Earlier this summer, word leaked out that the MTA may cut sever its Long Island Bus service. Owned by Nassau County, the bus routes just east of Queens are operated at a tremendous loss by the MTA, and the county pays just $9.1 million out of the agency’s $133 million operating costs. Now, as the MTA’s budget problems are coming to a head and the Long Island Bus remains in the crossfires, the Nassau County Executive has called for Jay Walder’s resignation.
Speaking earlier today of the problems plaguing the MTA, Edward Mangano issued a stunning call for the authority’s CEO and Chairman’s head. “New Yorkers are paying higher fares, businesses are paying a job-killing payroll tax and LI Bus faces extinction as a result of Walder’s threats,” Mangano said. “Taxpayers deserve accountability, and for that reason, I am calling on our gubernatorial candidates to pledge new leadership at the MTA in January.”
As Newsday’s subscriber-only article notes, Mangano’s posturing stems from the dispute over the bus company. The MTA wants the state and Nassau County to fork over $100 million to cover the LI Bus operations costs while Nassau County is a party to the lawsuit challenging the constitutionality of the payroll tax. Apparently, it’s beyond Mangano’s ability to understand that the payroll tax was approved long before Jay Walder returned from England to run the MTA.
Meanwhile, Mangano, who makes around $175,000 a year, criticized Walder’s salary. “This Labor Day, families sat around the barbecue worrying about how to afford to get to work because of Walder’s mismanagement,” he said. “Earning a $350,000 salary plus a generous housing allowance, Walder has taken taxpayers for a ride.”
Of course, Mangano failed to mention that, if Walder is removed from the MTA in January, he’ll be owned another $350,000 as part of his Golden Parachute payments. How would the taxpayers stomach this move?
Jay Walder has not had a perfect tenure as the head of the MTA. He hasn’t had the best of relationships with labor, and although he was brought in on the promise of financial stability and with a mandate to modernize the subway system, he has had to face a crushing financial crisis brought about, in part, because of the actions of the New York State legislature. He is a lifetime transit planner with the credentials to head the MTA and has taken the economic bull by the horns as much as anyone in his position has. He’s made some question hiring decisions and has had to fire a lot of people, but he’s not going anywhere.
Edward Mangano knows this just as you and I do. Mangano might not know that the MTA’s problems stem from state inaction. Why should the MTA spend $100 million for Nassau County bus service? Because Nassau County has spent a decade reducing its operating contributions to its own bus system, and Mangano is just part of that problem. Like every New York politician though, he’d rather just blame someone else.
34 comments
Dear Mr. Mangano,
Let’s do a little thought experiment. Assume Gov. Paterson fires Jay Walder. The next day, he calls you to see if you want the job. Would you be willing to have your tenure in the position dependent on being able to scoop $100 million out of Nassau County’s budget? If you would not, why do you imagine Jay Walder would?
Sincerely,
Straphanger
You mention, as a critique of Walder, that he “hasn’t had the best of relationships with labor.” Unless you actually mean that he has been too cordial with labor — which I assume you don’t — I find this critique unfathomable from anyone who spends a lot of time thinking about mass transit.
Any possibility for improving mass transit around New York hinges primarily on one thing, getting far more productivity from workers at far lower costs. It is, quite simply, the only issue that actually matters, even a little bit.
And the only way to achieve higher productivity at lower cost will be to displease the unions. That’s not to say that annoying the unions is a goal on its own. If you annoy them but fail to win important concessions, then you’ve obviously made life worse rather than better. But any serious improvements will necessitate massive union concessions and that will necessarily involve massive union outrage.
The thing is that serious improvements don’t really require “massive union concessions”. They require concessions to modern operating practices which require fewer employees per train. They don’t require cutting salaries or benefits.
If funding were present, they wouldn’t even require actually firing employees, as the employees could move over to work on the new service expansions. Grr.
