Jun
03

A salary too high or simply too many employees?

By · Published in 2010

The Empire State Center for New York State Policy — a project for the right-of-center Manhattan Institute which has turned out-of-control pension costs into its cause célèbre — released its entire MTA payroll data for 2009 yesterday, and as we can imagine, the hand-wringing has begun. If we want to assign blame, though, a bloated work force could trump inflated salaries.

As the Empire Center reported, the MTA’s total payroll increased by 2.4 percent in 2009. With the TWU, one of the MTA’s largest unions, earning its members a four percent raise last year, some of the MTA’s cost-cutting measures must have been successful. Meanwhile, more than 10 percent of the workforce take home salaries in excess of $100,000. The Center published a PDF list of the top 100 earners, and by and large, these are people who deserve their salaries. Compensation under $300,000 for agency heads seems downright cheap compared to what these workers would make in the private sector.

The Empire Center’s press release offered up some good tidbits. In the $150,000-and-over club were 11 LIRR car repairmen who nearly tripled their base salary through overtime shifts. Others included:

  • 65 Long Island Railroad and Metro-North Railroad conductors who averaged $86,837 over their base salaries which averaged $75,970;
  • 53 Bridge & Tunnel Sergeants and Lieutenants who averaged $94,962 over the average base pay of $82,594;
  • 34 Long Island and Metro-North Railroad engineers who averaged $89,109 over their $77,953;
  • 28 MTA police officers; and
  • 23 Long Island Railroad gang foremen averaging $81,718 over their base pay rate $82,249.

To drill down on the salary figures, the Empire Center has provided the public with a salary database as well. Things get interesting when we start looking at what train operators made. One took home over $81,000 on a base salary of $28.65 an hour. That comes out to 350 eight-hour shifts in one calendar year or a lot of overtime. Overall, New York City Transit’s 3487 TOs took home a combined $239.7 million last year.

I could go on and on with the numbers; it is, after all, strangely addictive and voyeuristic to see what these public employees make. But lists of not-that-outrageous compensation figures serves little purpose. To identify cost savings, the MTA has to figure out how to reduce not just overtime but man-hours as well. A proposed plan to offer early-retirement packages that the MTA and TWU are discussing could be a good start, but the issue won’t be solved by attacking overtime or adjusting work rules alone.

Rather, one of the problems facing the MTA is the sheer number of people it employs in mostly redundant positions. Metro-North and the Long Island Rail Road pay far too many people to collect train tickets, and Transit has a staff of 3487 train operators that could, with current technology, be chopped in half. While union members protective of their jobs claim that one-person train operation will slow down transit, real-life application of that advancement has done nothing of the sort throughout the transit world. We simply do not need two people driving and controlling the subways any longer.

For its part, the MTA noted its attention to payroll reduction, but the unions were largely silent after the Empire Center released the data. “We are in the process of overhauling every aspect of our business, including the elimination of approximately 3,000 positions this year,” the authority said in a statement. “One key part of this effort is a focus on the work rules, pension padding and management oversight that leads to some of the unnecessary overtime highlighted in today’s report.”

Yet, that approach almost misses the point. As management and its unionized workers square off over cost-cutting measures, inevitably, the debate turns to battles over compensation figures that aren’t too high. It’s time to reframe that debate, and while OPTO and a more efficient commuter rail ticketing system would involve cutting a large number of employees, the MTA is saddled with too many workers at all levels. That’s the real problem.



Categories : MTA Economics

35 Responses to “A salary too high or simply too many employees?”

  1. Alon Levy says:

    I’m looking at the salary numbers on the website, and honestly they’re lower than I thought. The subway C/Rs seem to average about $57,000 a year, which is much lower than I thought. I’d have guessed closer to $100,000 including benefits. But there are a lot of them – about 3,000, so that subway-wide OPTO would save about $170 million a year (on the LIRR it’d save $90 million and on Metro-North $70 million, minus the cost of fare inspectors). For anyone keeping track, those cost savings are an order of magnitude larger than the sum total of the overtime reported on the bullet points in this post.

    In case anyone still has any doubts about the Manhattan Institute’s amount of expertise on the subject, read City Journal’s recent article about Madrid’s extremely low-cost subway construction (link). Supposedly, it’s all about the PPPs and the private sector involvement. Then read the impressions of someone who actually knows what he’s talking about and compare the difference. It turns out the country that uses the most PPPs in Europe, Britain, also has the highest construction costs, contrary to what City Journal is implying.

    • Alon Levy says:

      By the way, I’m trying to extract more information, but the Empire Center’s data is presented too poorly. For example: “trackworker” and “track worker” are two distinct categories. LIRR has only track workers, Metro-North only trackworkers, NYCT both.

