Gotham Gazette

The Place for New York Policy and politics

Topics

Topics

New MTA Chair Faces First Test in Labor Relations


participatory budgeting
Transit Worker Union members get their message out in past years.

The contract negotiations between the Metropolitan Transportation Authority and Transport Workers Union Local 100 TWU, which began last monthseem poised to widen the rift in the already strained relationship between the agency and the union representing some 34,000 bus and subway workers.

Certainly the talks – along with the agency's budget crunch – represent two huge and interrelated challenges for newly named MTA executive director Joseph Lhota. Lhota's efforts to cope with the agency's budget crunch rely to a great extent on how much he can or cannot get from the union. The authority wants workers, whose contract expires Jan. 15, to agree to a three-year pay cut and reportedly also is seeking to cut employees health care costs. For now—at least publicly – the union has rejected both ideas.

Much has changed since the union struck, shutting down the transit system for three days right before Christmas in 2005. The agency's financial system has gotten worse and two new people will face each other across the negotiating table.

Pay and Benefits

As they began their negotiations in November, the union and the transportation authority confronted two familiar issues: health care benefits and wages.

Health care will be a key issue during contract negotiations, according to Jim Gannon, head of communications for the TWU. The union plans to oppose any proposed increase in out-of-pocket healthcare payments and or the termination of members' healthcare plans.

The fight over healthcare is not new. In September, the TWU filed a grievance with an arbitrator over the MTA cutting healthcare for members, a move the union says violated its previous contract. The TWU alleged that the MTA has saved $40 million by finding new healthcare providers that require workers to pay more for the plan, while reducing coverage.

"There are issues with prescriptions, issues with hospital stays. There is an across the board effort by the MTA to nickel and dime transit workers to death," said Samuelsen.

The issues with healthcare come as the two sides ended a bitter battle over wage hikes. During the last contract negotiations, the transit authority refused to pay wage increases as a way to save $300 million in operating costs. The issue went to an arbitration panel, which awarded the workers a hike of about 11.5 percent over the three years of the contract. The MTA at the time didn't include any wage increases in its budget It then went to court to try to block the increase, but the judge found for the workers and the pay raise went through.

At the time, the MTA said flatly that it could not afford the pay hikes, which it said could cost the cash-strapped agency $200 million a year by this year. In a statement issued after a court upheld the raise, the agency said, " “The ruling will have severe financial impacts on the M.T.A. budget, coming on the heels of a state budget cut and reduction in payroll tax proceeds.”

This time around the MTA has said it will agree to pay hikes only if the union makes concession to offset the additional cost. "They can have an increase in their wages as long as we get work rule changes or other contributions to reduce the cost in the budget to zero," Robert Foran, the authority's chief financial officer, told Crain's.

Samuelsen, though has dismissed the idea of the proposed three-year wage freeze -- even though other public employee union have agreed to forego wage hikes. "NYC Transit workers are not agreeing to the wage freezes that other unions have. Neither transit workers, nor any other public sector workers caused the economic downturn," Samuelsen said in an online letters to workers. "NY state needs to look toward the investment bankers and Wall Street swindlers who caused this crisis to balance the budget, rather than to the hard working families of the Transport Workers Union."

The TWU also criticized the MTA for once again not calculating pay raises in its 2012 preliminary budget. The financial plan released by the agency in July calls for a wage freeze and for fare and toll hikes in 2015.

A New Beginning?

Lhota's appointment marks the end of a bitter relationship between the union and his predecessor, Jay Walder. According to Gannon, Walder's decision to try to dictate day-to-day operations strained the relationship between rank and file workers and leadership.

"The relationship with the MTA was terrible when Walder was there. His attitude was my way or no way. He had an agenda that we viewed as an anti-worker, anti-union agenda and an anti passenger agenda," said Gannon. "His whole thing was technology and the capital program. ... He didn't believe that the system needed people and he went after the station agents and the cleaners."

Throughout his tenure, Walder and the TWU fought over healthcare contributions and pay raises as well as the layoffs of rank-and [file transit workers. According to Gannon, 927 TWU members were laid off during Walder's tenure, the majority of them were cleaners or station agents.

When Walder announced his resignation after two years, Samuelsen released a letter criticizing his leadership. "Transit workers won't miss Jay Walder and quite frankly will be glad to see him go," it said.

