Gotham Gazette

The Place for New York Policy and politics

Three Days In December


What lasting mark will the three-day transit strike of 2005 leave on the city?

The 1980 transit strike, which lasted 11 days, gave New Yorkers at least three tangible things: dollar vans, women who carry their good shoes in their bag and walk to work in sneakers, and the term “gridlock,” coined by Sam Schwarz.

The 1966 strike, which began on the first day of John Lindsay’s administration and ended 12 days later, painted the mayor – either fairly or unfairly – as an unsuccessful leader and contributed to the notion of an “ungovernable” city that took decades to overcome.

Even a series of streetcar strikes in 1880s left a legacy of shorter workdays.

It is too early to tell what will come out of the transit strike of 2005. Some, for example, hope it will result in bicycling and even walking as the new norm for commuters, and in permanent restrictions on automobile traffic. But, for the moment, the walkout seems above all else to have brought to light a series of issues connected to public employment -- labor issues that go far beyond the beef between one union and its bosses.


On the night of the union’s strike deadline, as midnight approached, it became clear that the conflict that was leading to the showdown came entirely down to pensions. In his last-minute offer, Metropolitan Transportation Authority Chair Peter Kalikow drew nearer to the union positions on many issues but demanded that all new transit workers pay six percent of their wages for pensions -– up from the current two percent. The union balked, with Toussaint saying the plan would, in effect, cut the wages of new workers by four percent and only save the MTA “a pittance.” And, indeed the New York Times calculated that, if approved, Kalikow’s proposal would have saved the MTA $20 million a year for the next three years – a tiny amount of the agency’s $9.3 billion budget for the next fiscal year.

But the significance of the move extends beyond dollars and cents. “This is not the end of it. This is just the beginning,” E.J. McMahon of the Manhattan Institute told the New York Sun. “What Toussaint has done is educate a whole new generation of New Yorkers as to how cushy pension deals are for workers by private sector standards.”

Transport Workers Union leader Roger Toussaint on his way to a press conference; Union supporters gathered on the Brooklyn Bridge

Fiscal watchdogs and some politicians have long sounded the alarm about what a post-strike editorial in the New York Times called "an issue of growing concern all across America." Even in the private sector, "pensions are increasingly at risk and increasingly self-funded," but public officials nationwide see the cost of pensions for public employees as a growing threat and the effort to scale them back a future source of friction. Mayor Michael Bloomberg has cited it as one of the "uncontrollable" expenses undermining New York City's financial future.

By one reckoning, the city's pension bill went from $3.37 billion last year to $4.74 billion this fiscal year. It could go to $5.08 billion for the next fiscal year, which begins in July, 2006. A recent analysis by the Public Policy Institute, a state-wide business-oriented group, found that people who had retired from state and local government jobs in New York collected an average of $22,676 in pension benefits in 2003, about 16 percent above the national average.

Under New York state law, governments cannot reduce pension benefits for employees. But they can impose new requirements for new employees, as Kalikow suggested. At the city level, divisions already exist. There are four pension "tiers" in New York, based upon the employee’s start date, and Bloomberg has said a fifth for those most recently hired might be useful.

Some fiscal watchdogs would go further and restructure the pension system. Today public employees are guaranteed a set benefit after they retire. In most private companies, though, employers and employees make a contribution to a retirement account. The amount the worker receives depends on how much money those investments are worth once the employees retires. The Citizens Budget Commission and the Manhattan Institute have urged that government switch over to this so-called "defined contribution plan." This would protect the government from the vagaries of the financial markets but leave the individual worker bearing that risk.

Of course, the only reason public employees have such generous pensions is that politicians agreed to them in the first place. In 2000, for example, Governor George Pataki reduced to zero the amount that transit workers and other government employees with 10 years on the job had to contribute to their pensions. And Albany has given retired public employees cost-of-living increases in their city pensions, a measure that alone will cost the city $820 million a year by 2010, according to Doug Turetsky of the Independent Budget Office.

