Issue Summary (Updated January 2009)
In Pennsylvania, where teachers and transit workers can shut down services and inconvenience their users, at least one important sector of the workforce is prohibited from going on strike. This sector is comprised of policemen and firemen. Instead, they enjoy binding arbitration under Act 111 of 1968.
What We Know:
There are problems with this law. The law is quite brief and makes no mention of mediation or fact-finding provisions. The arbitration panel appointed in a dispute is made up of three members—one appointed by the union, one by the employer (the municipality) and the third a pick of the employer and the union. The employer has to pay the costs of its arbitrator as well as the costs of the neutral arbitrator. There is no mention of what factors, if any, the panel is to take into consideration when deliberating the award.
In short, placing control over salary and benefits of public safety workers into the hands of arbitrators has proven to be a recipe for disaster as costs have climbed across the state.
We have found that binding arbitration for police and fire is far more likely to be present in states that are not Right to Work and those that have levels of public sector unionization of 50 percent or greater. In comparison with the laws in the neighboring states of New York and Ohio—which spell out specific conditions for arbitration to occur and set out criteria to be considered in settlements—Pennsylvania’s statute is weak. That there has not been a statewide, systematic evaluation of Pennsylvania's Act 111 since the late 1970s which produced a series of recommendations, none of which were adopted, showing that there is little legislative interest in taking on the statute’s shortcomings.
A far better system for binding arbitration requires changes to the selection of arbitrators and the criteria they use in making an award. These changes include:
Second, once arbitration has commenced, the board should have freedom to craft an award, even if it means starting from zero. This process must be guided by objective, measurable criteria, including, but not limited to:
Clearly, as far as possible, market forces should determine wages and what types and amounts of benefits should be awarded. There should never be a provision that shields employees from layoffs or requires minimum pre-set staffing levels regardless of the financial situation of the community. Adopting these measures is the only way to ensure that pay increases are compatible with market forces and that any burden of benefits that are not enjoyed elsewhere are placed on taxpayers. These changes would help move the present collective bargaining system from one in which outcomes are basically decided before arbitration is convened to one where there is a chance that public safety unions won't automatically get everything they want.