Actually, using modern operating practices would require massive union concessions. The number of employees per train isn’t decided by the MTA on the basis of how many people are needed to actually operate a train. It’s negotiated.
Any increase in productivity that would allow the total MTA workforce to decline without a corresponding decrease of service, must be negotiated. If I were to come up with a magic work flow strategy that would allow one MTA employee to do the work of ten — all while putting in less effort than any one employee puts in now, it would be a violation of the contract to implement said policy.
Well, depends on your definition of “massive concessions”.
I don’t consider abandoning featherbedding to be a “massive concession”. A concession, yes, but not a “massive” concession. A massive concession would be reducing all employees to minimum wage and eliminating their benefits.
Yeah, because we all know that all of MTA’s problems are caused by its employees, and as soon as we totally and completely break the Union, a highly qualified work force will flock to New York by the thousands to operate trains and busses for minimum wage. [/snark] Malbone Street, anyone?
I truly don’t understand people who seem to think that MTA’s problems are 100% caused by the Union. It’s just delusional. Sure, there are work rules that could stand to be changed, but if you think that those changes will be made by breaking the Union… instead, that’s a recipe for things to get even worse – having observed other cities, I’m just stunned by how poor the labor-management relations are here – step one should instead be to develop a good working relationship between the parties, so that you can at least have a rational discussion all of these matters. At any rate, changing all of those things is just a small part of the structural deficit caused by Albany starving the MTA of money and the 40-year backlog in deferred maintenance.
But I suppose just blaming the employees is at least simpler. By the way, this post wasn’t even about labor relations. Or is this just yet another opportunity to bloviate about how the evils of organized labor?
Given that the MTA gets several hundred qualified applicants for every job opening it posts — and did even before the economy went south — I think it’s very reasonable to think they could cut wages and benefits by a third or more without having any trouble finding workers who are at least as good as the current ones. That would cut total MTA expenses by 20 percent, and it doesn’t even consider how many jobs you could cut — without any loss of total output — if managers were able to push for efficiencies without negotiating every move they made. It’s just a guess, but I’d say you could cut MTA workforce by 30 percent or so over 10 years.
You say you believe that the elimination of the union would make things “even worse.” Can you give an example from any industry, in any area of the world, where a company broke an employees union — or moved to escape a union — where total labor cost per unit of output went up rather than down. Most of what I’ve read suggests that labor cost per unit of output falls from about a third to a half. That would, of course, be “even worse” for the people at MTA who make six-figure salaries for work that requires a grade school education and the ability to retire a full decade earlier than the rest of the world. But I think most riders could live with it.
On the contrary, Andrew: when you run a modern railroad, you need to attract the best people, which means you can’t pay Wal-Mart wages. You need bus and train drivers, cleaning staff, and maintenance staff who can reliably turn buses and trains around quickly; you need employees who do not cut corners; you need a culture of courtesy toward customers.
A good American model here would be Southwest, or perhaps JetBlue. Both companies emphasize lean production over low wages. While JetBlue is non-union, Southwest is heavily unionized, with many of its employees represented by the TWU. This hasn’t prevented Southwest from being highly profitable. On the contrary, American airlines that tried to follow the Ryanair model of being a cheap asshole to everyone, such as SkyBus, folded or are very small.
I disagree with your assertion that the MTA pay above market wages for several reasons.
1. Most MTA jobs have maximum performance levels. Employees can meet them, but they cannot do any better, no matter how intelligent, hardworking or skilled. Running a subway train is unskilled work that requires only that work two buttons, an accelerator or a stop button. If you are smart enough to press the accelerator when the door is shut and stop when you see a red light, another train or a station, you can be a subway or train driver. It is the definition of unskilled work and paying more to attract highly skilled workers makes no sense whatever.
Most of the positions in the MTA are like this. You could train a dolphin to open and close the subway doors or check tickets in a train. Being a bus driver is slightly more complex, there being traffic and pedestrians to contend with, but once you’re smart enough to operate the bus efficiently, something that any high school graduate can do, that’s it. Steve Jobs could not be one percent more productive than the typical MTA employee in most jobs.