Almost as soon as Gov, Andrew Cuomo named Lhota to the post, John Samuelsen, president of TWU Local 100 sent a message out to Lhota, imploring him not to worsen the bitter labor relationship between the MTA and the union. In the message, Samuelsen harked back to 1999 contract negotiations where the Giuliani administration got a court order preventing union members from suggesting labor actions and saying the word "strike." Lhota served as a deputy mayor in the Giuliani administration.

"If Lhota wants to continue the policies of where Giuliani left off in 1999, then he's likely to have a problem with organized labor. If Lhota is looking to have a working relationship knowing that we are going to disagree on many issues, then that would be our choice, our preference,” said John Samuelsen of TWU Local 100.

Same Game, Different Players

Samuelsen, though, also has expressed optimism that labor-management relations will be better under Lhota than they were under Walder. Even before he took office in mid November, Lhota and Samuelsen met several times, according to Transportation Nation. And on his first day at the MTA, Lhota signed a letter with Samuelsen urging prosecutors to crack down on passengers who attack transit workers.

The letters reportedly was Lhota's idea. “For the workers to see that Lhota actually seems to care about them, that will go a long way,” Gannon told a reporter.

Lhota bolstered that impression when contract talks began Nov. 15 and he told the assembled union members that authority's employees were its "most valuable resource." The workers reportedly roared in response.

And at the end of the initial meeting, Samuelsen asked his members "to show respect for the bosses who are walking out of here right now."

As for the union, Gannon pointed out that Samuelsen's relationship with union members is different than that of former TWU Local 100 President Roger Toussaint. While praising Toussaint's leadership, Gannon says that Samuelsen is more in touch with the daily needs of the workers.

"John is far more of a blue-collar grass roots guy than Roger was. His contact with members is on a daily basis, he has tremendous one-on-one relationships with the members. He's more keenly interested in what the members needs are on a daily basis, their working conditions,” said Gannon.

To the relief of transit rider, Gannon said the TWU does not intend to initiate any action similar to the two-day strike in December of 2005. In the years since then, he said, the union has tried to improve its public image. "The TWU has been initiating publicity events to get its message out and to advocate for rider quality issues," he said. "I think we lost some ground after the strike in 2005, and ' tough building it back up, the confidence and the credibility, and strike is the last thing on [Samuelsen's] mind.”

Along with the contract talks, Gannon said, the TWU is focused on its online petition to urge the MTA to develop a rat eradication program, its early support for the Occupy Wall Street protests, and its advocacy for the continuation of the state's millionaires tax.

“The whole outreach through free media, the outreach through communities and supportive activities through other events and to show people that the transit workers are not the enemies. Were not money hungry greedy union thugs,” said Gannon.

New Program Lets Taxpayers Do More than Gripe About City Spending


participatory budgeting
Residents of Councilmember Jumaane Williams' district in Flatbush met in October to review ideas about how he should spend his discretionary funding.

From the Occupy protestors to millions expressing disgust with debt ceiling debacle, many American are angry about how the government spends money,. something most of them have little control over outside the polling booth. Now, four New York City Council members are trying to change this and give residents a direct say in where the funding goes, at least on a local level.

"I walk down my street every day, wishing I could do something about the conditions," said Ali Abdul Rahman, a resident of Brooklyn’s 39th district, who is getting the opportunity to do some budget . "Well, now there is."

Under the plan, resident volunteers take ideas from residents of their community and work with their council member to come up with a budget plan for capital projects. This will affect only the pot of money -- often castigated as pork -- that members get to allocate to their communities as they see fit. It will not apply to expense items, just money for new building or equipment or improvements to facilities. And so far only four of 51 council member are participating: Brad Lander of District 39, Jumaane Williams of District 45 in Brooklyn, Eric Ulrich of District 32 and Melissa Mark-Viverito of District 8.

Most districts will allocate about a million dollars to the project though the exact amount of available discretionary will be determined by the council speaker, in the spring. Districts can usually count on several million each, some of which is already allocated to ongoing projects.

The participatory plan faces the challenge of involving the community and educating people about how budgeting works. However, proponents of the program say that participatory budgeting enhances democracy on a local level, improves the relationship between elected officials and their constituents, educates the public about local government processes and can boost the popularity of elected officials.

Born in Brazil

Participatory budgeting originally started in the Brazilian town of Porto Allegre 20 years ago. It then spread through much of Latin America, Europe and elsewhere, according to Josh Lerner of the Participatory Budgeting Project, a nonprofit organization, which tries to advance the practice in new areas. He said that the program exists in over 1,000 cities worldwide, in one form or another.