      The trackworker bit is not a minor oversight. One of the persistent problems of FRA-regulated railroads is that the FRA demands that trains be very heavy. While Japanese EMUs weigh 30 tons per car and European EMUs about 40, the LIRR and Metro-North use 56-ton cars. NJT’s electric locomotives are at 92. Since track wear is proportional to the fourth power of axle load, the extra weight should force much higher maintenance costs, which will be seen in an oversize maintenance staff. You’d think that the Manhattan Institute would know enough to take this free shot at government regulations, but instead it buries the data where it can’t be found.

  2. Scott E says:

    “Metro-North and the Long Island Rail Road pay far too many people to collect train tickets”

    I know there have been comments on Second Ave. Sagas suggesting this in the past, but on what evidence is this based? Usually (this is from observations, perhaps someone “in the know” can elaborate) the head conductor is responsible for the first two cars, plus announcements and opening doors. The remainder is split between 4 and 6 cars per conductor.

    Especially on local outbound trains, the entire train needs to be checked between the origin (Penn, GCT, Atlantic Ave) and the first stop. Particularly on weekends and on the Atlantic Branch, people often get free rides because the conductor didn’t reach them by their stop. Cash-fares (especially on weekends), forgotten monthly passes, and people boarding the wrong train all slow down conductors on a regular basis. Fortunately, the newer trains have automated the conductor’s earlier responsibility of making announcements.

    In order to accomplish the same levels with fewer conductors, some sort of electronic fare-collection would be needed, perhaps built into the car seatbacks themselves.

    • Marc Shepherd says:

      In order to accomplish the same levels with fewer conductors, some sort of electronic fare-collection would be needed, perhaps built into the car seatbacks themselves.

      That is the exact idea: electronic fare-collection, coupled with spot inspections and heavy fines for cheating.

      • SEAN says:

        In the San Fransisco bay area CalTrain no longer uses tickets. In order to buy a fare you must use a Translink smartcard.

        When you get to your oregin station you “tag on” wich charges you the max fare. When you arive at your destination, you “tag off.” The difference between your actual fare & the max fare is refunded to the card.

      • JPN says:

        Yes. One of the things on Jay Walder’s wishlist is to have a smart card system for commuter rail tickets such that fare are collected automatically and conductors would only have to go to people who do not have a ticket, insufficient fares, etc. Backlash from conductors who would lose their jobs would certainly ensue.

        • SEAN says:

          From the Translink web site.

          Using TransLink on Caltrain
          TransLink is now available to all Caltrain customers. TransLink customers can pay for rides on Caltrain by adding a Monthly Pass or 8-ride Ticket to their card, or by using e-cash. Please see the “Fares and Passes” page for more information on the types of value available. To use TransLink on Caltrain, customers must always have $1.25 in e-cash on their TransLink card, even if they are using a Monthly Pass or 8-ride Ticket. For more information on the minimum e-cash requirement, please click here.
          To use TransLink on Caltrain, you will tag your card at the beginning and end of each ride if you are paying with e-cash or an 8-ride Ticket. If you are using a Monthly Pass, you will tag at the beginning and end of your first ride of the month. To tag your card, touch it to the card reader until it beeps. Card readers can be found in various locations at each station.
          Download the Caltrain customer guide to learn more about using your TransLink card on Caltrain.
          You can also use transit benefit programs such as Commuter Check® or WageWorks® to add value to your TransLink card. To learn about using transit benefits with TransLink, please visit translink.org/transitbenefits.

          • JPN says:

            That would be impractical to use at Penn Station or Grand Central with the crowds or at Jamaica where many people have to transfer trains. The fare collection should still be on the train itself, and it seems that’s what Walder wants as well. Never mind if there’s the threat of high penalties in an open system like Caltrain, I’d rather be assured that my fare is paid on the train. Don’t want to be bothered if I paid my fare.

            • Alon Levy says:

              Fare collection is done off-board at far busier stations than Penn and Grand Central. If you don’t have enough money on your card, then recharge your card, just like you would on the subway.

              The part about not being bothered if you paid your fare has two answers. One is that under a faregate system you wouldn’t be bothered. The other is that under POP you wouldn’t be bothered most of the time; most trains are not inspected in order to keep costs down. Now compare that to the current situation, when a conductor will bother you on every train to punch your ticket.

              Modernity is convenient.

              • JPN says:

                I think I get what you’re saying, but I must be too skeptical that there’s a lot of potential for abuse.

