By Jon Ortiz
Published: Friday, Oct. 8, 2010 – 12:00 am | Page 1A

The new labor deal between Gov. Arnold Schwarzenegger and California’s biggest state employee union marks a significant turn in the state’s labor drama – and not just because it affects about half the state’s unionized work force.

Wednesday’s near-midnight announcement of a tentative pact with Local 1000 of Service Employees International Union underscored the mounting pressure on labor to cut deals now or risk greater losses.

Even Democratic legislators, usually labor allies, appeared poised Thursday to close California’s $19 billion budget gap with legislation allowing furloughs for state workers whose unions don’t agree to contract concessions.

Meanwhile, SEIU’s new deal made the 95,000-employee union the seventh to reach a deal in the past few months. Its agreement, like the previous six that cover 37,000 workers, lowers pension promises for new hires and boosts what current employees pay toward retirement. Four of those earlier deals include unpaid time off, as does the SEIU deal.

“The fact the biggest union has done this means that you can safely say nearly all the rest will come to agreements one way or the other,” said Daniel J.B. Mitchell, a state labor expert at UCLA’s Anderson School of Management. “And the SEIU agreement sets the ceiling for what everyone else can expect to get.”

Six unions representing 63,000 employees – from engineers and scientists to park rangers and lawyers – are still working under expired contracts. All have talked with the Department of Personnel Administration about new pacts.

Even the 33,000-member California Correctional Peace Officers Association, which reached impasse three years ago, talked contracts over the summer. The informal discussions went nowhere.

“The unions realize they’re better off accepting cuts now or they risk setting themselves up for deeper cuts in the future,” Mitchell said, because California’s fiscal outlook is bleak and GOP gubernatorial candidate Meg Whitman and other politicians have argued for deep cuts to government pay and benefits.

The budget bill deputizes Schwarzenegger – and the next governor – to furlough workers in unions without contracts. Democrats want the unions to negotiate concessions to save nearly $900 million in costs.

The state estimates that SEIU’s three-year agreement, which its members and the Legislature must ratify, will save $383 million in the current fiscal year.

The deal adds three percentage points to the 5 percent to 6 percent of pre-tax wages that current employees contribute toward their pensions. It also cuts retirement benefits for new hires.

The union also accepted unpaid leave days equal to a pay cut of roughly 5 percent over 12 months and agreed to absorb nine furlough days that started in August and end this month. The deal eliminates Lincoln’s Birthday and Columbus Day as paid holidays.

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