New York is only the second place in the United States to try participatory budgeting after Chicago's 49th Ward represented by Alderman Joe Moore. The program was very popular there, according to Betsy Vandercook, Moore's chief of staff.

It already is gaining ground among New Yorkers. "This is definitely the most popular thing we've done," said Alex Moore, Lander’s chief of staff.

Listening to the Public

The process involves many steps -- and many meetings. first, the elected officials reach out to their constituents and invite them to large town hall meetings that anybody from the district can attend. There, residents get together into groups and brainstorm ideas on how to improve the district and take care of the most glaring flaws.

Suggestions range from practical ones like fixing sidewalks and improving trash collection to outlandish ones like buying a gondola for the Gowanus Canal or winterizing a playground by putting it under a science fiction style retractable, transparent dome.

Around 100 community members then volunteer to be delegates and do the research needed to assemble these suggestions into feasible proposals. These delegates work together to weed out the totally unworkable plans, while grouping the workable ideas into categories, with the help of the council member's staff. The delegates then split into groups based on their area of interest, such as public health, safety and sanitation.

The delegates in each subgroup will then meet between five and ten times before March 2012. They also will need to spend some of their free time researching the city's many rules and regulations to understand what each project requires. Because they have a finite budget, delegates are encouraged to look for ways to get the most out for the least amount of money.

By spring, the committees will have selected their favorite ideas and, together with the council member, fleshed them out enough to go on a ballot. The elected officials will then gather their constituents' ideas and hold a district-wide vote where the public chooses which projects will get priority. This will allow the discretionary budget to be spent according to the will of the residents.

Everyone in the district 18 years of age or older can vote, regardless of whether he or she is a registered voter or a citizen living in the district. (People can serve as delegates when they are 16 or 17.)

"I had no knowledge [of the process] before, this is why I got involved, I see flaws and they don’t get fixed," said Rahman. "But I started to understand bureaucracy and why it takes so long."

A Lesson in Government

As they work through the process, residents come to appreciate just how difficult it is to make a working budget. At a 39th district environmental delegates' meeting, the group discussed ways to improve trash pickup and recycling, keeping in mind what the Department of Sanitation is and is not authorized to do, and adhere to the rules on what discretionary spending and capital money can and can't buy. This is hardly a trivial task for people with limited bureaucratic experience, many of whom have full-time jobs.

Participatory budgeting also requires extra effort on the part of council staff as they supervise the delegates and try to make sure all members of the community have the opportunity to participate. In Chicago, Vandercook said that the first year saw a disproportionate number of college-educated and white participants. The alderman’s staff has since improved its outreach, using word of mouth, online social networking and other tactics, so that people from a wider range of economic and ethnic groups have gotten involved.

In New York, the diversity of the participants may depend on the individual community. "The thing about our district is that it's extremely gerrymandered and diverse," said Trina Hickey from District 39. "So we get a good mix of people."

"A big part is community development," added Lerner. “Groups which ordinarily never work together, now do."

Proponents also say that participatory budgeting brings people closer to their elected officials. After three years of the program, Alderman Joe Moore has become "hugely" popular among participating residents, according to Vandercook, and his election victory margin rose significantly. Lerner said that in Brazil, mayors who instituted participatory budgeting were about 10 percent more likely to get re-elected than those who did not.

Alex Moore said that because the program is brand new, the council members expect to make mistakes. Each district will make adjustments so that the process better fits its needs. But overall, many participating residents are excited about the project and the transparency it can bring.

"We're not used to looking at other countries for ideas about democracy," said Lerner. "We think we know best, what can we possibly learn from Brazil? We should pay closer attention."

Showdown Looms over Living Wage Bill


living wage
Photo by RWDSU
Supporters of a living wage march in the Labor Day parade

Linda Archer, 58, spent years working double shifts as a nurse's assistant at St. Luke's-Roosevelt Hospital while she was a single mother.

But since the recession hit, finding a job has not been easy. Archer moved into her mother's one-bedroom apartment to make ends meet, and after looking for a year for clerical work and doing temporary jobs, she finally found a permanent position as an hourly employee at McDonald's, where she earns $7.45 an hour.

"That's all I could find, I can't find anything else. It was the bottom -- rock bottom," she said.

Archer has an associate's degree from Elizabeth Seton College, now a part of Iona College*. She wants to go back to school but can't afford it -- there aren't scholarships for older people, she said, so she would have to take out student loans.

It is people like Archer -- and thousands of other New Yorkers with similar stories -- that some City Council members and activists say would benefit from the Fair Wages for New Yorkers bill, now awaiting City Council action. A hearing on it will be held Tuesday, Nov. 22.

