In a sign of the oversized effect that health insurance and other benefits are having on wages, about 20,000 Wisconsin state employees gave in to a virtual wage freeze in exchange for keeping a lid on their out-of-pocket costs for healthcare.
Though some categories of workers also saw small-to-medium hourly raises based on their market demand, the contract included a 1 percent increase for all workers for only the last three weeks of the contract—which would provide employees with very little additional income. Rather, this was done in order to ratchet up base pay for the next round of union contract negotiations, which is coming sooner than you might think.
In fact, the just-passed contract was for the 2003-05 biennium, which had already expired as of early July. For the last two years, employees were getting paid based on the previous contract, along with some increased cost concessions for things like healthcare. The latest contract essentially forgives any paybacks that workers would have faced in light of higher healthcare costs paid for by the state while the two sides negotiated the latest contract.
—Ronald A. Wirtz
