For decades, United States Steel was this city’s dominant employer, but now the biggest employer is the University of Pittsburgh Medical Center, with its 22 hospitals and 62,000 workers.
As if to highlight how the service sector has supplanted manufacturing, UPMC’s letters are emblazoned 20 feet high atop the city’s tallest building, the U.S. Steel Center Tower.
And just as labor unions famously clashed with Andrew Carnegie, UPMC faces its own labor showdown. The Service Employees International Union is seeking to organize more than 10,000 of UPMC’s service workers, and demanding that the hospital system be a leader, much like U.S. Steel once was, in raising wages.
The union is expert at making life unpleasant for employers, and it has not spared UPMC. The union staged a traffic-clogging protest outside UPMC’s headquarters and helped create community groups that accuse UPMC of paying poverty-level wages.
The union repeatedly argues that the chief executive’s $6 million in compensation last year was out of line for a nonprofit, and it constantly jabs UPMC for leasing a $50 million corporate jet.
Not stopping there, the union is backing Pittsburgh’s efforts to strip UPMC of $20 million in annual tax breaks on the grounds that it is a profit-seeking company. If it were a nonprofit, the union and city officials ask, why does UPMC, with $10.2 billion in revenues last year, run for-profit facilities in Italy, Ireland and Kazakhstan?
Hospital officials deny the union’s assertions.
W. Thomas McGough Jr., UPMC’s chief legal officer, defended the tax breaks, saying the hospital system provided $887 million last year in charity care, donations for scholarships and subsidies to its medical school. The corporate jet, he said, is largely used to fly teams of executives and doctors to Italy, Kazakhstan and other out-of-the-way places. He said the for-profit operations overseas provided $400 million in profit to bolster the nonprofit activities.
“These exist not to send jobs to Italy,” Mr. McGough said. “They create jobs in Pittsburgh and bring money back here to serve our core mission.”
UPMC officials say the company’s service employees, like cafeteria workers and janitors, are paid $12.81 an hour on average, which they say is above market for Pittsburgh and well above the $10.10 minimum wage President Obama is seeking.
Christoria Hughes earns $12.85 an hour after six years as a food-service worker at UPMC Presbyterian Hospital. “That sounds good on paper, but when you bring it home, it’s less than $350 a week,” said Ms. Hughes, who has money deducted for health insurance and is helping to raise several granddaughters. “UPMC claims they pay everybody these fantastic wages. It’s not enough to live in Pittsburgh.”
Ms. Hughes was arrested in February as were 11 members of the clergy; they refused to leave UPMC’s headquarters, insisting on meeting with Jeffrey A. Romoff, the company’s chief executive.
“UPMC is a world-class medical facility, we’re asking them to strive to be world-class in their labor relations,” said one of those arrested, Rabbi Ronald Symons of Temple Sinai. “We know that you can’t raise a family on those wages.”
Other unions are backing the service employees. “It’s important that the labor community demonstrate to UPMC that this is still a union town,” said Leo W. Gerard, president of the United Steelworkers union.
The union-versus-UPMC battle sometimes seems less a traditional unionization battle than an experimental labor effort to demonize, irritate and embarrass the hospital system into adopting a $15-an-hour wage floor, up from the current $11. If UPMC adopts a $15 minimum, union officials say, it will become a model for Pittsburgh and other cities where hospitals are the largest employers.
UPMC officials are not shrinking from their fight with the union. “I expect very little from them and they exceed my expectations,” said Gregory K. Peaslee, UPMC’s senior vice president for human resources.
“We are paying our employees fairly, providing them great career opportunities, and great benefits,” he said, pointing to the tuition assistance plan, pension and 401(k) match. “We’re providing a starting package where, if you have family health coverage, is worth $22 an hour.”
Lou Berry, a housekeeper earning $12.07 an hour at UPMC Montefiore, said that number was inflated and added that some workers could not afford college, health insurance or contributing to a 401(k).
Mr. Berry owes UPMC $300 for a colonoscopy and said the company should erase employees’ medical debts. “It’s like owing money to the old company store,” he said.
UPMC has responded vigorously to the two-year-long unionization drive, sending out anti-union messages that are often displayed on hospital computers’ screen savers. The messages include, “You can say NO to the S.E.I.U., it’s your right,” and “Knock knock, who’s there? The S.E.I.U. Do you need to answer if the S.E.I.U. shows up uninvited at your home? No.”
Mr. Peaslee said, “The question isn’t, ‘Why don’t we want S.E.I.U.?’ It’s not our choice. Our employees don’t want them.”
Mary Kay Henry, the union’s president, says the unionization drive is going well. “This campaign has made incredible strides,” she said. “It has shined a light on how service workers are earning poverty wages.”
Pittsburgh’s mayor, Bill Peduto, said in an interview that he had urged UPMC to pay more and not to “intervene unduly” in the unionization drive. “It’s the largest employer in the state of Pennsylvania,” he said. “They have the means to help their workers break the cycle of poverty and join the middle class. They probably have more of an ability to do that than any other entity.”
UPMC officials suggest that the S.E.I.U. targeted the company because it was already under fire. It has been criticized for shutting its hospital in Braddock, a struggling suburb, and refusing to treat those insured by Highmark, Pittsburgh’s most popular health plan.
“People don’t like UPMC in this town,” said Marty Griffin, a talk-radio host in Pittsburgh. But he said the demand for $15 an hour gets little sympathy. “People say, ‘If they want $15, they should go back to school.’ ”
The union points to an M.I.T. study showing that a worker raising one child in Pittsburgh needs to earn $17.01 an hour to meet minimum living standards and that two adults raising two children would each need $16.98 an hour.
“More than half of UPMC’s service employees earn below what independent experts consider a family-sustaining wage,” said Neal Bisno, president of S.E.I.U. Healthcare Pennsylvania.
Mr. Peaslee said a $15-an-hour minimum would cost UPMC $600 million a year and wipe out its operating margin of 1 percent to 2 percent. “There is a fundamental difference of opinion between us,” he said. “Should every job in America individually support a family of four? I think that’s a great notion, but it’s not realistic.”
Last October, the National Labor Relations Board accused UPMC of illegally firing four workers for pro-union activity and of intimidating, interrogating and threatening workers seeking to unionize. One accusation was that UPMC retaliated against workers for testifying before the labor board.
UPMC’s Mr. McGough accuses the union of telling pro-union employees to underperform at work so they will get disciplined, allowing the union to claim that they were punished for pro-union activities. He said it was “surprising they haven’t been able to provoke us into more activities that they claim are illegal.”
Veronica Shields, a pro-union pharmacy technician, said many more workers would be backing the union if not for UPMC’s behavior. “There is a palpable fear,” she said. “A lot of workers support the union quietly but they don’t want to put their face out there. They worry UPMC will come after you.”
But Julie A. Decker, a UPMC employee who markets the hospital system to employers, said unionization was not needed. “We’re not back in the days where factories are exploding and workers are being exploited the way they used to,” she said. “I don’t think the union’s gaining traction.”