The Boston Newspaper Guild’s insurance consultant, Bonnie Hanisch, has sent an e-mail to Guild members at the Boston Globe showing that they could bring home slightly more money if they approve a package of concessions totaling $10 million when they vote on July 20. (Media Nation obtained a copy earlier today.)
The cost, though, is high: a brutal reduction in health-insurance and retirement benefits. In fact, the consultant’s math is based on an assumption that the average Guild member would choose to reduce her or his 401(k) contribution from 10 percent of salary to 4 percent if the package is rejected, as a similar package was on June 8. Hold the 401(k) contributions steady, and employees would actually make less money with a “yes” vote than with a “no” vote.
So why would anyone vote yes? If the concessions are approved, salaries will be cut by 9 percent (including eight unpaid days off). If they are rejected, the 23 percent pay cut implemented after the “no” vote remains in place.
The e-mail has led to some speculation that the Guild is quietly pushing for another “no” vote, the Phoenix’s Adam Reilly reports. Poynter Institute business analyst Rick Edmonds describes the situation facing Guild members as “a choice between a punch in the gut now or being slapped upside the head later,” with a “yes” vote merely deferring some of the pain.
Yesterday I had a chance to talk with a few Globe staff members about the vote and whether they think the concessions will be approved this time around. The rough consensus: yes, but there is deep anger at the New York Times Co. over its highhandedness and lack of straightforwardness in communicating with Globe employees.
Look for the vote to be close once again.
The full text of Hanisch’s e-mail follows:
The Executive Committee, along with the Governing Board, has asked that I reiterate some of the questions that came up this weekend, along with an example of how you could mitigate the 23% if the contract is not ratified.
First, our medical plan renews on May 1st of each year. Our premiums increased from Harvard Pilgrim by approximately $500,000. At that time, there was an estimated $300,000 in the Taft Hartley Health Fund, and we were expecting an additional $200,000 of new health fund quids that had been negotiated in the last bargaining negotiations. Hence, there was no rate change/contribution changes to the employees.
On April 7th, we began the $10 million concession meetings with the company. Ultimately, part of the concessions was approximately $1.3 million in health care quids that had been negotiated over the past 20 years.
What this means to you — whether the contract is ratified or not, your health insurance contribution rates will increase next May 1, 2010. Based on our estimates, if the contract is ratified, we need $2.5 million of employee contributions. If the contract is not ratified, we need $1 million of employee contributions. (Health care increases are based on the medical claims of this group and those that are participating. These estimates are based on the same health care costs, and an estimated 5% increase.)
If the contract is not ratified, here is an example of how to reduce your costs:
Average Salary: $58,000
Family Health Insurance: -$ 5,492
401K Deductions (Average person in BNG is 10%): -$5,800
Taxes (FICA, FUTA, SUTA, Fed; est. 30%): -$14,012
8 Furlough/Unpaid Days: -$2,231
If Not Ratified
Average Salary: $44,660 (23% reduction)
Family Health Insurance: -$1,170
401K Deductions (change to 4%): -$1,786
Zero Furlough/Unpaid Days: $0
Difference of $1,270 or $24.42 per week.
If the contract is not ratified, you keep the $1.3 million of quids; you keep the pension plan; you keep the retiree health insurance; you keep the 401(k) match, etc.
If anyone has any questions, please feel free to contact me at xxx.
Bonnie M. Hanisch, CEBS
Boston Insurance Group
*As alert Media Nation commenter Tony points out, Hanisch’s math is a bit off — the number should be $30,465.