THE BLOG
05/12/2010 10:30 am ET | Updated May 25, 2011

Poison Pill Labor Contract Threatens Plan to Lay Off LA Workers

Wanna hear a joke? Only, this joke is on us! So, it turns out that there is a very big catch to LA Mayor Antonio Villaraigosa's announced "plan" to eliminate 761 city jobs this fiscal year. As the Los Angeles Times reports, because of contracts negotiated only last year with city labor unions, any layoffs would put into effect a poison pill--the triggering of two raises for many surviving union coalition workers.

That's right, the city will actually have to pay some workers more in order to get rid of other workers, thus limiting any financial benefit that might come about by the elimination of workers from the city's payroll.

And some wonder why the city is such a joke to many in the outside financial world?

According to the Los Angeles Times, under current labor agreements--negotiated, by the way, by both the City Council and the Mayor--the city would have to cough up a 3% raise to some 15,000 union workers right away, followed by yet another pay increase of 2.75% just half a year later!

Of course, the unions are using this to their full advantage--as was intended by the inclusion of this provision into their renegotiated contract last year.

A spokeswoman for the workers' coalition tells the Times, "This is the first time that I've ever heard of a union fighting against a pay raise." Barbara Maynard goes on to say, "But city employees are willing to forgo a pay raise that they negotiated if the city will work with us to keep critical services going and people employed."

Los Angeles has become a city where financial extortion is now the normal way of doing business: Remember the recent controversy involving the Department of Water and Power, which was refusing to hand over to the city millions of dollars it owed unless it first got a rate hike it wanted approved? It was. Now, city unions are in a position to demand no layoffs or else fat pay increases all around.

One would presume the mayor and City Council knew this for a long time (the poison pill contract, remember, was just negotiated last year!)--so when exactly were they intending to discuss this publicly with the citizens of the city? Funny, when "V" announced his make-believe rescue plan for the city with great fanfare, I don't recall him saying a word about a labor agreement that he helped negotiate that would require the city to pay what amounts to ransom money to the unions if he went ahead with his plan.

Gee, you suppose that maybe he really didn't mean any of it?

Now, the city's top budget analyst, Miquel Santana, says, according to the Times, that, even after raises would be handed out, if the city went ahead with its layoff plan, there would still be a net savings to the city of "nearly $16 million. And, by 2013, the savings would reportedly grow to as much as $63 million.

When you look at it from that point of view--which is a good one, I think--the course to set seems clear: The city should go ahead with the job elimination/layoff plan. It would still save money in the long run, even if there is some added costs in the short run.

Charles Feldman is a journalist, media consultant and co-author of the book, "No Time To Think-The Menace of Media Speed and the 24-hour News Cycle." He has covered police and politics in Los Angeles since 1995, and currently is a regular contributor of investigative reports to KNX1070 Newsradio.