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Statement From Hopkins Hospital Regarding Union Negotiations


The Johns Hopkins Hospital and District 1199E-DC/Service Employees International Union --AFL/CIO currently are in negotiations for a new contract for the 1,700 union members at the Hospital.  Although the current agreement between the Hospital and the Union was to expire on Monday, December 1, 2003 at 7:00 a.m., Hospital officials have agreed to extend the contract twice, at the Union’s request, and those extensions expired March 1, 2004.

As in the past, Hopkins and SEIU had agreed to not disclose details of negotiations. Hopkins had hoped the Union would continue to direct its resources and energies to a fair settlement. However, the Union's launch of an aggressive public campaign, including ads and a press conference, requires a response, particularly in light of some misleading statements and factual misrepresentations in the materials distributed by the Union. 

ISSUE # 1:  Pay/benefits

The Johns Hopkins Hospital is committed to offering all of its employees:

? a competitive salary
? a comprehensive and affordable benefits package
? opportunities for skills enhancement
? training opportunities
? the opportunity for career advancement
? a safe workplace
? stable employment

Already, The Johns Hopkins Hospital pays more to employees covered by the Collective Bargaining Agreement at Hopkins than the minimum wage set by Baltimore City and has added a rich benefits package to the wages that adds 21% to the value of the hourly wage. 

• The lowest wage paid to any employee covered by the Collective Bargaining Agreement at Hopkins is $8.80/hour plus benefits once employees complete their first ninety days.  The minimum Baltimore City wage is $8.70 per hour. Some highly skilled workers covered by the Collective Bargaining Agreement are paid as much as $22.75/hour.  Not only is Hopkins well above the minimum wage set by the city, but it also provides a rich benefits package, though not required to do so.  In addition to the base hourly rate, each worker receives an additional 21% of that rate in the form of benefits.

A comparison of wages for most of the Hopkins positions held by Union members compared with the Baltimore Living Wage, the Market Average, and the Prevailing Wage dispels the myth that Hopkins pays its employees low wages.

Examples of hourly wages
 (the prevailing wage is the wage required to be paid by federal contractors who hold service contracts and is determined by the Department of Labor for each specific locality)

Environmental Service Worker
Baltimore Living Wage $8.70 
JHH Average Pay Rate $9.54 
Market Average  $9.42
Prevailing Wage  $9.22

Food Service Worker
Baltimore Living Wage $8.70 
JHH Average Pay Rate $9.60
Market Average  $8.91
Prevailing Wage  $8.84

Dietary Cashier
Baltimore Living Wage $8.70
JHH Average Pay Rate $10.05
Market Average  $8.75
Prevailing Wage  $7.92
Transport Associate
Baltimore Living Wage $8.70
JHH Average Pay Rate $10.74 
Market Average  $9.25 
Prevailing Wage  N/A

Baltimore Living Wage $8.70
JHH Average Pay Rate $12.74
Market Average  $11.63 
Prevailing Wage  $10.17

Painting Maintenance Mechanic I
Baltimore Living Wage $8.70
JHH Average Pay Rate $16.33
Market Average  $15.54
Prevailing Wage  $17.02

Carpentry Maintenance Mechanic I
Baltimore Living Wage $8.70
JHH Average Pay Rate $17.15
Market Average  $17.13
Prevailing Wage  $17.40

HVAC Maintenance Mechanic I
Baltimore Living Wage $8.70
JHH Average Pay Rate $17.39
Market Average  $18.50
Prevailing Wage  $16.58

The Johns Hopkins Hospital offers a valuable and affordable benefits package that supports our employees’ lives during their working years and after their workdays are ended.

