Manhattan Institute for Policy Research.
search  
 
Subscribe   Subscribe   MI on Facebook Find us on Twitter Find us on Instagram      
 
 
   
 
     
 

New York Post

 

Trainwreck Of A Contract

August 12, 2009

By Nicole Gelinas

THE MTA just managed to give away the store in the new Transport Workers Union contract -- and they couldn’t have done it without Albany and City Hall.

This, in the midst of the worst fiscal crisis in decades.

Our political leaders have wasted a historic chance to win labor flexibility that would have benefited riders and taxpayers. Back in early 2008, the stars seemed aligned for the MTA to get a good three-year deal out of its 35,000-strong city labor force.

You couldn’t ask for better conditions:

* The city and the state were (and are) facing multibillion-dollar budget deficits for years on end. The MTA needed a multibillion-dollar bailout.

* New Gov. Paterson wanted to take a tough line on spending.

* The TWU was at its weakest -- financially crippled after an illegal 2005 strike, and suffering political schism.

* The MTA had competent leadership that wanted to do the right thing, including cutting costs reasonably without harming service.

But yesterday, a state Public Employment Relations Board arbitration panel handed down a new three-year contract between the MTA’s subsidiaries and the TWU that would be generous in boom times.

The union got nearly 11.3 percent in raises over the next three years. Yet inflation over the last decade has averaged just three-fourths of that. And recently, inflation and income growth have flirted with negative territory.

In this economy, with the average TWU member earning more than $64,000 (plus great benefits), the MTA could’ve maintained workforce quality even with no pay hike at all.

This giveaway eventually will cost the MTA $600 million a year.

Plus, the arbitrators ordered an MTA giveback on health benefits. Since 2005, union members have had to contribute 1.5 percent of their wages, including overtime, to health-care costs -- an average of nearly $900 a year. Now, the levy won’t apply to overtime, saving each worker nearly $300 a year and costing the MTA at least $10 million.

How did we get here?

Start with political cravenness. Private-sector employers have slashed wages and jobs -- but Gov. Paterson last year refused to back up the MTA in its inconsistent attempt to hold the line on wages at best.

At the same time, Mayor Bloomberg -- though he later complained about the MTA’s move, under pressure from Paterson, toward more generosity -- handed out 4 percent raises to the city workforce last fall. Paterson could plausibly claim he was just following the same (reckless) pattern.

The MTA is also at fault. First, the agency unilaterally let the TWU off the hook for its illegal 2005 strike: In late 2007, it encouraged a judge’s decision to let the union once again begin automatically collecting dues from its members, replenishing its financial coffers.

Then it proved eager to please the pols in Albany and City Hall. It started abandoning its initial, responsible plan even before late last year, when it threw the contract, then under negotiation, into state arbitration.

Arbitration wasn’t in the interests of riders or taxpayers: All it did was put us on the path to these giveaways, in such a way that all the politicians can avoid the blame. MTA management didn’t have to go along with what Albany and City Hall wanted. It should have just let the union suffer for a while.

Yes, then-CEO Elliot Sander, a Spitzer appointee, would’ve risked losing his job if he crossed the new governor. But Paterson fired him a few months later, anyway.

The final ingredient was the arbitration panel selected by the state’s Public Employment Relations Board to draw up the contract, supposedly independent of political forces.

One arbitrator, Dall Forsythe, tried his best (see below). But the deck was stacked against a fair contract.

One of his fellow arbitrators was the TWU’s Roger Toussaint. And the third, former Abe Beame official John Zuccotti, chose the union over taxpayers.

Finally, there’s the TWU concession that the MTA gave back.

Last year, the TWU tentatively agreed to let trains on two lines -- the No. 7 and the L -- run with only a driver, instead of a conductor and a driver. This isn’t a good idea in all cases. But, with appropriate provision for security and emergency response, it’s fine -- and could save tens of millions a year.

But the flexibility provision got left out of the official contract. The MTA did get a lesser concession: The union finally agreed to let station cleaners do basic maintenance work, instead of having to call better-paid workers from far-off stations just to change light bulbs. But the new health-care cost likely will be three times greater than the savings here. The change is long overdue, anyway.

Why did the MTA actively help arbitrators give away the store?

The MTA’s “interim leadership” -- LIRR chief Helena Williams -- has seemed more transparently willing to make decisions that harm the transit system but please the politicians, as her giveaway to Atlantic Yards developer Bruce Ratner showed.

Perhaps, in that light, the Atlantic Yards giveaway was just an advance taste of yesterday’s gift to the TWU.

The worst thing about the arbitrators’ decision was its suggestion how the MTA could pay these new costs: essentially, take money away from stimulus and other funds meant for its capital-investment program, especially new projects. The arbitrators said “the MTA could manage its capital programs to meet better its overall financial requirements” -- bureaucratese, apparently, for choosing parochial political interests over the city’s

future.

Original Source: http://www.nypost.com/seven/08122009/postopinion/opedcolumnists/trainwreck_of_a_contract_184077.htm?page=2

 

 
PRINTER FRIENDLY
 
LATEST FROM OUR SCHOLARS

Reclaiming The American Dream IV: Reinventing Summer School
Howard Husock, 10-14-14

Don't Be Fooled, The Internet Is Already Taxed
Diana Furchtgott-Roth, 10-14-14

Bad Pension Math Is Bad News For Taxpayers
Steven Malanga, 10-14-14

Book Review: 'Breaking In' By Joan Biskupic
Kay S. Hymowitz, 10-10-14

Neo-Victorianism On Campus
Heather Mac Donald, 10-10-14

Charter Center Advertises for More English Language Learners
Eliza Shapiro, 10-09-14

Workers Interests Are Ill Served By ‘Tipped Wage’
Diana Furchtgott-Roth, 10-09-14

Knowledge Makes A Comeback
Sol Stern, 10-09-14

 
 
 

The Manhattan Institute, a 501(c)(3), is a think tank whose mission is to develop and disseminate new ideas
that foster greater economic choice and individual responsibility.

Copyright © 2014 Manhattan Institute for Policy Research, Inc. All rights reserved.

52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494