San José at a Stalemate With Its Largest City Employee Union

Just three years after disagreements over pay nearly led to a historic work stoppage, contracts with the unions representing more than 3,000 city workers expired on June 30.

City officials contend that with ongoing budget deficits, they are unable to offer more than a 3% annual raise in each of the next three fiscal years — an increase union leaders argue would leave workers unable to keep pace with the rising cost of living.

“We tried to put across proposals that were reasonable but also recognized that it’s an expensive place to live in the Bay Area,” said Charles Allen, union representative for MEF. “The costs that city employees incur — increased gas prices, increased food prices, just generally increases all around — were not really addressed by the city’s proposal.”

MEF and IFPTE countered the city’s offer with a proposed wage hike of 4% in the current fiscal year, followed by 4.5% in 2027-28 and 5.5% in 2028-29.

Allen said his union’s members have not yet taken a vote to authorize a potential strike, but are discussing the possibility.

“We obviously remain optimistic that mediation might be able to get us to where we need to be, but at this point we’re out of contract,” he said. “Once we’ve gone through the process, then the membership does have the ability to take a strike vote and in fact go on strike.”

A work stoppage could limit library services, summer activities and permit processing in a city that is already one of the most thinly staffed in California. A Mercury News analysis in 2024 found San José has 112 residents per city employee; among California’s 10 largest cities, only Bakersfield has a lower staffing ratio.

San José Mayor Matt Mahan said the city has little flexibility to offer higher wages after recently approving a budget that closed a $50.3 million shortfall by tapping reserves and cutting more than a dozen positions.

City budget analysts are projecting an ongoing shortfall of $26.8 million in 2027-28 and $11.8 million in 2028-29.

“The city is offering a fair deal,” Mahan said. “To go any higher than a 3% raise over the next three years, we would have to make significant service cuts.”

While negotiations are being led by the Office of Employee Relations, which reports to the city manager, any tentative agreement will need to be approved by the City Council.

In 2023, Mahan was the lone vote on the council against new contracts for MEF and IFPTE — arguing that the wage hikes of 14.5% over three years were beyond what the city could afford.

“I think the council has just been through a difficult budget cycle where some of the members of the council were expressing a little bit of regret in private over deals that I pointed out three years ago were likely to set us up for service cuts,” Mahan said. “To do that again in this moment would be a mistake.”

Beyond wages, the unions and city remain apart on the use of artificial intelligence.

Under an MEF proposal submitted in March, the city would be barred from using technological systems “for the purpose of eliminating bargaining unit work” and from using AI “for new programs, positions or functions that could replace future new bargaining unit positions.”

The city’s counterproposal offered the consideration of training and reassignment prior to layoffs, in cases “where artificial intelligence will result in workforce reductions.”