I had to miss Friday’s bargaining session, but it seems the administration finally responded to the GTFF’s economic proposal by repeating their previous proposal, throwing in an additional 0.5% per year to make it an even 1%. I know a few economists, and they tell me the western US consumer price index increased by 3.1 % last year, so as might have been predicted this did not go over well.
Likewise, while the administration’s proposal to move some of what it pays for GTFF health care (by all reports it’s a cadillac plan that puts PEBB to shame, although the GTFF did manage to cut what UO paid for it last year) and put it in salary, while optimal to a rational expected-income maximizing risk-neutral agent, is not so optimal under the assumption of utility-maximization and the resulting risk aversion that has been the working model of economists since before there were such things as economists (Bernoulli, 1738). Yes, I know that newer models of loss aversion from psychologists and behavioral economists make this result stronger, but they are not needed to predict the response here.
The messages from the GTFF and the administration are below the break.