As Occupy Wall Street captures headlines and supporters, many paint the Living Wage bill as a legislative step toward helping the "99 percent." The bill falls short of some protesters' demands for a $20 dollar minimum wage, but supporters say it is a crucial -- and realistic -- step to help working New Yorkers rise above the poverty line.

What a 'Living Wage" Would Do

Most commonly called the Living Wage bill, the legislation would raise the hourly wages for jobs created in city-funded developments to $10 an hour with health benefits or $11.50 an hour without them. Studies show that that is what New Yorkers need to earn to stay out of poverty. The current minimum wage of $7.25 an hour, they say, forces many people who work to live in poverty.

Archer says she generally works about 30 hours a week -- she can-t find a full-time position -- and make $223 a week before taxes. That's just $10,728 a year. Under the living wage bill, if Archer found a job working the same number of hours in a development that is subsidized by the city and therefore covered under the bill, she would make an extra $92 a week for a total of $15,120 per year before taxes.

The requirement only would apply to future jobs in developments, such as shopping malls, that received a tax break or other subsidy from the city. Supporters say city tax dollars should go toward creating good jobs, not ones that keep people in poverty. Critics say the bill would kill jobs before they are even created.

The bill's current incarnation -- after a round of business-interest supported amendments -- now affects developments for the first 10 years after they receive any subsidies, and excludes manufacturing firms, companies with less than $5 million in annual revenue and those that receive less than $1 million in city subsidies.

Most say they can't predict how many jobs such a bill would affect -- estimates range from a few thousand jobs to many, many more.

The Lobbying Frenzy

The bill promises to be the focus of much debate at City Hall.

The Retail, Wholesale and Department Store Union (RWDSU) has led the union lobbying efforts on behalf of the bill. Over the past year, the union has pushed the "argument that this is a pragmatic, common sense bill that will help working people, our local economy, and businesses in the city, Dan Morris, a spokesman for the union said. He said the union has arranged for civil rights leaders like Rev. Al Sharpton, other clergy, and constituents to lobby City Council leaders. A massive protest is planned for Monday, the day before the council hearing, at the Riverside Church.

The Manhattan Chamber of Commerce is leading the opposing lobbying efforts, bringing small business owners to meet with council members to discuss the effects of such a bill. The Real Estate Board of New York sent a letter to City Hall last week, charging that the bill would limit affordable housing and hurt efforts to expand and create businesses in underserved neighborhoods. The letter, organizers say, is the first part of a more aggressive campaign to fight the living wage bill.

Both sides have cited wildly conflicting studies on the effects of the bill in New York City. Amid all the arguments, though, the fate of the measure rests largely on the shoulder of one person: City Council Speaker Christine Quinn.

Quinn's Quandary

As the bill awaits action, people on both sides are waiting to see what Quinn will do.

"If she supports it, it'll pass, and I believe it'll even override the mayor's veto," said Councilmember Oliver Koppell, who is the bill's lead sponsor. "If she doesn't, it won't."

Mayor Michael Bloomberg, as Koppell noted, is expected to veto the bill if it passes; he has long opposed living wage legislation and recently compared it to communism. The bill currently has 30 out of 51 City Council members signed on as co-sponsors. Nothing in City Council, though, comes to a vote without Quinn's backing.

For Quinn, a likely mayoral candidate in 2012, the vote is a tricky one. To kill the bill by not calling it to a vote, as she did last year with a bill requiring that workers in the city get some paid sick days, would lose her supporters on the left; to support it would cost her votes from business owners. A former housing activist, Quinn has widely been seen as generally siding with Bloomberg in an effort to get his support and that of the business community. But she has occasionally strayed from that supporting measures to rein in city contracts, for example, or lashing out at the city's plan to tighten eligibility for homeless shelters.

So far Quinn is not tipping her hand. Pressed repeatedly on the issue at a press conference earlier this fall, she refused to comment on the specific legislation or the general concept of a living wage.

Bad for Business?

While supporters of the living wage say they have tried to address some of business' concerns and perhaps win Quinn's support -- business owners still vehemently oppose the bill.

"It's as bad as bad can possibly be," said Robert Schwartz, 70, who owns three shoe stores in Manhattan and Queens with 49 employees overall and salaries that range from minimum wage to $100,000 a year. Only four or five people make less than the living wage in Schwartz's stores -- Eneslow, The Foot Comfort Center -- but he said that this bill will still hurt his bottom line and his ability to expand.