Existing benefits to Union members include:
• Medical / Vision / Prescription Drug
• Dental Insurance
• Life Insurance-Basic with Accidental Death and Dismemberment
• Salary Protection: Short-term disability provides a benefit of 66 2/3% of base salary up to a maximum of $275 per week for 26 weeks.
• Pension: This employee benefit is fully paid by the Hospital and is based on salary and years of service.
• Tuition Assistance:  Tuition Assistance Advancement and Reimbursement programs are provided to cover up to a maximum of 18 credits per academic years. Funds are also allocated annually for the Joint Training Council to provide assistance for programs not covered under the Tuition Assistance Advancement Program.
• Vacation: Vacation time is provided based on years of service after the first year of employment – 10 days up to a maximum of 27 days after 20 years.
• Sick Time: In the first two years of employment, employees receive sick leave at a rate of 5/6 of a day for each month of employment. At the beginning of the third year, employees receive ten (10) additional days of sick leave. Regular part-time employees accumulate such sick time on a pro-rated basis.
•  Tax-deferred Annuity: Employees may save money to supplement their retirement income. Employees’ contributions and earnings grow on a tax-deferred basis.
• Training programs for employment advancement:  Hopkins Hospital has several programs designed to encourage employees to advance in their careers. In fact, the U.S. Department of Labor was so impressed by our programs that it recently awarded The Johns Hopkins Hospital a major demonstration grant to allow other hospitals throughout the country to learn from the Hopkins experience.  (Additional information about the DOL grant: )

Training programs for employment advancement include:

The Johns Hopkins Skills Enhancement Program:  A workplace education training program that provides opportunities for employees to prepare for achieving their educational goals (job certification, GED, preparation for technical or college courses), to qualify for promotions and make career advancements (Medical Terminology and Computer Basics).

The Skills-Based Training for Employment Promotion (STEP) Program: The STEP program makes it possible for current working parents to develop the skills necessary to pursue career ladder opportunities; work part-time and attend classes full time (while maintaining full salary/benefits); and receive compensation that will be forgiven based upon working at JHH/JHHS after the successful completion of a training program.

• All employees who regularly work 20 hours or more are eligible for health coverage.  Some  89% of benefit-eligible represented employees have elected medical coverage.

• While health insurance premiums have risen by accelerating rates for six consecutive years across the country, JHH's medical plan increases have been less than the national average of 8-14% during recent years.  The blended increase for the last three years is 10%.  

The JHH Retirement Program is geared to meet the needs of our long-term employees by:

? providing guaranteed, stable income during retirement that is not subject to the stock market’s performance
? providing employees with an opportunity to supplement their retirement income

How does a JHH Employee meet his or her Retirement Goals?

? Retirement Replacement Income has three parts
          ? JHH provided benefits
          ? Social Security monthly payment
          ? Personal savings, 403(b) Savings, etc…

Individuals need to replace 74% - 83% of salary in retirement to maintain pre-retirement life style.

A Bargaining Unit Retiree:
        ? 65 year old employee with 38 years of service
        ? Final Average pay - $34,819
        ? Last Full Year Wages - $37,373
        ? Target Replacement $28,403 (or 76%)
                ? JHH Monthly Pension Benefit             $1,206
                ? Monthly Social Security Benefit         $1,274
        ? Total Replacement Percentage = 80%
        ? Exceeds target replacement by 4% without using personal savings!

 ISSUE 2: Self-Sufficiency Wage

Central to the Union’s position is its demand for a so-called “self-sufficiency” or “living” wage for its members. Under this proposal, outlined in a Union publication, a cook at Hopkins currently earning a base salary of $27,000 a year would earn $55,000 at the end of three years, an amount wildly out of line with market rate for similar jobs in the community.  And this number does not include the costs of benefits that Hopkins pays. Under this proposal, the Union would double its revenue through its member dues.

One area economist asked by Hopkins to review such a proposal has called the union’s chief recommendation “a magnificent specimen of economic half-truth, crafted to befuddle. The idea that above-market wages would help economic development in Baltimore is particularly brazen and blatantly wrong.”

Below are some questions raised by the Union’s proposals and answers compiled with the assistance of area economists:

Q: What does “self-sufficiency” wages really mean?
A: When people talk about a self-sufficiency wage or “living wage”, what they really mean is a sharply elevated minimum wage. Determining what accurately constitutes a living wage is very difficult and subject to many variables. Is the worker married? Does she have children? What are the ages of the children?  Where do they live? These and numerous other factors make it exceedingly difficult to determine a self-sufficiency wage that is universal.

