states, and they would raise the total savings experienced by states collectively above the estimated $10.1 billion for 2013-2022.”

This small investment will have a large and positive impact on the state. The 130,000 newly insured will be able to take preventative steps against disease and will become much healthier over their life and live longer. When people are healthier and living longer, they are presumably more likely to work, be educated, make more money, and positively contribute to society.

West Virginia cannot afford to ignore this opportunity. It will not only save the state budget millions in uncompensated care, but also provide an opportunity for West Virginians to lead healthy lives.  This is a modest investment so workers can go to the doctor when sick, get medications when necessary, and not rely on the emergency room as a last resort. The impact of a better-insured populace is far too important to our workforce and community.

New York Times Report: WV Ranks 2nd Highest in Business Subsidies

Today, the New York Times had an in-depth front page article exposing the $80 billion state and local governments bankroll businesses each year in subsides, including low-interest loans, grants, tax credits, and other gifts through the tax code. The report finds that West Virginia spends $1.57 billion per year on business incentives, ranking the state second highest in business incentives at $857 per resident.

The article is part of a series entitled “The United States of Subsidies”  that is examining business incentives and their impact on jobs and local economies. While the next two articles won’t be published until Monday and Tuesday, the New York Times has an interactive searchable database for each state that includes state and local incentives by company and program. The page for West Virginia highlights that business sales tax exemptions make up 78 percent – or $1.23 billion – of West Virginia’s business incentives, followed by $80.7 million in corporate income tax reductions and $52.7 million in grants and loans (more on this later). 

Most notably, the article found exactly what our research (see here and here) concluded in examining business subsides in West Virginia: We have little or no idea what we are getting for the millions that our state and local governments spend each year on business subsidies.

Doug Winters, an attorney for a township in Michigan, remarked that companies (auto companies, in this case) treat local government like “their own private ATM. When they need money, they come begging, but when they don’t want oversight, they say ‘get out of the way.’”

Our state policymakers (including the legislature, county school boards, county commissions, and mayors) have the power to enact policies to properly evaluate business tax incentives and to ensure that taxpayers are getting a good return on their investment. For example, they could follow the lead of the New York Times and create a state-wide searchable database of business subsidies. With this basic information, the state and the public would at least be able to see where their tax money is going.