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Supervisors employed by the state of Alaska have been without a labor contract since July 1. These nonexempt supervisors, many of whom work as program managers, are the "backbone" of state government.
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Presently, the supervisors and the state are deadlocked over higher wages. The state is offering annual pay raises of 4 percent, 3 percent and 3 percent for the next three years. The supervisors, who are represented by the Alaska Public Employees Association, want 7 percent, 6 percent and 5 percent.
Since 1985, eroding wages have besieged the 1,900-plus state supervisors. There has been a constant downward trend in wages since the mid- 1980s, which was about the last time the state offered competitive pay.
For the last 22 years, there have been 12 years of zero-percent pay raises and 10 years of pay raises averaging 2.5 percent per year. As a result, the eroding wages have caused significant difficulties in retaining and recruiting supervisors and lowered morale among the workforce.
Currently, the state cannot keep the best and brightest supervisors from leaving for better paying jobs, nor compete in the private and federal government sectors that are vying for the same qualified candidates. It's commonplace for the state to hire and train less qualified individuals to fill the vacant positions. Many times, the positions remain vacant due to the lack of applicants or because the applicants are not qualified. These problems have burdened the supervisors with heavy workloads and increasing responsibilities, requiring them to work longer hours.
In determining fair pay raises, the consumer price index is often used. The CPI is a relative measure of consumer prices change over time and is a widely regarded measure of inflation. From 1985 to 2006, the accumulated change in CPI for Anchorage increased by 67.5 percent, which means that $167.50 in 2006 is equivalent to $100 in 1985. During the same period, supervisors' wages increased by only 27.7 percent. The difference is a 40 percent loss in purchasing power.
The employment cost index is another index for determining fair pay raises. The ECI measures changes in the cost of labor for comparable occupations in the private and government sectors. Since 1989, supervisors' wages have lagged behind wages paid in the private sector by 25-35 percent and in the federal government by 40-50 percent.
Recently, the exempt employees in the executive branch were given pay raises to make up for eroding wages. In 2005, the Legislature increased the wages of the governor by 45.7 percent, lieutenant governor by 22.5 percent, and department commissioners by 18.4 percent. In 2006, the state set precedent by increasing the wages of division directors by an average 7.5 percent because of these executive pay raises. In fairness, the supervisors should receive the same pay raise as the directors were given.
The state's current offer of pay raises will not make up for any of the CPI and ECI losses since 1985, nor is it likely to keep up with inflation for the next three years. Already, the change in CPI for 2007 is projected to be more than the 3.2 percent increase in 2006. If the average annual increases in the CPI were 3.2 percent for the next three years, the higher pay raises proposed by the supervisors would make up for 8 percent of the 40 percent loss while maintaining with inflation over the contract period.
With budget surpluses of previous years and now more wealth coming from higher oil taxes, the state has the ability, more than ever before, to pay fair wages. The state should end the siege and be forward-looking and invest in their supervisors. Higher pay wages would ease the difficulties in retaining and recruiting supervisors. If not, attrition of supervisors will worsen and hiring competent replacements will be nearly impossible, leaving the state in dire shape and without the capacity to administer its duties and responsibilities.
Greg Magee is the manager for Alaska's Village Safe Water Program and works and resides in Anchorage. These views are his own.