2. In those positions MTA positions that do not have maximum performance levels, those jobs where people could be more productive via intelligence and diligence, union contracts eliminate any incentive for hiring such people or for such people, when hired by chance, to use their industry and intelligence to be more productive. Why? Because union work contracts are written such that people who are not particularly intelligent or diligent will easily be able to meet the obligations of their jobs. No contract will ever be written with productivity targets set high enough that any large number of people will ever find themselves unable to do the work.
What’s more, even if you do end up hiring a fair number of bright employees, they have no incentive to be one iota more productive than the least able of their colleagues. Contracts are written so that you cannot make an extra nickel of money by being more productive, nor can you win your way to better jobs faster. The only thing you can earn by excellence is the scorn of your colleagues, and no one want that.
3. Even with the MTA currently paying far, far, far more than market clearing wages for mostly low skill (and some higher skill) positions, it does not attract more skilled employees than it would by paying far less. Why? It’s hiring process is set up specifically not to hire the most skilled employees.
The requirements that people must fulfill to qualify for MTA work are purposely set so low that virtually everyone qualifies with a top score. Thus, you cannot use merit to distinguish among the hundreds of people who apply for each open job. At best, candidates are chosen by a virtual lottery, so the process is essentially random. At worst, the process is manipulated to create patronage jobs.
I’m not sure how anyone who thinks as much about transit as you clearly do is not aware of this. What have you ever seen from an MTA employee to make you think, “Wow. This is why we pay a third more than we have to and choose the most elite from hundreds of candidates for each job. This is a truly brilliant and efficient worker.”
4. Even if you believe the MTA could transform its hiring process to make it truly merit based, at least for those jobs where merit would actually lead to better performance, you still would not want to pay so much above the market-clearing wage as the MTA does. The goal of companies that pay the market wage is generally to get two or three truly qualified applicants for each opening. The goal of companies that pay higher wages to attract truly superior workers is generally to get between 10 and 15 qualified applicants. No sane organization sets wages high enough to attract scores of applicants for each job, let alone hundreds. That’s just a sign that you’re overpaying by massive amounts.
5. Pointing out that some private businesses manage to be reasonably efficient despite union workforces does not indicate that government agencies can do likewise. Southwest is in a competitive industry and its unions know that if they ask too much, they will cause the company to loose money, which will ultimately cost them their jobs. Government workers rarely have to worry about this. The subway cannot go out of business. It cannot fire all its workers and move to China. It can lose a few of its customers to cabs or cars, but only a few. There simply are not enough cabs or road space for everyone to leave. So there is no real danger in union overreach, particularly when unions have so much power over politicians. (NYC’s total number of employees is considerably higher than the total number of people who voted in the last mayoral election. It doesn’t mean the unions get whatever they want, but they certainly have a lot more protection than their peers in the private sector.)
What I cannot understand is why IQ smart people who support the expansion of government services also support the very thing that makes it impossible to expand government services — unions that push the cost of providing said services beyond what we can afford.
A century ago, when people produced less and so had far less money to spend on transportation, they were able to afford the construction and operation of a massive subway system. Today, when people have more to spend AND are more productive, when a new subway should be far cheaper and easier to build and maintain, in inflation adjusted dollars, than it was 100 years ago, when the costs should seem laughably small, we cannot afford to build anything.
And it’s due to just two things — absurd labor costs and absurd amounts of red tape.
Worse, we could fix it, if we had the will, and build these things for 90 percent less than they cost now (as they’re doing in Madrid, which is hardly a place where workers are paid poorly and forced to brutal levels of productivity) but the very people who claim to be the most adamant supporters of transit are the very people fighting against the changes that would make it viable.
