Unions & the mayoral race
In September 2008, Lehman Bros. collapsed, sending the world into economic meltdown and calling time on a quarter-century-long Wall Street boom. But the crash of New York Citys gravy train hardly figured in the 2009 mayoral election.
Four years later, this is the real post-Lehman election. Have labor leaders and their favored Democratic candidates gotten the memo?
In 2009, the full implications hadnt sunk in it wasnt obvious we were facing a permanent cut in what Wall Street pours into the citys tax coffers. Sure, Mayor Bloomberg ran on vague notions of fiscal responsibility but he didnt try to hit home the ugly fact that, absent an ever-growing Wall Street, the city cant afford to spend what it does.
Yet it cant. From 2000 to 2008, thanks to the financial bubble, New Yorks major tax revenues grew by 73 percent or 39 percent more than inflation.
That kind of growth had never happened before. Yet that growth (and the money left over after the bubble burst) was the only reason New York could cover its costs for workers pension and health care costs that now run $17 billion a year, more than triple the total of 12 years ago.
The citys crazy revenue growth is gone. After inflation, todays tax take is only 1 percent above what is was when Lehman fell.
This is not because the local economy is ailing; its actually pretty good. As state Comptroller Tom DiNapoli notes, last year on Wall Street was "among the most profitable years on record." Still, Wall Street "regained only 19.5 percent of the jobs lost during the recession," explaining why personal-income taxes remain below peak.
One mayoral candidate realizes this. As former MTA chief Joe Lhota said last Thursday, "Wall Street [is] contracting. Theyre getting smaller. Theyre getting smaller globally, but in New York even more."
Union leaders and members, though, have no idea that the world has changed, and the Democrats, desperate for endorsements, have stayed quiet, too.
The evidence was on view Friday at a CUNY forum on the fiscal problems facing the next mayor.
Randi Weingarten is a former head of the New York teachers union the citys single biggest union, representing 40 percent of the public workforce. She now heads the American Federation of Teachers, making her one of the most powerful labor leaders in the country. Her local successor, Michael Mulgrew, has bragged that the union can decide the election.
Yet Weingarten came to a forum about the citys fiscal woes and used her time to ignore the crisis consuming our budget.
Instead, she said the next mayor should "listen to the wisdom of employees" to eke labor savings and use achievement evaluations to help teachers "move up the salary scale."
She didnt mention that teacher salaries are already up 43 percent under Bloomberg, with an experienced teacher earning $100,049 in wages alone.
Nothing, too, about the pension or health-care crisis. Thanks in part to those higher salaries, teacher pension costs have more than quadrupled under Bloomberg, to $3.1 billion a year.
Former MTA labor negotiator Gary Dellaverson delicately pointed out the "unsustainability of costs" of these retiree benefits. On pensions, he said, nearly "$9 billion" in the middle of the next mayors term "isnt gonna stay nine and isnt sustainable. It wasnt sustainable at 4 1/2" billion.
Weingartens response? To say that the whole country faces a demographic crisis as if the fact that grandma is getting poorer has anything to do with New York City workers paying nothing for health care when they should be paying 20 percent (like everyone else).
She even had the gall to suggest that if public workers had "the right to strike" in New York, it would "create a sense of urgency that would get things done."
Then came a veiled threat that its "going to be a really, really rough time" in New York without a better way to address labors wishes.
It will be a rough time unless the mayoral candidates start putting their foot down, now.
Yes, Lhota and Democrat Anthony Weiner have said they want workers to pay health premiums, and Lhota has ruled out retroactive raises. But they still arent specific enough.
And the woman who is running on her history of balancing seven budgets, Council Speaker Christine Quinn, is mum.
If New York has labor unrest next year as expectations collide with reality, the next mayor will have no one to blame but him or herself for letting those expectations fester.
Original Source: http://www.nypost.com/p/news/opinion/opedcolumnists/deep_fiscal_denial_Z7Z1A8ZZ4T8LQTxEMWyX3L