New Jersey Interest Arbitration Reform Act

Abstract

In 1996 the Arbitration Reform Act (ARA) made significant changes to New Jersey's system of binding interest arbitration for public safety employees A survey of management labor relations officials and an analysis of arbitration awards was conducted The survey results offered mixed support for meeting the legislative goals, including increasing arbitrator consideration of organizational fiscal capacity and reducing the rate ofgrowth in public safety compensation The analysis of awards indicated that the mean number of monetary and non-monetary issues submitted to arbitration increased, while in contrast to the survey results the average arbitrated wage increase decreased from its peak in the early nineties The strong economy with its high levels of economic growth, moderate inflation and low unemployment, in conjunction with enhanced arbitrator focus on fiscal capacity, are favorable factors for continued future moderate wage increases Recommendations for improving the arbitration process are provided

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