First, let’s do a fact check. How much do profitable Japanese railroads pay? It turns out they pay marginally less than NYCT; relative to the national wage level, they actually pay more.
Now, you’re right that union rules make it hard to increase productivity. But this has nothing to do with wage cuts. The companies that try to improve productivity by paying below-market wages end up incurring so many customer complaints that the only people who use them are those who have no other options. The success stories come from companies that pay similar wages to their less efficient competitors, but know how to get things done with one employee that the others get done with five. Compare Southwest with American, Toyota with GM, or JR East with the LIRR.
The fact that Southwest is private doesn’t make it a bad example. In fact, private companies have sometimes collapsed partly due to union pressure, for example GM and Chrysler. Even non-union companies can overpay employees and collapse, for example the entire finance sector. Big businesses with national scope, of which Southwest is increasingly one, routinely count on government bailouts.
I’m well aware that Spain builds things for one tenth the cost of New York. You don’t need to tell me this. If you read what Madrid Metro’s CEO says about it, you’ll find that he talks about choosing contractors carefully (which is illegal under NY law), doing the design with a skeletal in-house staff, using the correct machines, and signing contracts that make it easy to recover from unexpected cost escalations. Nowhere does he mention low wages; that would be absurd, since Spain is a low-inequality country.
1. You have not addressed my assertion that a huge percentage of MTA workers do jobs for which productivity gains are not possible. Nor have you made any argument why we should pay high wages to people who do low-skill jobs with productivity ceilings — and I’d guess that roughly half of all MTA employees are doing something like driving some vehicle or opening the doors or something else that can’t be much improved. Why should people be making 100k a year (which they do with benefits) for a job that’s no harder than working at McDonald’s or Wal-Mart, particularly when people would line up to do the job for far less? How is that fair?
2. For jobs where it’s possible for great workers to be incredibly productive, I have no problem whatever paying very high wages — so long as those wages are based on productivity and the only people who make very good wages are also very productive. When I say wages are too high, I don’t necessarily mean that individual workers make too much per year. I mean the MTA pays far too much money in wages/benefits for every unit of output it gets. In cases where that imbalance can be altered by increasing productivity rather than cutting wages, I’d favor that. But I don’t think the MTA should pay a nickel more per unit of worker output than a shrewdly run private employer. You talk about it being somehow unfair to workers to pay small wages to unproductive people; I think it’s far more unfair to force taxpayers (with threat of jail) and riders subject to MTA monopoly to overpay for labor. People who wish to give to charity can send their money to the ones the find most worthy. I doubt many would choose MTA workers unless they were forced.
Also, lots of people concede the point that the unions make it hard to increase productivity and then move on — as if that was a minor point. Minimizing cost per unit of labor output is vital to a functioning system. You can’t have one if you can’t solve it. How should the MTA convince the union to accept productivity increases if not by confronting the union and beating it in conflict?
3. Almost no labor economist would agree with your assertion that it’s in any way helpful to compare how unions work at public and private entities. Private entities with overreaching unions can go out of business, particularly when it’s reasonably easy for better managed competitors to challenge them. The examples you mention of GM and Chrysler are both apt. Public entities with overreaching unions do not collapse. They can simply raise prices and/or force taxpayers to give them money. The MTA’s unions are far worse than the UAW but there’s no danger whatever of the MTA going out of business. That gives public sector unions incredible power to victimize both their customers and taxpayers.
4. It is hardly surprising that the folks in Spain don’t mention low labor costs per unit of output as a key reason for their success. That would be inviting strikes. No sane boss reminds his workers that they get paid less (or that they work harder for similar pay) than other guys. Still, labor costs account for more than half the total costs of even the most capital intensive capital projects. So if Spain is getting things done for one tenth the cost, I’d be happy to be you dinner that they’re paying a lot less in labor costs per unit of output. (This is doubly obvious when you consider that the non-labor parts of capital projects — the physical materials and all — cost roughly the same around the world.)