Q: Giving everyone a big raise sounds great. Why is this not a good idea?
A: The arguments for such a self-sufficiency wage appear, on the surface, to make sense. Pay people more money. They generally spend that money where they live, benefiting the community and stimulating new businesses and more economic growth.  But such a scheme can create serious problems.  For example, in most marketplaces, wages are determined by worker productivity. Higher productivity workers generally get paid more than lower productivity workers.  Productivity is based on many factors, including education and work-related experience.  If wages are artificially adjusted up, the unintended consequence could be increased UNEMPLOYMENT. For example, if a fast food owner now has to pay his workers $20 an hour in wages, any workers who don’t produce more than $20 an hour will be quickly replaced by those that do. There is no reason to think a similar situation would not develop in the health care industry or any other industry. If wages were artificially raised beyond what the normal marketplace would set, employers would hire and retain only the most productive workers.  As a result, low productivity workers lose jobs and general economic development is hindered because these workers may not then be able to gain the experience to ever become high productivity workers. A vicious cycle is thus set into motion. 

Q: What makes the health care industry so special in Baltimore?
A: According to the Union, Baltimore’s health care industry has a unique obligation to pay its workers higher salaries because the health care industry is itself unique. But the vast majority of the jobs occupied by union members are NOT unique to the health care industry. Those workers in the Services Employees International Union provide important contributions in such areas as housecleaning, grounds keeping, food preparation, etc., but these same jobs are performed by similar workers for numerous other organizations and companies, including hotels, restaurants and office building complexes.  While these employees may work within the health care industry, they are not directly involved in providing health care.

Q: I still don’t understand how paying some worker more money can hurt the economy.
A: One explanation is that if large pay raises are given to a large group of workers, that money must be recaptured somewhere. What typically happens is that the prices for the service or manufactured product must be increased to offset the additional expenses associated with the wage hike. If hospital wages are drastically increased, then health care itself must become more expensive. Everyone who uses these health care services must pay more. Money that might be spent in the community for services and products must now be spent on more expensive health care.  Thus, higher hospital wages merely redistribute income from health care consumers to union workers with zero regional economic stimulus.

Q: Can’t Hopkins just raise its rates to increase revenues?
A: No. The escalation of hospital costs has been a major public concern. This concern led the Maryland legislature to create the Maryland Health Services Cost Review Commission (HSCRC) in 1971 to set the rates that Maryland's hospitals may charge. Working together, the HSCRC and Maryland's hospitals have successfully slowed the rate of increase in hospital costs that Maryland residents must pay. Hospitals receive an annual “rate order” from the HSCRC that establishes the rates hospitals can charge during the fiscal year.   As a result, The Johns Hopkins Hospital does not have the ability to increase or decrease patient rates in order to meet the growing challenges of the healthcare industry.

Facts about District 1199E-DC SEIU at The Johns Hopkins Hospital

• There are approximately 1,700 employees of the Hospital who are members of the Union, 21 percent of an approximate total of 8,000 Hospital employees.  The Collective Bargaining Agreement mostly covers service and maintenance employees, including environmental service workers, facilities maintenance workers, nutrition workers, nursing assistants, support associates and nursing aides, nursing clerical associates, linen workers, distribution transport aides, supply assistants, etc.

• The Collective Bargaining Agreement does not cover physicians, registered nurses, supervisors, professional staff members, technicians and most other nursing and non-nursing support jobs. District 1199E-DC has no members at any other Hopkins affiliate or institution including The Johns Hopkins University, its School of Medicine, Johns Hopkins Bayview Medical Center, or Howard County General Hospital. These groups are separate entities and are not involved in these negotiations.

• Greater Baltimore Medical Center and Sinai Hospital are negotiating new contracts with the Union during this time period, as well.

While the goal is to assure a good contract without a strike, Hopkins has taken steps to ensure that our patients and their families will, in the event of a strike, continue to receive the same high quality medical care that has characterized Hopkins for more than a century.  In the event of a Union work stoppage, Hopkins will be fully prepared to operate all essential services.

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