                Have you seen Jay Walder’s comments in the developers’ unconference, which is what I’m referring to here? If not, see what he says about railroad fare collection which begins about 2 minutes to the end of here and continues to here.

                • SEAN says:

                  Reread what I posted. You tag on & off yourself with these cards. If you install readers throughout Penn & GCT, there shouldn’t be a problem.

                  If you change trains at Jamaica, you wouldn’t tag your card. Readers would NOT be at platform level. they would be in the ticket office & other outside access points such as the passage to & from the subway & next to the stairs leeding from 94th Avenue to each platform.

                  • JPN says:

                    Oh, now I get it. Well, OK. Not to be like Kate Gosselin (on Dancing with the Stars), but I had to seek out this brochure to fully understand how “tag on/tag off” works.

                    So now if we adopt this system, customers would have to change their ways in entering and leaving the train system, putting more pressure to arrive at the origin station earlier and expect congestion at the destination station. This is not a criticism, but just a thought. Conductors would also still be required to check every ticket (maybe a little quicker), which I feel Mr. Walder would not prefer.

                    On the upside, the tag on/off is not limited to Caltrain, but extends to the other Bay Area transit systems. Now if that happens in New York, and then throughout the country, that would be great! And we can get rid of those turnstiles and HEETs and emergency gates once and for all!

                • Alon Levy says:

                  I’m at work, so I can’t watch YouTubes right now.

                  But the potential for abuse is in practice quite small. In San Francisco, they’re screaming about 5% fare evasion. In Zurich, audits show fare evasion is less than 2%. For the MTA, an agency that spends 15% of its fare revenue on fare collection, either figure would represent a bargain. And this assumes zero fare evasion with faregates, which is not the case.

                  • JPN says:

                    Alon, for your convenience, I’ll print the comments. Basically he said that as we’re moving forward with a smartcard-based system, “we want to break down the barriers of how do we use this type of technology on our commuter railroads, where we want to make our staff that much more effective. Today we walk blindly down a commuter rail car asking everybody if they have their tickets. The process we really want to know [next video] is, he has a ticket, he has a ticket, oh no, that person doesn’t have a ticket… I’ll go collect the person for that ticket. If I can know that and direct my resources to that, I saved a whole bunch of resources that actually exist in our system that would be doing nothing more than checking what I could otherwise know already… There is absolutely no competition between New York and Boston in this regard other than we don’t want to beat them, we want to crush them.”

                    In light of my comment above, his system would probably be more viable 50 years from now and cost more money to implement now versus the California Translink fare system. And knowing the contentious history of the labor unions, the savings he may want may not happen at all.

                    I’ll give you the benefit of the doubt on fare evasion, but until I’m a globe trotter like you are, I’ll have a little reservation, although much less than before.

                    • Alon Levy says:

                      Ugh. Those remarks don’t fill me with a lot of confidence. He’d eliminate some of the conductors, but not all and probably not even most. At crush load they’d still need to walk through the train – they’d just do it somewhat faster.

                      Whatever this is, it’s not industry best practice. Industry best practice is faregates at very high ridership (Japanese trains, Paris RER) and POP at any lower ridership level (any S-Bahn, London commuter rail). More cynically, it suggests to me that Walder not only doesn’t care about emulating success, but also doesn’t care about learning from his stint in London. I’m not yet willing to say that he only cares about being seen to be innovative instead of being innovative – he did after all sound the alarm on construction costs – but if he makes too many more comments like this, I will.

    • Alon Levy says:

      Electronic fare collection would be ideal, but is not necessary. The German-speaking world has run commuter trains OPTO with random fare inspections for decades, using paper tickets for most of the time. The amount of infrastructure required is a single TVM at each station, or on very lightly used lines one on each car, and that is not that expensive. High discounts encourage people to buy unlimited monthly or annual cards, which reduces fare collection costs and makes more TVMs unnecessary. European TVMs cost about $50,000 apiece; the capital expenditure of fitting every LIRR and Metro-North station with one would be $12 million, which is an order of magnitude less than the annual cost of conductors.

  3. Al D says:

    I see lots of fluff at MTA HQ from prior experience. An addition to your article could be productivity in addition to duplicity. In a trip down memory lane, there are many, many unproductive names, that could lop off a cool million or without even blinking an eye.

  4. oscar says:

    its not the salaries
    its the pension costs, pension padding, early retirement, low contribution rates, etc.

    • JPN says:

      Agreed. One ludicrous example is an LIRR train yard locomotive engineer who earned $94,600 when his contract stated he must be paid when moving a locomotive to a nearby maintenance facility or to operate a train outside the yard. Is that a common contract clause?

