A decades-long effort to allow state employees to unionize would result in increased costs to the state of at least $1.7 billion a year by 2034, according to an analysis commissioned by the Las Vegas Metro Chamber of Commerce.
The analysis, prepared by RCG Economics, is in response to legislative and executive branch efforts to allow state workers to engage in collective bargaining.
Gov. Steve Sisolak announced earlier this year he supports collective bargaining at the state level. Legislation introduced by the Senate Committee on Government Affairs would give some 20,000 state employees the ability to bargain for wages, benefits and working conditions.
The Chamber did not ask for an analysis of the economic impact of collective bargaining, however, case studies included in the study suggest “contracts resulting from collective bargaining are actually a rising tide that benefit all workers and residents across a government’s economy,” the author wrote.
“Our concern continues to be the cost of providing it,” said Chamber spokeswoman Cara Clarke.
“Technically, estimating the ‘economic benefits’ associated with the higher spending generated by CB (collective bargaining) is something we could certainly have calculated (we use the IMPLAN app which is the most commonly used model for this kind of analysis), but it was not in our scope,” RCG’s John Restrepo told the Current via email. “And second, and more importantly, you have to estimate the share of the CB benefits that would go toward wage increases, some of which are spent in the local economy and some of which are saved, AND the share going to retirement savings which take a number of years before they’re spent in the state or out of state (if the recipient moved). So it get complicated and requires quite a few assumptions.”
In a news release, the Chamber said the study “examined various case studies based on other states that have collective bargaining for state employees. It then looked at the fiscal costs in those states.”
“This report shows that allowing collective bargaining for state employees would add significant new ongoing annual costs to the state budget and would likely take resources away from other important priorities including education, human services, public safety, infrastructure, and health care,” says Hugh Anderson, chairman of the Chamber’s Government Affairs Committee.
The report says states “saw 2.2 – 2.8 times greater increases in total statewide spending when state workers were granted mandatory collective bargaining rights compared to the four other government employee classes (police, fire fighter, teachers and other municipal workers).”
The report says collective bargaining would increase per capita spending in Nevada by $20.16 to $29.27 a year, or between $579 and $596 per capita after 20 years.
The Chamber is also opposing any increase in the minimum wage.
“Our members are opposed in large part because of the cascade effect,” Clarke told the Current. “It tends to increase other wages. Also, we have no tip credit in the state and it increases the Modified Business Tax.”
“We want wage increases to be driven my market demand for skilled workers and not be imposed by a mandated increase,” Clarke said.