All hail Carlsbad: City abandons automatic ‘step’ raises

June 21, 2013

By Chris Reed

It may stun people under 30, but inflation used to be a consistently brutal factor in American life. Until Fed chair Paul Volcker mostly squeezed inflation out of the U.S. economy in the early 1980s, it had periodically squeezed workers and their families for decades.

This was one factor in the adoption of automatic “step” pay increases for public employees. They weren’t so much raises as cost-of-living increases. But for the past 30 years, they’ve pretty much been raises, leading to government employees making far more than those in comparable posts in the private sector.

Now a local government finally has figured out this doesn’t make sense. It’s Carlsbad in north San Diego County. This is from a U-T San Diego editorial:

“In a move that may be unprecedented in California, Carlsbad and its largest employee union have agreed to a new contract that at the end of this year will do away with so-called step and longevity pay raises — increases awarded essentially for just showing up and lasting a long time on the job. A system of merit pay increases will be introduced in 2015.

“The new contract also opens the door to outsourcing of city services if the city can save money by doing so.

“In return, Carlsbad’s City Council gave the City Employees Association, which represents about 350 nonpublic-safety employees, a 3 percent across-the-board salary increase this year and next. After that, a 4 percent base pay matrix will be used to award raises to the most deserving employees as part of a pay-for-performance system, according to the agreement approved by CEA members in a vote last week and ratified Tuesday night by the City Council. Salary and benefits will be benchmarked not just against other cities, but also against the private sector — another big change.

“The new contract also gives Carlsbad ‘the right to contract out any or all of the services currently being performed’ by CEA worker … .”

 This sounds great but could end up blowing up if all workers’ performance is adjudged to be great, as routinely happens in teachers’ evaluations and in now-scrapped bonus programs, such as one used by Orange County and the city of San Diego’s water department.

Nevertheless, it is still a giant step by one city in the right direction.