One of the strangest realities about the looming MTA financial crisis relates to wages. Non-union employees at the MTA — including everyone in a management position — is currently slated for a 10 percent wage reduction while all union members are going to enjoy three straight years of raises. Chew on that one as the MTA prepares to cut its student MetroCard program.
Jay Walder, the authority’s CEO and Chairman, as well as the MTA Board representatives are well aware of this discrepancy between the MTA’s economic reality and the new labor contract. Their hands, for now, are mostly tied, but Walder is going to examine carefully the MTA’s payroll as he looks to avert potentially disastrous service cuts.
According to The Post, Walder is going after overtime. Currently, the MTA spends more than $500 million a year on overtime, and Walder sees this, rightfully so, as wasteful spending. “We need to take the place apart,” he said, referring to the need to change the culture at the MTA from management on down to the rank-and-file. He expects to layoff approximately 700 employees, and rampant overtime will be curtailed.
Still, other Board members took a more aggressive tone yesterday. Tom Namako reports on one:
Board member Nancy Shevell set her sights on the transit union, saying this year’s fare hikes will end up funding TWU Local 100’s “unrealistic” 11 percent raises over the next three years. “Where did the fare increase go? Where did that money go?” she said. “So much of it is going to our union members and the unrealistic work rules and unrealistic increases they’ve received.
“It is really unfair that one large group is not going to be affected by the economic downturn and another large group — for example, our youth and our disabled and working people — are having to pay the price,” she said.
In response, John Samuelsen did what he seems to do best: He defended his union raises at the worst time possible. “It’s easy to talk about taking a pay cut when you’re making a few hundred thousand a year,” he said of the MTA’s looming non-union paycut. I wonder if Samuelsen is losing the war by winning this battle though. Now isn’t the time to be too vocal in support of a pay raise.
In the end, though, the union raises fall at the feet of the MTA as much as they do the arbitrators who sided with the TWU. Norman Brown, a non-voting Board member who serves the MTA as one of labor’s representatives, chided the former MTA leaders — Lee Sander and Dale Hemmerdinger — for punting on the labor negotiations. He urged the MTA to keep negotiations in the future in-house and avoid arbitration. The union is willing to work with MTA leadership to reach solutions acceptable to both sides, and by involving outside parties, Brown argued, the MTA runs the risk of drawing arbitrators who are not familiar with the way the MTA’s finances work or the way the transit system is run.
Brown, of course, is right. In the end, the arbitrators sided with the TWU in an all-or-nothing hearing because that’s what the city’s other unions have received lately. Never mind that the MTA is a state authority or that it financial ability to pay is not tied directly to tax rates as the city’s is. The arbitration was the death knell here.
Now, though, it’s time for the two sides to work together to solve their differences. The MTA can’t afford increasing costs, and the union members can’t afford to see their employer, the people who sign the checks, stumble toward bankruptcy. Something, from both sides, has to give.
29 comments
How would one define bankruptcy for the MTA? Its assets are nearly worthless to potential creditors. MTA’s credit rating is dependent entirely on city and state credit ratings, so it can’t fail without them failing as well.
The assets of the MTA can be worth billions. A private takeover, leading to lower labor costs (fewer managers, OPTO, more efficient shift scheduling) and higher fares (say, $3 base), could probably make the system profitable even after depreciation.
I just find it hard to believe that the state would ever agree to reform its laws in such a way as to make a private takeover practical or profitable. And anyway, I don’t see the system ever being profitable as a whole. Maybe operations.
The MTA is a MAJOR real estate owner that alone is worth big money if sold at market value something they seem reluctant to do when they do sell.
The market value is in the low hundreds of millions, one-time…
Why attack the few workers who are lucky enough to still have decent jobs with decent pay? What about the debt service that the MTA (and all city agencies) pay to BANKS? What about the billions going to the war instead of needed services? What about those billions (trillions?) given to the same BANKS and auto companies?
The banks paid back most of what they got. The only real bailout hogs were the automakers and AIG.
It’s not “attacking the workers”. If anything, it’s attacking the management who allowed such a stupid decision to pass. I don’t care if everything was roses back then (and nothing concerning MTA finance has ever been roses), but it is the height of irresponsibility to grant these multi-year raises regardless of the state of the economy.
