More than 5,000 city of San Diego white-collar workers would get pay raises offset by furloughs under a new contract that recently received tentative approval from union leaders and the City Council.
The unusual three-year contract acknowledges the city’s budget crisis by offsetting the financial impact of 2% pay raises during the contract’s first year with forced one-week furloughs that reduce pay by an equal amount.
The deal will likely serve as a blueprint for all city employee labor unions during ongoing contract negotiations, but raises for firefighters and police officers will likely be delayed because they essentially can’t take furloughs.
The deal for the white-collar workers, who are represented by the Municipal Employees Association, includes 2% raises in fiscal 2027, 3.5% raises in fiscal 2028 and 4% raises in fiscal 2029.
One-week furloughs are required during the first and second years, offsetting the initial 2% hike but not any of the additional pay raises in the tentative deal.
While the deal is budget-neutral during its first year, city residents would likely notice the impact of the furloughs as the absence of workers decreases the quality of service in many areas.
Because firefighters and police officers can’t take furloughs without jeopardizing public safety, their contracts will likely have the same cumulative value – 9.8% over three years – but be structured differently.
There will likely be no pay raises during the first – and possibly the second – year, and then a large hike in the final year of the deal. But only MEA has reached a tentative deal so far, with five other city unions still negotiating.
The deal comes just before Mayor Todd Gloria is scheduled to unveil Wednesday a proposed budget for the new fiscal year that’s expected to call for dozens of employee layoffs and a wide range of cuts to close a $120 million deficit.
While critics could say that’s odd timing for employee raises, union leaders and city officials repeatedly say it’s important for city workers to keep pace with their counterparts at other agencies.
The goal is preventing a mass exodus of workers frustrated by stagnant pay, and simultaneously avoiding pay raises that would worsen the city’s short-term financial problems.
A new salary survey comparing the pay of San Diego’s white-collar workers to their counterparts at 22 other government agencies found that they still fall short by 6% on average. That’s despite those workers getting 23% raises over three years in 2023.
Unlike most pay raises in the private sector, these hikes are in addition to pay raises employees get for reaching years-of-service milestones.
The pay raises would also increase the city’s long-term pension obligations, worsening the city’s budget crisis by increasing its annual pension payment above its already record-high levels.
Part of the rationale for not requiring furloughs in the third year of the deal is a city budget forecast called the “five-year outlook” that showed last fall that city finances are expected to stabilize by fiscal 2029.
Some of MEA’s 5,400 members can’t take furloughs because they work in public safety positions like dispatcher or crime lab technician. Instead of furloughs, they will lose the three days of discretionary leave they get each year.
In a message to members on the MEA website, union leaders explained the rationale for accepting pay raises combined with furloughs.
“The city is unwilling to provide a net pay increase for any employee in the first year of the contract because of the very significant budget deficit and impending service and position cuts facing the city in next year’s budget,” the message says. “Your negotiating team chose the ‘net zero’ approach because at least employees get 40 hours of time off from work in exchange for the ‘net zero’ and when the mandatory furlough goes away the pay increase stays for the rest of this contract and the rest of your career.”
The City Council approved the deal, which was negotiated by the mayor’s staff, last week in closed session.
The membership of MEA will next vote on the deal, likely during early May. If approved by membership, the deal will go to the council for a final vote in open session.
In addition to pay raises, the deal includes a new retiree health benefit. It also includes larger raises for a small sliver of MEA members in jobs that are hard to fill — roughly 3% of MEA workers.