1. On the contrary, if you compare payrolls in New York and Tokyo, the gaping difference is staffing levels, not wages, which are about equal. In Tokyo, trains have one employee, and sometimes two. In New York, they have two on the subway, and six on the commuter trains. On top of it, Toei uses one third fewer train drivers than NYCT per revenue train-hour.
2. JR East and Tokyo Metro are shrewdly run private employers; Toei is a shrewdly run public employer (yes, these exist). Don’t compare the subway to a random business that can’t tell rolling stock from tracks; compare it to operators in the same industry.
3. GM and Chrysler got rescued. And I don’t know which labor economists you read, but there are a lot who are pro-union. Some of the most strident neo-libs support card check and say explicitly that the point of privatization and deregulation is to increase productivity, not cut wages.
4. Spain’s wages aren’t one tenth of New York’s. The way Spain holds down costs is by getting competent contractors, who don’t profiteer and who don’t use six people to do the job of one. Union power is generally stronger in Europe than in the US, and yet even countries where unions are nearly omnipotent, such as Norway, have very low construction costs by US standards. You’re barking up the wrong tree.
So we’re all agreed: the problem is *union featherbedding*.
It’s like the old railroad unions demanding that diesel engines carry a “fireman” (to fill the steam engine with coal, dontcha know).
If the TWU will agree to stop featherbedding, the MTA can afford to treat it quite well in most other ways.
By the way, the Madrid Metro CEO’s writeup can be found here. Sorry for the double post – I posted my above comment on a different computer, on which I don’t have this link bookmarked.
There is great responsability in operating a bus or a train. It’s not as easy as people may think. Do you relize some train operators operate trains for more than ten hours with only a fifteen minute break because the rail road is facing major problems.( i.e. swich problems, track fires, weather emergencies, signal problems and so on.) Transit workers also have a very high rate of work related deathes. Employees have been struck by trains, electrocuted and also have a very high rate of lung related illnesses due to breathing steel dust and fumes.Train operators as well as bus drivers always hear the feed back from passangers if the bus or train is behind schedule. The passangers vent at employees this Saying “this is were my fare increase went” for worse sevice. Then you have the people who want spit or hit the employees because of delayed service. People do not understand nor will they ever understand what it would feel like to have a person jump in front of your train or bus. The long term effects it could have on an employee. As well as working 24 hours a day seven days a week 365 days a year. Transit employees work every holiday as well with this being a great impact on family life. This is just a brief descripition of what a M.T.A worker does. Then there are track workers who work underground at temps over 100 degrees in the poorly light tunnels breathing in steel dust with a high rate of hearing loss. You also have third rail workers working with 600 volts of live power to to repair tracks and broken rails to keep the service running for the rush hour service. These are just some of the things people do not know about transit workers. When i was a kid i thought how kool it would be to be a train operator. I thought they just drove the trains all day. Then as i got older i relize they have to bring trains to yards fix and trouble shoot trains that break down in route as well as add and cut trains in half at yards bring them to repairs shops and so on. So with all the facts in place I feel transit workers deserve every penny they earn. The real problem is the over spending and delayed dead lines that cause massive amount of overtime to meet the dead lines while many of the work is being done by outside contractors who are making millions of dollars for shady work that goes thru the system as adaquate to keep good relations with shady companies. Thats where the real money is being wasted on bogus outside contactors who never meet the dead lines and buy supplies at over inflated prices.
Don’t waste your time. I stopped reading after he compared transit work to walmart or McD. I don’t think it was hyperbole. He really doesn’t know what he is talking about.
