Obama’s Federal Wage Freeze Will Become Model

They’re calling it Obama’s PATCO—his proposal for a two-year wage freeze for two million federal workers. When Ronald Reagan fired 13,000 striking PATCO members, the air traffic controllers, in August 1981, he sent a signal to other employers that it was open season on unions—and the era of concessions began.

Now, around the country, local and state governments will use the president’s position to justify their own layoffs, freezes, and furloughs. Private industry will do the same.

Obama’s move already seems to have emboldened other leaders to take a swing at unions. Ohio’s Governor-elect John Kasich announced he would rescind executive orders that granted collective bargaining to childcare and homecare workers.

In Wisconsin, incoming Governor Scott Walker called for tripling health care costs for public workers and unilaterally ending their right to collectively bargain if they don’t agree. (Their contract already has a wage freeze and 16 furlough days.)

Walker also floated the idea of converting the state to right-to-work. “We’re waiting for the showdown,” said Dan Large, IBEW Local 494 business manager in Milwaukee.


One union stalwart told Labor Notes that Obama’s wage freeze sends exactly the wrong message: “It certainly sends a chill through me at my shop, where we took huge wage cuts in the last go-round, and I anticipated a fight to win back some of it when we bargain next spring.

“Now we have the head of the government, a pro-labor guy no less, calling for a freeze, and even though I am not in a government job, he has pulled the rug out from under us.



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“Employers at unionized companies will turn to union officials and say, ‘Your own guy is authorizing this, how do you expect us to give you a raise?’”

What a way for Obama to repay all those union members who staffed phone banks, got out the yard signs, and knocked on doors to elect him.

Obama told the press, “Small businesses and families are tightening their belts. The government should, too.” Colleen Kelley, head of the Treasury Employees union, said union officials would try to stop the plan in Congress.

Whether the unions can get the Democrats they elected to stand up to Obama, the Democrat-in-Chief, remains to be seen.

One thing is sure: the move is pure political theater, in terms of reducing the federal deficit. The freeze would shave $5 billion by 2012 from a $1.3 trillion deficit—a minuscule 0.4 percent savings.

The U.S. Office of Personnel Management says federal worker yearly earnings average around $75,000, partly because these workers boast longer service on the job and better education than private sector counterparts—nearly half are college graduates. Two of the largest job categories of federal workers are nurses and IT specialists.

A lot of the less-skilled, lower-paid federal jobs have been contracted out. In addition, averages are skewed upwards by many levels of management at the top. Pay for federal workers ranges from a VA nursing assistant making $28,000 up to Congress members’ $174,000 and beyond.

But resignation seems the order of the day. At a local AFGE meeting in Cincinnati, there was anything but outrage over the wage freeze. Members said they knew they had to do their part—but couldn’t someone make sure health insurance costs don’t go up?


Obama’s certainly not going after the real money. The banks—you remember, the banks we bailed out after they caused the economic crisis—have returned to paying multimillion-dollar bonuses. Banks’ revenues (3 percent) are being outpaced by their bonuses (4 percent), with hedge funds and banks paying hundreds of bonuses that average more than $500,000—each.

Last January Obama called these bonuses “obscene,” but he never found the political will or wherewithal to stop them. So while federal workers feel the freeze, bankers are warm and cozy.

What’s most disturbing about Obama’s slap at federal workers is that it’s part of a pattern. Secretary of Education Arne Duncan is in full “blame the teacher” mode, with his Race to the Top incentives that decimate unions and teacher rights. Obama’s plan for a Social Security tax “holiday” will weaken our retirements permanently.

His bailout of Chrysler and GM cut pay in half for future auto workers, obliterated their pensions, and took away workers’ right to strike. He’s negotiated a free trade deal with South Korea that will kill jobs here—and make them worse there.

Obama saved the bankers and the auto execs, and slaps down federal workers, school teachers, auto workers, retirees—and the rest of us.

Dan La Botz is the author of A Troublemaker’s Handbook 1.

A version of this article appeared in Labor Notes #382, January 2011. Don't miss an issue, subscribe today.