Unions Adamant on Contributions : Phone Strike Centered on Issue of Health Care
Eileen Colson, a 38-year-old Pacific Bell clerk, was walking a picket line in Burbank with her 6-year-old daughter, Kristen. It was her first time on a picket line.
Colson, one of more than 150,000 striking employees at three regional U.S. telephone companies in California and 14 other states, was upset because her union had told her the proposed contract would require her to pay for a greater share of her health-care benefits.
“Don’t take it away from us,” she said emotionally. “Don’t make things worse than they already are.”
Such scenes in the phone strike, which ended its third day Tuesday with some scattered vandalism and informal talks but no settlement in sight, illustrate why health care has become one of the stickiest issues in U.S. labor relations.
Labor unions, which during the 1980s have been willing to absorb relatively low wage increases in a climate of low inflation, are exhibiting far more militancy on the question of whether workers should contribute more to company health benefits in an era of runaway health costs.
The debate seems to have no middle ground. Managers, complaining that company insurance costs are rising as much as 20% a year, argue that employees must share increased responsibility. Union leaders steadfastly refuse to accept reductions in benefits that were won over decades of bargaining and believe that their staunchness on this issue will eventually pressure U.S. corporations into supporting the concept of national health insurance.
“Our people do not approve of the philosophy of cost-shifting. They are not going to be party to a contract that contains it,” said Clara Allen, a spokeswoman for the Communications Workers of America in its strike against NYNEX Corp., whose phone companies serve the Northeastern United States and have 60,000 striking employees. Also being struck are Pacific Bell, which has 42,000 workers on picket lines in California, and the Philadelphia-based Bell Atlantic.
The unions argue that companies pass on health-care increases unfairly. A survey released last month by the Service Employees International Union, which has nearly 1 million members, said that worker-paid premiums for family health-care insurance jumped 70% in the last two years--more than double the rise in employer costs.
“This is a money fight, analogous to what you would get if the company said, ‘Would you take a 25-cent cut in wages?’ ” said Henry Aaron, a Brookings Institute health-care economist. “Unions are not going to react kindly to such a request. I think they’ve decided to draw the line now and fight about this.”
What the three phone companies are asking their employees to give up is an increasingly rare type of health plan called a “first-dollar” coverage that takes care of virtually all medical expenses. Almost half of U.S. companies were requiring some form of employee co-payment as long as three years ago, and many more have followed suit since.
The contract offers made by the regional phone companies differ in some respects. For example, Pacific Bell last week withdrew its demand that employees begin paying a monthly health insurance premium, while NYNEX continues to insist upon employee premiums. But what each company wants is higher out-of-pocket annual deductibles or employee payment of as much as 30% of individual medical bills.
The companies are encouraging employees to pick and choose from a variety of benefit plans and services. They offer health plans with low or no deductibles to employees who are willing to restrict their medical care to a health maintenance organization (HMO) or to “preferred providers”--doctors and hospitals who give companies lower rates in exchange for the promise of mass business.
Louise Novotny, a CWA economic statistician who specializes in health issues, said the three companies are also attempting to charge monthly health premiums to retirees for the first time. The premiums would be deducted from pension checks.
Robert O’Brien, a spokesman for NYNEX, which has held no negotiations with its strikers since the walkout began, said the company “is not really happy” asking for participation in health care but has no choice.
“Our profit is running 5% to 7% but our (health) costs are increasing at 20% a year,” he said.
O’Brien said NYNEX’s proposal would increase the company’s health contribution by 49% over three years to $3,500 per employee. In return, employees who wanted to retain the first-dollar coverage would be required to pay a $545-a-year premium. Union officials contend that by the third year of the contract, workers would be paying as much as $1,500 a year.
Many of the changes are small and, taken alone, do not seem significant. Others are improvements. For example, Pacific Bell has proposed full coverage of preventive health care and annual physical examinations.
But to union strategists it is philosophically and politically wrong to accept a contract that reduces the percentage of company-paid care in any areas.
“It took us 40 years of collective bargaining” to reach a contract in which the employer contributed all of the costs of health care, “and now they want to go in one fell swoop backward,” complained Ellyn Edwards, president of CWA Local 9503, which represents about 2,000 Pacific Bell workers in the San Fernando and Santa Clarita valleys.
Edwards spoke scornfully about CWA negotiators who last month recommended acceptance of a new contract with Thousand Oaks-based General Telephone Co. that called for a 21% increase in the employee’s out-of-pocket deductible payment. That contract was formally approved Monday.
In all, about 157,000 members of CWA and the International Brotherhood of Electrical Workers remained on strike Tuesday, forcing managers at the three companies to work 12-hour shifts in an attempt to maintain normal service. Callers continued to encounter delays in reaching operators for directory assistance or equipment repairs.
With no breakthrough in contract talks and with indications that the strike could last for weeks, Pacific Bell and the CWA began a battle of press releases on what the phone company is--and is not--offering its striking workers. The company said it is offering 10.9% pay raises over three years. The union said the figure is exaggerated and would be distributed unevenly, discriminating against workers in lower job classes.
Informal talks continued in Oakland, but no formal negotiating session that could produce a tentative settlement had been scheduled as of late in the day.
In two separate incidents of vandalism, about 100 lines serving Century City Mall were cut, and a similar cutting affected another 400 customers in Hollywood, said Pacific Bell spokeswoman Kathleen Flynn. Service was quickly restored, she said, adding that similar incidents were reported in Northern California. There was no evidence that strikers were involved.
Pacific Bell said some CWA members were crossing picket lines to work alongside managers and other non-union employees. These union members drew most of the shouted insults and harassment reported along picket lines.
So far, the company said, two pickets have been arrested in the Los Angeles area--one in Garden Grove for damaging an employee’s car, another for harassing employees at the entrance to the company’s giant switching center in downtown Los Angeles.
Meanwhile, informal talks took place at Bell Atlantic, whose companies serve the Mid-Atlantic states and the District of Columbia. It was the first such working session since contract negotiations broke off Sunday morning to make Bell Atlantic the last of the three companies struck.
The CWA has amassed a national strike defense fund of more than $17 million and will begin paying strike benefits, based on need, if the strike exceeds two weeks, spokesman Stephen Early said.
The number of phone workers on strike could swell significantly this weekend as contracts expire at the three other so-called “Baby Bells”--the seven regional holding companies set up in 1984 to take over the local phone business of American Telephone & Telegraph in settlement of an antitrust lawsuit. The three are Ameritech in Chicago, US West in Denver and Southwestern Bell in St. Louis.
Times staff writers Bruce Keppel and Hector Tobar contributed to this story.
