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Politics & Policy

San Francisco public employees get raises in new labor deal—despite $800M deficit

People marching in a protest with signs and blue union shirts, rallying against privatization.
San Francisco's public employee unions are nearing deals with the city that would include pay increases over the next three years. | Source: Estefany Gonzalez/The Standard

After months of negotiations, San Francisco’s public employee unions are closing in on new contract agreements that include wage increases even as the city grapples with a budget deficit in the hundreds of millions of dollars.

By Monday, the city had struck tentative deals with unions representing over 20,000 workers, including the Service Employees International Union Local 1021, International Federation of Professional and Technical Engineers Local 21, Laborers Union Local 261, the Deputy Sheriffs' Association and Transport Workers Union Local 200, according to the Mayor’s Office.

Specific details surrounding each union’s deal weren’t immediately available, though Local 21 told The Standard that its roughly 6,000 members would be receiving a wage increase of 13% over three years. 

It wasn’t immediately clear whether the other unions would receive the same wage increase. However, the parties have been negotiating as a coalition, and the others will likely get a comparable deal. Local 21 said its wage bumps would be broken up during the three years.

A person in sunglasses at a rally, holding signs that say "FIX OUR CITY" and "STAFF UP SAN FRANCISCO."
Union members and the Board of Supervisors still need to approve the contract agreements. | Source: Michaela Vatcheva for The Standard

“Wages are important,” said Kim Thompson, Local 21’s executive committee member, in an interview on Monday. “They help retain and recruit qualified workers.”

The agreements—which impact workers in engineering, IT and landscaping—still need approval from both the union members and the Board of Supervisors, according to the Mayor’s Office. The city is still in negotiations with transit operators and nurses. 

Current contracts are set to expire on June 30.

In January, as labor negotiations heated up, hundreds of city employees spilled out onto City Hall’s steps, with unions arguing that the city’s thousands of vacant positions have created untenable workloads and a reduction in the quality of services for residents.

Another point of contention was what unions describe as irresponsible spending on private contractors by the city. Local 21’s contract announced on Monday includes stipulations regarding third-party workers for certain jobs, Thompson said. 

The negotiations come at a time when the city’s budget is dwindling. The latest projections show San Francisco with a $789.3 million deficit over the next two years. 

A city report describes ongoing economic uncertainty, employee costs and diminishing state and federal funding contributing to budget uncertainty in the coming years. 

In a statement on Monday, Mayor’s Office spokesperson Jeff Cretan wrote that the city would be able to make the negotiations work even with the looming deficit.

“These open contracts have been taken into account as part of our budget planning for the upcoming two-year budget and the Mayor will deliver a balanced budget submission to the Board of Supervisors in the coming months,” he wrote.

As the deadline for contract negotiations neared this spring, unions were threatening a strike that could have impacted a wide variety of city services. 

Public workers haven’t gone on strike in San Francisco since the 1970s. After a city-initiated prohibition on striking that lasted decades, the California Public Employment Relations Board ruled in July 2023 that the ban was unlawful.