How Can Interest-Based Bargaining Improve our Inner City Economies?

Over the past few weeks, I’ve attended both our own Inner City Economic Summit and the CEOs for Cities annual meeting. These meetings convened top-level private, civic and nonprofit leaders from across the country to discuss ways to improve economic development initiatives in our cities.

A prevailing theme from both conferences was the need to improve education. At the Summit, education focused primarily on workforce development initiatives and creating a strong education pipeline (particularly for jobs in the industrial sector). At the CEOs for Cities conference, I learned about improving K-12 education, community colleges and investing in our research institutions. But the same conclusion could be drawn from both events: education is vital to the health of our inner city economies. 

Last week, I visited The Boston Foundation for the release of Toward a New Grand Bargain, a report by Northeastern University’s (and my graduate school advisor) Barry Bluestone and Professor Tom Kochan of MIT.  At its core, the report acknowledges that cities are in a time of fiscal austerity—and as such, public sector unions are being attacked, and in some cases, dismantled. In order to protect total breakdown between political leaders and civil servants, we should move from a system of adversarial bargaining to “interest-based bargaining” (IBB). The report focuses primarily on doing so in Massachusetts’ educational system; but the same approach could be applied to all public unions.

According to the report, IBB is “an adaptation of basic problem solving techniques, starting with a clear statement of the problem (each party’s interests or objectives), a joint analysis of the data needed to evaluate root causes of the problem and alternatives for addressing it, articulation of the criteria to be considered in choosing among alternatives, choice of an option, and implementation, monitoring and evaluation of the results achieved following implementation.” A move away from demand- / counter-demand bargaining would result in anywhere from 15-20% increased productivity, better services and decreased taxpayer burdens.

One of the chief components of IBB, when implemented in our school systems, is that it must include some sort of “peer assistance and review” (PAR) process. This review process, coupled with professional development would lead to greater teacher compensation, promotions and assignments. In cities like Baltimore, Toledo, and New Haven this model has already proven a success.

So, what does this have to do with our cities?

First, we often hear that our inner city teachers face an uphill battle: they claim that they teach the most difficult students and are paid the least. As a result, some of our cities’ best teachers either move to the suburbs or they leave the teaching profession entirely. A system of IBB would reduce the stringency of contracts (for instance, the report notes that there are 80 pages in the Boston Teacher’s Union contract dedicated entirely to “staffing” and “working conditions”) and provide for performance-based rewards and upward mobility potential.

Second, the report finds that when IBB is used in public sector contracts, it increases productivity anywhere from 15-20%. Increased productivity means taxpayers are paying for more efficient services and it will save taxpayers money.

Third, if we can eliminate the tug of war between unions and administrators, the focus can turn to who deserves it: the students. When students get more attention, they tend to do better in school. When our students are better prepared in school, they are more likely to pursue higher education and better compete in the job market.

At the gathering of urban leaders at the ICIC Summit and CEOs for Cities conference, attendees all recited the need to improve our educational systems (both K-12 and higher ed) in order to foster economic growth and development in our inner cities. While a transition to IBB is only the very first step in improving urban education, it is a move that can be promulgated during this time of fiscal constraint. 

BY Amanda Maher on October 26th, 2011

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