"Nobody else has the level of taxes and cost of doing business we have here. There are fees to put signs up, you've got to pay to take care of the disabled," he said. "If there's going to be one more layer of costs we're going to have to add on, the chance that we're going to open up new stores is virtually non-existent."

Dueling Studies

CUNY professor and labor scholar Stephanie Luce has spent 16 years studying the living wage. She has written books and papers, and conducted in-depth studies on the effects of similar legislation as enacted in cities all over the country. "We've yet to find an employer who stood up and said 'yes, this hurt my job,'" she said. "If it was there, we would have been able to find it.

In some cities studied, like New Orleans and Los Angeles, the wage increases amounted to an average of less than 1 percent of each firm's overall operating costs. Santa Monica reported a 1.5 percent hike in operating expenses, which Luce said was one of the highest hikes in the cities she studied.

None of the thousands of employers surveyed in affected cities said the law affected their plans to expand, Luce said. "I have heard firms make this claim more generally, during a campaign, but found none that said [this] after the ordinance was in place," she said.

In her studies, Luce compared cities with living wage ordinances to those without and said she found little differences in job creation and business sustainability in the two groups of cities.

"There's lot of examples of firms who say they can't make it, but once they're mandated to, they do it and they can survive, she said.

Additionally, some firms reported transitioning part-time jobs into full-time jobs so they could to pay the lower living wage and give benefits to fewer people. This, the report found, led to higher worker morale and more productive employees.

Business owners like Schwartz say other cities' experiences are irrelevant -- New York is different and more expensive.

The Bloomberg administration sides with them. The Economic Development Corp. commissioned a $1 million study by David Neumark, that found enormous potential losses for New York businesses if the living wage were implemented.

Neumark has a long history of opposing the living wage, and Luce and other academics have criticized the methodology, data used, and findings. Supporters of the living wage complain of bias.

Raising Pay

Businesses, though, back his findings. Nancy Ploeger, the president of the Manhattan Chamber of Commerce, worries about the effects on blossoming entrepreneurs looking to start franchises. "No one is going to open a Subway if they have to pay $11.50 an hour, she said.

Mike Veneziano, the vice president of finance for Doherty Enterprises, a company that owns 50 Panera and Applebee's restaurants in New York, agreed. Doherty has a dozen new restaurants in the works, but he is worried about the legislation's possible effect on where to put those restaurants and their viability.

"We're really worried about it, and we're worried it's going to deter us from opening future locations and worried it will hurt existing businesses," said Cathy Coughlin, Doherty's vice president of human resources said. She said that most employees make more than minimum wage, but to start entry-level employees off at $10 or $11.50 an hour would mean the company would have to raise wages for long-term employees, too. "Restaurant operating profits are really minimal, so to shave away even more costs in this economy is a big concern to us," Veneziano said.

Luce said she accounted for what she calls a "ripple effect," where employers have to hike pay for employees earning more than the living wage to maintain wage scales internally. In Santa Monica, which was one of the hardest hit cities she studied, both the living wage hike and the ripple effect hikes accounted for 1.8 percent of average firms' overall operating costs.

Inside that average, however, restaurants felt the ordinance particularly strongly. They saw operating costs rise by an average of 10.2 percent.

Archer, meanwhile, is hopeful about her future despite the recession. "My son is grown up, so I can branch out. Now it's time for me," she said.

Before she can do that, she wants to find her own place. I live at home with Mom, we all know how that is, she said. As for school, she said she'd like to do a law degree, but first she needs to complete a bachelor's degree: I want to start small, even if I just get the pre-law. Just to get back there it's a start."

In the meantime, she hopes the speaker will vote for the bill: "We're looking to Christine Quinn to be that deciding vote. She can say, 'this is needed.'"



Print Friendly and PDF

Editor's Choice


Gotham Gazette: New York Voters Approve $4.2 Billion Environmental Bond Act
New York Voters Approve $4.2 Billion Environmental Bond Act
Gotham Gazette: 
New York City Voters Approve Racial Justice Ballot Measures
New York City Voters Approve Racial Justice Ballot Measures
Gotham Gazette: 
Housing Development in New York City Slows to a Crawl as Officials Debate Tax Incentives
Housing Development in New York City Slows to a Crawl as Officials Debate Tax Incentives
Gotham Gazette: 
City Council Examines Low Voter Turnout, Moving Local Elections to Even Years City Council Examines Low Voter Turnout, Moving Local Elections to Even Years