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There’s been a load of compromising on the road to my horizon .. Rhinestone Cowboy sung by Glenn Campbell
Friday, the Las Vegas Police Protective Association (LVPPA) came to an agreement with the Las Vegas Metropolitan Police Department (LVMPD). The agreement is in effect a concession agreement. The details and specifics can be found in an article by the Las Vegas Review-Journal. The article is posted several stories down in this blog. There are those who will say that the LVPPA wimped out.
In a perfect world, wages would never be negotiated. They would be determined by a free and open bidding process. Wages would be traded on something like the Chicago Board of Trade CBO). Las Vegas would be listed as "New police officers -FOB Clark County, Nevada." Pay would go up and down daily. There are valid reasons why that will never happen, but we do not need to concern ourselves with those reasons. Wages for Las Vegas police officers, and all other police officers are determined by alternative means. Eventually, the market economy sets the price, but not in real time like commodities. At the time of negotiations, wages are set by a political process with corrections made later. Think of it like a large ship that is being steered through a channel. Any miscalculations are corrected once it is obvious that the ship is going off course.
Las Vegas is in area with few comparable departments, only Henderson and North Vegas. With only three departments, it is not possible to determine the width of the channel that LVMPD operates within, at least not one that would be reliable. The closest markets with large samplings are the San Francisco Bay and Los Angeles Basin. The standard deviation for these two markets combined is 8%. This means that two-thirds of the agencies are within 8% of the average. This translate into a channel width of 16% (92% to 108%). For discussion purposes, I will assume that this 16% channel is applicable to Clark County, Nevada. The forces that determine where an agency falls within this 16% ban are mostly political.
In 1944, the peak production year of World War II, the United States produced $15,623 (restated in 2008 dollars) in goods and services for every person the country. For 2008, we produced $46,241 per capita. This is part of the annual growth rate of about 2.16% per year above inflation of 3% per year since 1929. Wages have gone up with this dramatic growth. Everyone moved up with the economy. Some got there sooner and some rode in first class, but everyone was on the bus. This bus is 16% wide. What determines who is riding at 108% and who is riding at 92% is politics. Who do you think rides at 108%? You do not really think that it is the union that is suing, arbitrating and complaining 24-7?
The miraculous growth of our economy was not a straight line up. Most of the years were up, while a few were down, but the long-term trend was a steep incline upward. 2009 is a down year. When things go South the citizens see things differently for local government than they do for their households. They expect local government to make draconian cuts - impossible cuts. Management and elected officials who ignore this irrational concept are soon turned away. So what do you do when this occurs and the management of your city asks for concessions? I am afraid that most of you go into some type machoism posture - hanging tough. Yeah, real men do not give up anything. Do this and you will eventually find yourself at 92%. The smart guy plays along and helps the management and the politicians, realizing that it is only a temporary retreat. Retreat is taught at West Point as a strategy. Do you think it is called "How To Lose A War 101"? The thing that you must always do is to obtain the quid, pro, quo, or as the Mayor of Las Vegas, Oscar Goodman would probably say "get their marker".
Most of you need no more. You have figured it out. The rest of you, keep reading. The Las Vegas Police Protective Association have done a good job for its members. I can assure you that Chris Collins and the rest of the executive structure of the LVVPA are not lay down artists. Neither is the management of the City of Las Vegas and Clark County.
Is a concession contract a sign of weakness? I do not think so. I takes courage. Thinking, planning and acting strategically is not well respected in our society of instant gratification. What matters is not where you will be in three months, but you will be in five years and ten years. A real leader is one who can even think and plan for the future that will not include him.
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