With pay increase for unionized employees, City of Omaha hopes to combat hiring challenges | Politics & Government
Clerks, accountants, police officers, mechanics — as of Thursday there were 198 job openings across City of Omaha departments, a number on trend with the nationwide hiring struggles realized since the start of the pandemic.
Like many employers across the country, Omaha has made changes officials hope will entice and retain workers.
A ratified labor agreement between the city and Local 251, which represents the city’s largest set of civilian employees, brought a wage increase for union members that is unusually high in the city’s negotiating history.
The agreement also brought increased health care contributions, a reduced vesting period for pensions, pay incentives for auto mechanic certifications and for police officers who complete a master’s degree, and the addition of Juneteenth as a paid holiday.
The changes are a sign of the times, said Christopher Decker, an economist with the University of Nebraska at Omaha.
In his more than 20 years of studying the economy, Decker said, the recent gap between job openings and hirings is the widest he’s seen.
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The onset of COVID-19 shook up how many Nebraskans make career-based decisions.
There’s now a hesitancy for some to return to the type of jobs that they had before COVID. Others may have chosen to retire early, or may be holding out for a higher-paying or remote work opportunity, Decker said.
“In many respects the current economic environment really does seem to favor people seeking jobs,” Decker said. “They seem to have a little more negotiating power, which I think is what you would expect.”
While the process of reexamining Local 251’s labor agreement began before the pandemic upended the global economy in 2020, union representatives and city officials view the changes as helpful in attracting applicants.
In 2019, the city’s human resource department contracted with SilverStone Group for a comprehensive wage study.
Unlike in past years, the study looked at wages not only in comparable cities, but in the Omaha metro area as well.
The city then considered both local and regional wages in setting salary increases, said Deb Sander, the city’s human resources director.
“In certain areas you can see where we were definitely behind the market,” Sander said. “Hopefully pulling our salaries up to the same level as the Omaha metro area will help to attract and retain employees.”
Because Local 251’s collective bargaining agreement began in 2021, union members will receive a 2% retroactive wage increase.
The average wage increase in 2022 will be 6.28%, and an annual 2% increase will be made through 2025.
The labor agreement, approved by the Omaha City Council on Tuesday, was “overwhelmingly” supported by Local 251 members, who voted to approve it 232 to 65, said Scott Dombeck, vice president of Local 251.
Of the city’s 198 job vacancies, 108 are Local 251 positions.
“There’s 64 different job classifications within this group, and many of them were far behind where they needed to be in terms of wages,” Dombeck said during a recent public hearing on the agreement. “This contract goes a long way in correcting those deficiencies.”
The city’s civilian management union, Civilian Management Professional and Technical Employees Council (CMTEC), reached a similar agreement, with an average increase of 5.27% for 2022.
CMTEC union board chairman Larry Tatum, who works in the facilities management division of the Public Works Department, said during a recent City Council meeting that union and city officials spent hundreds of hours sorting through the data compiled through the compensation study and by the human resources department.
“It became very apparent that the problems were the wages,” Tatum said. “Our benefits are pretty darn good. When you add it all together it does not create a package that is intensely desirable in the local area, and you begin to have trouble getting people to come and work here.”
The changes agreed on by the union and city “will cure a lot of our employment ailments,” Tatum said.
They may also help to fill long-standing vacancies, like those seen in the Public Works Department.
The department in 2019 sought a $1.1 million contract with an Iowa-based company to assist in fixing city streets.
Todd Pfitzer, who at the time was the assistant director of the department, cited a demand for drivers with a commercial driver’s license, or CDL. The city trains many drivers, only to see them hired away, he said.
A need for drivers persists, Sander told The World-Herald.
The city recently changed its process for training automotive equipment operators. Rather than training internally, a program through Metro Community College provides CDL certification.
The starting salary was also raised, from $17.76 an hour to $21.81 with the new labor agreement.
“There’s a nationwide trucker shortage,” Sander said. “Everybody is looking for those CDL-certified drivers, and we’re hoping that the changes we made recently in increases will not only help us recruit individuals but to retain them with the city.”
Beyond a need for street maintenance and snowplow drivers, Decker has his eye on the possibilities of far-reaching economic repercussions brought by the labor force upheaval.
“There are a number of different ways a labor shortage can impact the economy,” Decker said.
One is added pressure to overall inflation, an unintended consequence that can come from widespread wage increases.
If overall inflation outpaces wage growth, there could be a dip in consumer spending, which accounts for about 70% of the total economy, Decker said.
Some economists with their eye on inflation rates have begun to ponder a possible recession in 2023.
That’s not to say a recession is guaranteed, or even expected, Decker said.
“These are jobs, they’re real people’s livelihoods,” Decker said. “It’s important to get a beat on what’s going on here, if nothing else but to plan how best to anticipate what would be the best course of action going forward.”
For city departments, the course of action will include closing the gap between job openings and new hires.
Sander hopes to see more positions filled through job fairs planned for early May.
A job fair on May 2 and 3 will be open to high school students and their families. Another will be open to the general public on May 4. All will be held at the Omaha Public Safety Training Center from 4 to 7 p.m.
Job postings can also be found on the City of Omaha website at hr.cityofomaha.org/employments.
“Nobody ever wants to hear that ‘I’m going to work for x,y,z company because they pay more an hour,’” Sander said. “We wanted to make sure that we’re competitive and that we’re in line with our comparable cities as well.”
“Hopefully pulling our salaries up to the same level as the Omaha metro area will help to attract and retain employees.”
– Deb Sander, City of Omaha human resources director