“Now, with a foot in New Hampshire on his way out the door, George Pataki has discovered that New York has a pension crisis and that 34,000 transit workers … should be enlisted to solve it,” Wayne Barrett wrote in Power Plays, a Village Voice blog, during the strike.

And while Bloomberg has spoken repeatedly of the need to reduce pension costs, “he certainly hasn't demanded it,” said Steven Malanga of the Manhattan Institute,” In fact, in his recent contract talk with the teachers union, Bloomberg agreed to establishing a labor/management committee that could consider way to cut the retirement age for teachers from 62 to 55.



Faced with rising health care costs, the MTA asked workers to begin contributing to their health care costs. Until now, transit workers have not had to pay anything for their health care coverage. The MTA asked that future workers contribute two percent of their salary toward their health care. The union said it would not agree to any deal that made workers contribute to health care costs.

Along with pensions, this quickly became one of the most contentious issues in negotiations – and one that city officials and fiscal and labor experts watched closely. While some critics of the union pointed out the relative generosity of the plan in comparison to private sector workers, others said cutting health benefits could set a bad precedent for organized labor. Days before the strike, Newsday columnist Ray Sanchez described the transit talks as a “historic fight against pension and health-care rollbacks for public sector employees.”

A normally empty afternoon PATH ride; people taking the LIRR from Brooklyn and Queens to Manhattan;
The line for the Brooklyn ferry


The city government’s health insurance costs are rising rapidly. In 2004 these costs totaled $2.4 billion; they are expected to total $3.9 billion by 2009.

Across the country, public and private employers are squeezed by health insurance costs. Some private employers no longer provide health insurance to workers, and most of those that do require that workers pay an increasing share of the costs.

Public employees, on the other hand, have not seen this erosion in benefits and now receive much better health plans than workers in the private sector. According to the Employee Benefit Research Institute, local and state governments pay well over twice the rates that private employers do to insure workers (in pdf format).

But while Mayor Michael Bloomberg has frequently cited health care costs as contributing to future city budget deficits, critics say he has done little to address rising health care expenses and that, in the latest round of contract negotiations, did not gain any concessions from unions on such costs.

Malanga says the city should either reduce the amount that it pays for health benefits or find ways to offset the expenses.



When transit talks reached an impasse, the issue was not about benefits or wages for union members -– it was about the benefits that future transit workers would receive.

The Metropolitan Transportation Authority wanted to give future workers less generous pension and health care packages but, as Peter Kalikow, the authority's chair, repeatedly pointed out, the plans of current workers would not be affected.

Still, union chief Roger Toussaint emphatically rejected the idea. "We will not sell out the unborn," he said, using a phrase he invoked repeatedly throughout the negotiations.

Historically, however, compromising with the benefits of future union members has been the easiest way for unions to respond to employer demands for cuts in expensive benefits.

"It's a common experience, and it's a way for a labor leader to make an unpopular decision in a way that his members -- the members who elect him or her -- don't have to pay for," said CUNY professor John Mollenkopf.

Unlike Toussaint, not all municipal union leaders have stood in solidarity with their future brethren. District Council 37, New York's largest public employee union, agreed earlier this year to give future workers fewer vacation days. And when given the choice this June, the Patrolmen's Benevolent Association decided to drastically cut the salaries of future officers and police cadets to pay for today's raises, instead of agreeing to other cost-saving measures.

Such action could lead to intra-union tension, as new workers enter the union with less favorable contracts and grudges toward the old guard leadership. In the case of the police officers, some also cited a fear that it could reduce the effectiveness of the police department.

"Setting a cadet's salary at $25,100 is no way to recruit the Finest," wrote the Daily News in an editorial in June, "and it illustrates how mulish the PBA and President Pat Lynch can be in refusing to accept productivity improvements.”



Since becoming mayor, Bloomberg has invoked a kind of mantra in dealing with unions: Any salary increases will be at least partly paid for by increases in worker productivity. “From his statistic-packed management reports, to the bullpen cubicles he's made city administrators sit in, the CEO-turned-mayor is always looking for ways to improve output,” according to WNYC’s Dan Blumberg.

