Robert Wilson, pictured here with his granddaughter at his Uptown home, is one of more than 50 employees laid off from the Harrisburg Parking Authority last year.
On a Monday morning last December, two days before Christmas, Robert Wilson finished his final shift at the River Street garage, where he had worked as a night custodian since 1989.
As regular customers arrived from their morning commute, he told them it would be his last day. Around 8 a.m., he headed to the maintenance shop and dropped off his keys, his garage pass and his spare uniforms—dark blue pants, maroon shirts. Then he went home to hand off the car to his wife, who was starting her work day.
Wilson is one of more than 50 employees of the Harrisburg Parking Authority who lost their jobs last year. Now, as state unemployment benefits run out and the authority’s monthly supplemental payments become his only income, Wilson is once again taking stock of how his 25 years of service came to end.
In the fall, as the city edged towards a resolution of its debt crisis, Wilson and his co-workers confronted an unpleasant reality. The city needed to generate hundreds of millions of dollars to pay off bad debt, and the parking system was one of its only assets with any long-term value. But union jobs like Wilson’s, with good wages and benefits, contributed negatively to the system’s potential value.
In September, members of Wilson’s union, AFSCME Local 521, voted 43-0 in favor of a “transition agreement” outlining the terms of the transfer to the system’s new operators. It described two options: continued employment with a 10-percent pay cut, with no guarantees of wage or job security after one year, or a severance package that included a lump-sum payment and unemployment supplements for up to a year.
David Gash, a retired union staff representative who was involved in the negotiations, described the severance package as unusually generous. “I’ve had companies close and not give their employees anything,” he said. All but five employees took it.
Typically, a laid-off worker in Pennsylvania collects unemployment at a rate of about half his or her former salary. Under the union agreement, however, the Harrisburg Parking Authority would supplement its former employees’ state checks, bringing their total compensation to the level it had been when they were employed.
The agreement also stipulated that laid-off employees would be reimbursed for the costs of health insurance, at a rate of 90 percent of the parking authority’s previous contributions to their monthly premiums. Both sets of supplements would be paid out of trust funds, administered by the authority’s handful of remaining employees. The authority would make payments out of the funds—$588,000 for unemployment supplements, $360,000 for insurance reimbursements—for up to one year, at which point the benefits expired, and any leftover funds reverted to the authority.
For Wilson, as for others, the severance package was vastly preferable to the uncertain promise of continued employment under the new private operator, Standard Parking.
“How am I going to go from $14 an hour to $7.25?” he asked, reflecting a belief that, once a year had passed, Standard would be free to reduce its compensation to minimum wage.
Even so, he found the transition negotiations bewildering, such that he and his sister, Jackie, also a former parking employee, wound up believing they’d been promised much more than they had.
For one thing, while the agreement promised unemployment supplements for up to one year, there was an important caveat: the parking authority would pay a maximum of 50 percent of each past employee’s former earnings. State unemployment benefits would theoretically make up the other 50 percent—but those would only last for 26 weeks. Without the federal government’s emergency extension of benefits, which the U.S. Congress did not renew, in six months the authority’s supplements would be all he earned.
Additionally, the insurance reimbursements were just that: reimbursements for premiums, which laid-off employees would have to pay first on their own.
With respect to the insurance agreements, yet again, the severance agreement was meant to be generous. Laid-off employees can usually obtain so-called COBRA coverage, under a federal law giving them the right to continued benefits under their former group health plans. But they often wind up with insurance premiums that, absent the contribution from an employer, are difficult to afford.
The Parking Authority severance sought to mitigate the pain by guaranteeing employees a 90-percent reimbursement of the authority’s prior contributions to their premiums. To receive the reimbursement, though, former authority employees had to sign up for COBRA or other continued coverage themselves.
One way or another, the Wilsons missed the message. As they tell it, they relied on assurances from the union and from management that they would continue to receive health coverage. Representatives at the authority, however, say that employees were clearly told about the nature of the reimbursements at meetings in the fall. In any case, Jackie didn’t learn she had no coverage until March, when she took her daughter for a maternity checkup.
A generous severance package is still a severance package, and people close to the labor negotiations will generally acknowledge that parking employees caught a tough break. Effectively, they suffered the consequences of a debt crisis they played no role in creating.
“They ended up paying the price. They were all good employees, all good people,” David Gash, the AFSCME staff representative, said. “It was terrible. Everybody felt bad about it.”
