NEWS ANALYSIS : L.A. Teachers’ Pay Dispute Is Ominous Sign for State : Labor: More battles are likely as agencies deal with budget woes and public employee unions’ leverage erodes.

The dispute between the Los Angeles Unified School District and its teachers, who are threatening to strike over deep pay cuts, is likely to be repeated in a growing number of desperate struggles between increasingly impoverished government agencies and public employee unions, experts say.

The bargaining leverage once enjoyed by unions such as United Teachers-Los Angeles, which successfully struck in 1989 to win large pay increases, is eroding as governments run increasingly short of funds and taxpayers remain reluctant to contribute more taxes, these analysts believe.

Such a climate, in which collective bargaining becomes a dead-end game, has ominous overtones for California, one of fewer than a dozen states where strikes by public employees are legal.

During much of the 1980s, public sector unions negotiated significantly better contracts than private sector unions, which were often forced to accept wage cuts and benefits concessions as American industry attempted to hold down labor costs in the face of foreign competition and deregulation.

At the start of the 1980s, the average American state or local government worker was earning 21% more than the average private sector worker. By 1988, the average government worker was making 41% more.

But that gap is closing rapidly as state and local governments slash their budgets in response to sagging revenues, which are the consequences of the nation’s sluggish economy and the gradual effect of Reagan and Bush administration policies that have shifted some federal responsibilities to the states.

These trends give the Los Angeles teachers’ pay dispute--which for now is being played out in court--implications beyond education, said David Lewin, director of UCLA’s Institute of Industrial Relations.

“It is likely to be one in a string of (future labor) disputes in schools, hospitals and law enforcement . . . having to do with the cost and quality of what we get in government operated services,” Lewin said. “I don’t think this is going to be an isolated example.”

Daniel Mitchell, a professor in the Anderson School of Management at UCLA, said: “Until a year or two ago, the public sector world was somewhat insulated from pressures for wage concessions and rollbacks. But the bloom is off the rose.”

State budgets will grow only 2.4% in 1993, far below the 8% average annual increase during the 1980s, according to a report by the National Governors Assn. and the National Assn. of State Budget Officers. State revenue projections for next year are only 1.1% above this year’s figures.

Recent labor contracts throughout the nation show that government workers are paying the price.

In public employee contracts involving 1,000 workers or more, the average pay raise was only 2.6% in 1991, down by nearly half from the average 1990 raise of 5%, according to the federal Bureau of Labor Statistics. The average private sector union contract signed in 1991 contained a 3.7% pay increase. Among teachers, the trend was similar. The average American teacher received a 3.6% salary increase last year, down a third from an average raise of 5.4% in 1990, according to the American Federation of Teachers.

In Los Angeles, the first major conflict in response to public sector wage tightening came a year ago last week, when thousands of county nurses, social workers and other government employees from several unions staged a series of brief strikes that disrupted county hospitals and other government services.

The unions settled for a small pay increase that was deferred for one year but won increased county payment of health benefits. A week later, when that agreement appeared to be in jeopardy, 5,000 of the county’s 40,000 employees staged a one-day general strike to pressure the Board of Supervisors to meet their terms.

The teachers’ pay dispute presents a more intractable case: a government agency with fewer options and a union with less leverage.

The Los Angeles Board of Education, facing a $400-million budget deficit, voted last month to impose pay cuts on all employees, including a 9% cut in teacher salaries. In response, members of the teachers union authorized their leaders to call a strike. That decision has been postponed while lawyers for both sides argue over whether the state Education Code prevents teachers’ pay from being cut after July 1.

In 1989, teachers struck for sharply increased pay and won a 24% salary increase over three years. In those three years, the average California teacher’s salary increased a total of 7%, according to the American Federation of Teachers.

This year, when the district imposed the pay cut Nov. 6, the teachers union chose not to strike, threatening only a one-day walkout for the next week, a plan that was put on hold when the union won a temporary restraining order against the pay cut. Teachers unions in many other cash-strapped California school districts are settling for a pay freeze or tiny increases, according to a California Teachers Assn. spokeswoman.

“I don’t think there’s going to be much support for people who strike in 1992,” said Allan Odden, a USC professor of education. “You have 10% unemployment in California, everybody’s scared, the economy’s not growing, most people are thankful they have a job.”

A labor activist familiar with the county workers’ strike and the teachers’ pay dispute said teachers have significantly less leverage in their pay standoff than did county workers.

The activist, speaking on the condition of anonymity, said teachers cannot pressure the school district to raise tax revenue because of Proposition 13; in contrast, the County Board of Supervisors can legally raise some fees, and did so under pressure from its unions.

In addition, the school board has relatively few alternative budget-cutting strategies, while the huge county bureaucracy offered myriad choices. Finally, teachers negotiate separately from other school district unions, while most county unions negotiate jointly.

“The basic lack of leverage the teachers have is that there’s no money,” the activist said. “On the other hand, what the teachers do have going for them is that the world really cares about what they do, and they’ll generate a crisis if they go on strike.”

Linda Babcock, professor of economics at Carnegie Mellon University in Pittsburgh, Pa., said disputes such as those in the Los Angeles school district suggest that the tradition of private sector collective bargaining does not work well in the public sector.

“In the private sector, unions push for wage increases and somehow the check is from competition in the marketplace; the union can’t keep pushing and pushing because the firm will go out of business. But in the public sector you don’t have that check on the union,” Babcock said.

Another problem, Babcock said, is that the management side in public sector disputes--boards of supervisors and school boards--are reluctant to balance wage increases with layoffs because they are sensitive to their community’s employment needs.

These factors tend to bring government labor disputes to gridlock more easily, Babcock said. The hard feelings that result tend to poison the agencies with a permanent adversarial tone.

It would be more beneficial, she said, to have an arbitration system in which both sides made a final offer to an arbitrator, who imposed a settlement.