This issue arose early in the transit talks when the MTA sought to change rules for transit workers’ broadening job responsibilities. For example, the authority wanted conductors to become customer service agents who would roam the train, rather than stay in the conductor’s booth. Similarly, the MTA wants the former token clerks to move around subway stations and help riders. The union has expressed reservations about employees’ safety in stations, and passenger safety if conductors’ duties are changed. As negotiation went on, this issue seemed to fade although it could still emerge in a final settlement.

While Bloomberg has certainly sought productivity gains, it remains unclear how much he has actually accomplished in this area. While he has not gotten everything he has wanted, “labor experts say, he has wrung more productivity increases and other concessions out of the unions than previous mayors have,” Steven Greenhouse wrote in the New York Times.

Perhaps most significantly, this fall, the Uniformed Sanitationmen’s Union received a 17 percent pay hike over 51 months after they agreed to longer trash collection routes and to allow one person, instead of two, on trucks that pick up large roll-on bins.

The city also got some productivity gains and changes in work rule from the United Federation of teachers in their new contract. The teachers agreed to three additional professional development days – work days for them but not for students – in the school year and 50 minutes more a week, limited some seniority rights and gave administrators more flexibility in assigning teachers to such non-instructional tasks such as patrolling lunchrooms and playgrounds. Noting that the contract continues the practice of swamping “time for money,” the Citizens Budget Commission commented, “This policy is very expensive. The added time bought in this contract has an extra annual cost of about $230 million.”

And the Manhattan’s Institute’s Sol Stern said the contract was a far cry from the changes originally sought by Schools Chancellor Joel Klein who had wanted to scrap a whole array of contract provisions and replace the 200-page contract with a streamlined eight-page document. But in the end, Stern wrote, “Mr. Klein bit his lip and affixed his signature to yet another 200-page teachers contract — one containing the same lock-step pay schedule, based on seniority and useless education credits, he earlier promised to end.”

The gains in productivity and work rules have also had a price beyond dollar and cents, according to some observers. "In a kind of nonbelligerent way, [Bloomberg] has taken a very hard line, and his insistence on productivity givebacks has made labor relations very, very difficult," said Joshua B. Freeman, a labor historian at the City University Graduate Center.



If Freeman is correct, the animosity may arise from the fact that work rules – how employees are treated on the job – go very much to workers’ feeling about whether their bosses respect them. Time and again, union leaders have said the city was not giving them the credit and respect that they deserve.

When the city suggested the Uniformed Firefighters Association, which is still without a contract, consider DC 37’s agreement as a model, firefighters president Steven Cassidy reacted scornfully. “Mayor Bloomberg says we're no different than people who just push paper,” he told WNYC. “That's a joke. It's an insult to police officers and firefighters who risk their lives everyday.”

Patrolmen’s Benevolent Association President Patrick Lynch has expressed similar sentiments. "We put on a shield on our chest, a gun on our hip and we go out and we go where no one else goes," he said. "And you're not going to respect us?"

After eight years of attacks from former Mayor Rudolph Giuliani followed by Mayor Michael Bloomberg’s takeover of the school system, teachers have felt insulted as well. "It's time to invest in the new three R's," UFT President Randi Weingarten told a “Respect for Teachers” rally in 2003. "Respect for teachers. Retention of qualified staff. And resources for schools." Teaches felt so slighted by what they considered micromanaging of classrooms by Chancellor Klein – a man with virtually no education experience before he began running the nation’s largest public school system – that the new contract specifically bars disciplining teachers for violating some of Klein’s rules about lesson time and bulletin boards.

Amid all the dollars and cents issues in the transit talks, “respect seemed to be the driving motivating factor,” Bruce Schaller wrote in Gotham Gazette. Workers have cited what they see as petty and punitive rules and arbitrary disciplinary actions against them. Workers are “punished and harassed daily by management,” Juan Gonzalez wrote in the Daily News. One worker told him, "We've been fed up with the MTA and wanted a strike for years."

And so, they got one. But it is not clear whether any strike could give the transit workers more respect or really resolve the many thorny issues facing New York’s government agencies and their workers in the months and years ahead.

All Images from Flickr




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