      But then there’s another LIRR conductor who earned $100,000 in unused sick days and vacation time upon retirement. If that’s legitimate, he must be super healthy and deserves a compliment over other employees who apparently abused health care compensations.

      • JPN says:

        Oscar, I was thinking more of overtime when I said “Agreed”, but pensions and pension-related costs indeed sound high.

        While we’re on the subject of employees, this week’s NY Times Q & A is with a train operator who works on the 4 line. I’m pleased with the answers, let alone the fact that the Times is featuring someone outside the world of academia or its core highly-educated audience.

    • oscar says:

      and yes, having too many employees greatly multiplies this

      • bob says:

        The real issue with pensions is that the City/MTA don’t make contributions when times are good (stock market up so the accounting shows a surplus pension fund); so they are called upon to make larger contributions when times are bad. And during good times the politicians agree to higher benefits to get the workforce vote. Guiliani was a master of this.

        Steadier funding in good times and bad would eventually work to everyone’s long term benefit. But politicians have no interest in the long term.

  5. Eric F. says:

    They should be looking at turnover. What is turnover in a typical company and compare it to the MTA. If turnover is way lower, you can assume that the workers are being paid above market. I remember back many years ago, DSNY opened hiring after a long abeyance. There were people lined up aropund the block for a shot at becoming garbage men. Nothing wrong with that line of work, and NYC could live without a public school system a lot longer than it could go without a sanitation department, but people knew a job with DSNY is a ticket to lifetime employment at above market wages and benefits. The question is not whether typical salaries are eye-pooping, but whether they are materially more than what these guys could earn outside the MTA. If the MTA buys gas at $5 a gallon, the issue is not that $4 sounds insane, but rather that it’s 1/3 above market and it’s wasting money by overpaying.

  6. Paulp says:

    These o.t abuse stories are a little funny to me: only question I ask is did the employee work the time they were paid for or not? These people put in extra time at work to make more money, what is wrong with that? If they were getting paid for time they did not work that’s a different story.
    The same people that say “that CEO who got a million dollar bonus earned his money” begrudge an hourly worker for working more and making more money. Smacks of elitism to me.

  7. Nicolo Machiavelli says:

    “The unions remain largely silent.”
    What, exactly do you expect? A debate with EJ McMahon? Rules are rules, negotiate them, arbitrate them, litigate them or legislate them. Your, the Post-Manhattan Institute, “coverage” doesn’t help woth the negotiation, arbitration or litigation, but that won’t stop you, your readers love it (voyeaurism, right on, plenty of time on your hands too). The jury is out on the legislative effects though. That’s where the unions will not be silent. See you in Albany, Ill take you to “Jack’s”. I’ll buy. Meanwhile, finding common cause with the workers (yes workers) on the system will have to wait until wages and benefits have been lowered enough (like that could ever happen) to satisfy the Manhattan Institute.

  8. Alon Levy says:

    Tokyo Metro has 8,509 employees. Toei, which is smaller but less efficient, has another 6,400; it provides more data than Tokyo Metro, from which we can compute an average compensation of $103,534 per employee as of 2005.

    New York City Transit employs nearly 47,000 people. Using NTD data one can compute an average compensation of $111,412 per employee as of 2008.

    As far as I’m concerned, this discussion is over.

    • Niccolo Machiavelli says:

      The more things change the more they remain the same. Great debate. Alon has a clear head amidst all the unemployed Human Resource consultants on this blog.

    • Nathanael says:

      Hmmm. Maybe NYC could contract out its workers to run other people’s transit systems; it looks like they could run several additional systems with the current number of workers they have.

  9. Patrick says:

    Yikes. It is never a good thing when MTA salary figures hit the front page of Drudge:

    http://www.businessinsider.com/mta-salaries-2010-6

  10. jim says:

    So what’s a fair salary in New York? I can honestly say if you make less than a 100k a year you ain’t living pretty. People need to eat, and the guys that make 80k more than their base salary earn it by working. Sure, they made a 160k but they worked how many hours a week to do it? Probably about 65 hours a week. So, if you are willing to have no life, you should get paid for it. And the answer to can they do this job with half as many people? Yea, probably, but what good is cutting staff going to do, just put more people out of work? More people on the foodline? People need jobs, let their be work, enough with technology, it has destroyed our well being.

  11. TheDon says:

    How utterly stupid to worry about what someone else to making as opposed to finding your happiness or truth! That being said I believe that CRABS IN A BARREL is appropriate…

  12. Hamish says:

    Iam actually grateful to the holder of this website who has shared this wonderful post at att this place.

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