If they can manage to lay off 700 employees AND curtail rampant overtime, that does really call into question how they’ve been running things in the past. Yes they’re potentially cutting some service too, but I don’t know if that adds up to 700 employees and a bunch of overtime…
The TA has no reason to bargain in good faith so they don’t and this won’t change so that brings arbitrators into the equation.
I will be shocked if anyone at the MTA ends up taking a pay cut.
For years myself and many others have said if the MTA consolidated certain departments that can be joined it could save hundreds of millions. Why does MNR, LIRR, TA, and Bridges and tunnels all need seperate purchasing, payroll, human resources, labor relations, accounts payable, accounts receivable departments to name a few. Consolidate and eliminate many employees and the managers that out number them.
The MTA tried to merge NYCT with SIR as MTA Subways, and to merge MNRR with the LIRR as MTA Commuter Rail. In both cases, the state legislature blocked the move for political reasons.
If the Albany people weren’t trying to make the US Senate look smart, they’d encourage the creation of a separate company for suburban transit operations, with joint ownership by the MTA, New Jersey, and Connecticut. The company would integrate the three suburban rail systems as well as the suburban bus systems. This would streamline management, reduce labor costs, and increase ridership and efficiency, all at the same time. But some politicians’ patronage opportunities would suffer.
NYCT could never merge with SIR because then SIR would lose it’s railroad status which would be a major deal to it’s employee’s.
They can combine office jobs without getting anyones permission.
Well, the MTA tried. And no, they can’t combine office jobs, not while they’re forced to act as multiple companies.
I agree. Many of the changes the politicians have wanted the MTA to make for decades are impossible or illegal because of those same politicians.
Walder must be aware that overtime is one of the sacred cows of public sector labor. We are regularly treated to stories of city workers who double or triple their salaries with overtime (often just before retirement). If Walder has some idea how to cut down on overtime, he must have super-powers or something, because none before have been able to achieve that feat.
Keep in mind that overtime is often cheaper than hiring an additional person (with benefits and all). The savings here may be small at best.
True, but the alternative to overtime shouldn’t be hiring more workers, it should be making the existing workers more productive–the way it works in the private sector.
So you want a train operator to operate a train for 10 hours within an 8-hour span?
No, I am not advocating breaking the laws of physics. In your example, better scheduling would eliminate the need for drivers operating a train for 10 hours.
Part of the scheduling process is writing work programs to minimize costs to the agency. If may well be cheaper to pay someone to work for 10 hours than to split that work between two people. (It’s almost certainly cheaper if the service only runs for 10 hours – splitting it would mean paying two people each for a full day of work.) If that’s not being done already, then the schedulers aren’t doing their jobs.
Or do you mean reducing the span of service to less than 10 hours? That’s a service cut.
The one thing private companies are universally doing in this downturn is postponing expansion plans. A common sense no-brainer in a deep, prolonged recession. That’s because they don’t want to end up in the position the MTA’s cost-unjustified construction compulsion is constantly risking, best expressed by the old Beatles lyric: “making all those nowhere plans for nobody”.
A little capital reallocation at this time would go a long way towards helping to maintain the stability New York’s public sector workforce is able to bring to what would otherwise be the collapsing neighborhoods you see in every other city.
But the vast majority of capital projects have nothing to do with expansion. They have to do with things like replacing 70-year-old signals which fail frequently, or replacing 45-year-old cars which are expensive to maintain, or trying to keep 100-year-old stations from collapsing (they didn’t get to 181st St. in time).
And capital projects of any sort can’t be stopped on a dime – contracts have already been signed, so backing out in the middle comes with big penalties, and large holes in the street can’t be just left sitting around indefinitely.
Guess what? The MTA is not private company. Who knew. Like other levels of government, it is doing the right thing by stimulating the economy with construction projects. If Obama and Congress were doing more than paying lip service to “cities” and “urban affairs”, they’d be pouring billions of dollars into the Second Avenue subway and numerous other transit projects around the country, stimulating the economy much more than any highway project can or will.
The bottom line is, the MTA and other public transit systems are forced to tax or borrow from users, who already pay for service, while highway projects are paid for with money borrowed from the Chinese at much lower interest rates. Well, the Chinese have much more money than New Yorkers do.
Private companies overexpand in times of growth and then run out of money in times of recession; this is part of what makes the business cycle so nasty. One of the main purposes of government is to blunt the impact of the business cycle by engaging in austerity in good times and investing in bad times.
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