O'Malley intervention could mean faster deal in Hopkins Hospital labor dispute
By By Andrea K. Walker and The Baltimore Sun
Jul 01, 2014 | 8:18 PM
Gov. Martin O'Malley's intervention in the wage fight between Johns Hopkins Hospital and its service workers reflects the lingering dispute's significance but also signals that it may be resolved soon.
The hospital and members of the 1199 SEIU United Healthcare Workers East labor union, which represents 2,000 Hopkins workers, went back to the bargaining table Tuesday after the governor asked them to take a cooling-off period. Union leaders also called off a four-day strike that was to have begun Friday.
It would have been the second strike in the dispute. Workers walked off the job for three days in late April after negotiations for a new contract broke down. Talks began in March and have continued intermittently.
Neither the governor nor his administration is taking an active role in the talks, his spokeswoman said. O'Malley staff members declined to talk about why he intervened, other than to say it was in the best interest of the state.
But labor experts suggest even his hands-off involvement may put pressure on both Hopkins and the union to negotiate more seriously.
"It puts a little pressure on both sides not to be the one to prevent an agreement," said Philip M. Dine, a labor expert and author of the book "State of the Unions." "It nudges both sides to get away from the rhetoric and sit down and negotiate."
Resolving the dispute may also help avert potential economic consequences for Baltimore, said Chris Tilly, director of UCLA's Institute for Research on Labor and Employment. If Hopkins were to hire replacement workers, the job losses could hit the community hard in terms of decreased economic spending and "economic distress," he said.
The Johns Hopkins Hospital and Health System and the Johns Hopkins University are among the state's biggest private employers.
Because Hopkins is respected internationally, a long dispute also could bring bad publicity to an institution that usually delivers bragging rights for the state.
"It's not a great image to see people on strike or protesting," said John Bullock, assistant professor of political science at Towson University. "The quicker it goes away, the better for the hospital and the administration."
O'Malley's presidential aspirations might also have come into play in his decision to intervene, political analysts said.
"It is to his advantage to be able to show that he tried — and I'm sure he hopes he will succeed — in achieving a solution," said Donald F. Norris, chairman of the department of public policy at the University of Maryland, Baltimore County. "And if he doesn't achieve, at least he tried. He has to have labor on his side to run as a Democrat."
Governors sometimes step into high-profile labor disputes that could be damaging in terms of job losses or some sort of public disruption, such as the closing of schools during a teachers' strike or a mass transit stoppage, labor experts said.
In 2009, Pennsylvania Gov. Ed Rendell intervened in a labor fight over pension benefits in which about 5,000 workers of the Southeastern Pennsylvania Transportation Authority walked off the job. Last year, Gov. Jerry Brown of California called for a seven-day reprieve as San Francisco-area public transportation workers prepared to strike.
"Governors step in particularly when there is an issue of the size of the workforce involved and their perceived vital nature," Tilly said. "In the Hopkins case, it could be economically vital and it could be vital to providing health care to the city of Baltimore."
The main disagreement in the Hopkins dispute is over wages. The union, which represents janitors, housekeepers and other service workers, seeks a $15 minimum wage for workers with at least 15 years of experience in the second year of a proposed four-year contract. Workers currently start at $10.71 to $27.88 per hour, depending on their jobs, and the union proposed that every Hopkins worker earn at least $14 an hour by the end of the contract.
As of last week, Hopkins management had offered to pay all workers with 15 years of experience $15 an hour by 2018, with every hospital worker making $12.25 an hour by the end of the contract, according to a breakdown provided by the union.
While the leaders of 1199 SEIU say they operate independently from the larger Service Employees International Union, their push for the $15 minimum wage falls in line with other actions taken by their parent organization and other locals across the country.
The union was the main backer of low-wage fast-food workers in Chicago fighting for a $15 minimum wage. In San Francisco, a union local got a referendum put on the ballot in November that would raise the city's minimum wage to $15 an hour. It also pushed for a $15-an-hour minimum wage in Seattle.
Hopkins has said it needs to be fiscally responsible and can't afford raises that are too large. Hospitals around the state face increased financial pressure as more care moves out of hospitals to outpatient settings.
New rules also now tie hospital spending to the state economy, eliminating a system in which hospitals are paid based on the number of patients they admit. Hospital costs must not grow faster than 3.58 percent over the next five years, which was the state's average annual growth in the past decade.
Union leaders have countered that Hopkins' contract proposal is insufficient when so many of its workers depend on food stamps and other public assistance because of low pay. They cite the compensation of Ronald R. Peterson, president of the Johns Hopkins Hospital and Health System and executive vice president of Johns Hopkins Medicine, as evidence that the medical institution has money.
Hopkins reported total compensation for Peterson of $15.4 million in the year ended June 30, 2013, according to the latest tax filings. Most of that compensation was pension benefits earned over the course of his career that he won't receive until after he retires.
Peterson's base salary did jump 9.25 percent to $1,203,070, according to the filings, up from $1,101,197 a year earlier. His bonus of $455,714 in the latest year was $4,590 more than in the 2012 fiscal year filing.
Because the economy remains soft, it may be a risky time for service workers to strike, said Paul Harrington, an economist with the Center for Labor Markets and Policy at Drexel University. Hopkins could replace the low-skilled workers easily, he said. These workers might find it hard to find new jobs, which might have prompted O'Malley to intervene, he said.
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"There may be concern on his end that he doesn't want to see a lot of people dislocated, because the re-employment opportunities may not be good," Harrington said.
Both Hopkins and the union say they want to see an agreement.
"We're hopeful that since we are not going to have a strike that we are getting to the point where we can walk away with a settlement that would be equitable for both sides," said Bonnie Windsor, the hospital's vice president of human resources. "I remain optimistic. I remain optimistic every time I walk in the room with them."
"We'll see if [Hopkins officials] come closer to the proposal," said John Reid, executive vice president of the Maryland-D.C. region of 1199 SEIU United Healthcare Workers East. "We are hopeful."