Health-Care Costs Strain Labor Pacts: Companies Asking Workers to Share Burden
Monday, September 01, 2008 5:54 AM
Symbols: AFL, RTN
(Source: The Arizona Daily Star)trackingBy Dale Quinn, The Arizona Daily Star, Tucson

Sep. 1--The skyrocketing cost of health care is increasing conflict between employers and unions, and as costs continue to rise, the tensions likely will too.

Over the next year, health-care costs are expected to rise more than 10 percent, according to a survey of insurers by Aon Consulting Worldwide. That's the smallest increase the consulting firm has seen in the past six years.

As a result of such soaring costs, employers have been turning to their employees to defray the expense. Locally, Qwest Communications International Inc. is turning to members of its largest union to contribute to their monthly premiums for the first time, and the defense contractor Raytheon Co. is involved in a federal lawsuit regarding health costs for early retirees.

James Watson, a union representative of Raytheon workers and other employees of defense contractors throughout the state, said in recent years paying for medical expenses has become the key issue during negotiations between employers and workers.

"The majority of labor disputes are around the issues of health care," he said.

In past negotiations, when a company was profitable -- as defense contractors have been -- it didn't ask employees for additional contributions to their health plans, Watson said.

While workers got used to having their company paying for all or most of their monthly premiums as part of a standard benefits package, in recent years that hasn't been the case, said James McBrearty, an associate professor of economics and industrial relations at the University of Arizona who specializes in labor relations.

Health care used to seem a manageable expense, McBrearty said, but "employers started saying, 'We can't afford to pay all the premiums.'"

Since then, employees found the added cost of health care cutting into their standard of living, he said.

"That is what set up the clash between the two," McBrearty said.

Qwest agreement tentative

Last month, contract negotiations between Qwest and its largest union, the Communications Workers of America, stretched past the expiration of their previous contract.

Health care was a sticking point in those negotiations, according to Qwest and union officials.

"We've known for a long time that health care was going to be a lead issue and I think we were all quite open about that," said Qwest spokesman Bob Toevs.

Denver-based Qwest struck a tentative agreement Aug. 18 with CWA members getting wage increases of slightly more than 9 percent compounded over three years, Toevs said.


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