Driving subways is a minimum skill job. How many hours of classroom training do you get? 2000 hours or 20? There are 100s of candidates waiting for MTA jobs if you don’t like it. Anyone who defends $27/hr plus pension plus guaranteed OT must love their union made MTA salary. The so called dangers of being a public transit worker are no more than cutting yourself with a box cutter opening boxes in a supermarket, burning yourself on the burger grill or deep fryer, or driving a taxi. No worker at the MTA is asked to run into a burning building, or deal with a thug with a gun who won’t goto jail alive, or take IED hits in Afghanistan ($18K for a private per year, compare that to an MTA wage). All of which pay much less than an MTA job. Let the MTA salaries be market wages. When there aren’t enough candidates, thats when you up the salary, not because the union demands so.
As evidence of what Aaron is saying, the MTA board voted to giving sweet deals to real estate billionaires for the Hudson Yards and Atlantic Yards — deals that could of yielded hundreds of millions more.
You’re right on Atlantic Yards and wrong on Hudson Yards. The Hudson Yards deal is supposed to generate $1 billion for the MTA as long as the economy hits a few key indicators. That’s far closer to the true value of the land and near the top the MTA could expect to get for it.
Atlantic Yards is just a debacle though.
I’ve always wondered what sort of political pressure or bribery was used for the Atlantic Yards fiasco.
Well, anyway, that was all done by the MTA Board prior to Walder.
What’s also needed is better management. MTA management is bloated, even with this consolidation of back office functions. And, MTA needs qualified people, not someone that Paterson made Walder give a job in his agency. The MTA has hsitorically been a dumping ground for political hacks, and this needs to change. Also, the piss-poor attitude that pervades the agency needs to change. Lastly, policy and procedure needs to be re-examined and streamlined.
More grandstanding from a puny politician with no (express) grasp of reality.
so the republican taxcutter wants others to pay the bills.
Exactly. But remember, he’s a NASSAU COUNTY taxcutter. His main objective is to save the county money – or at least to give the public appearance to his constituents that this is what he’s trying to do. His job is to push a solution that costs him the least amount of money, not to push a solution that shares the burden equally or fairly.
A made up phone conversation.
Robbert… You mean I’m going to start paying for a transit system in the county where I’m executive?
Jay… If you don’t contribute more county money, I’ll pull the remaining finantial support. You need to lern how to run LI bus without MTA DOLLARS.
Robbert… Jay, how do you expect me to do that? I’m trying to shrink counnty government.
Jay… I don’t care how you do it, oh wait; didn’t you hier friends & family into blowted government jobs that they were unqualified for? You can start by cutting there.
Robbert… How dare you! as he slams down the phone.
Robbert later on the phone with several MTA board members…I want Jay fired! He dissed me & my family.
Meanwhile in the back of his mind, hell I don’t care if LI Bus goes away. It’s an unnessessary government service that nobody uses.
I think you’ve got a few misconceptions. First, his name is Edward Mangano, not Robbert. Second, the county does pay for the MTA: in real-estate taxes, payroll taxes, telephone-bill taxes (really!), in addition to per-use fares and tolls. Not that I’m defending Mangano’s position, but that’s how he sees it, and that’s how much of the public sees it.
I forgot it was Ed not Robbert. I was just making sarcastic humor.
Westchester and Suffolk residents also make those same payments to the MTA, but their counties operate their own bus services.
Nassau, rather than operating a bus service in-house, contracts it out to MTA Long Island Bus. That’s on top of the generic MTA funding, which also goes towards the LIRR.
Mangano is another far left zealot…Flush him down the toilet in the next election..
Mangano is a Republican. He’s far from a far left zealot.
“This Labor Day, families sat around the barbecue worrying about how to afford to get to work because of Walder’s mismanagement.”
Yeah, the MTA’s budget problems are entirely the fault of a guy who’s been in charge of the agency for all of a freaking year. Nothing to do with the state legislature or anyone else involved with the agency for the past decades, it’s all Walder’s fault. GFY Magnano.
It’s apparent that transit workers are the new welfare queens and scapegoats.
The MTA’s financial problems does not stem from workers suddenly earning too much money. It’s due to two factors: real estate revenue falling; and, the State and City cutting subsidies.
Over the years, this nation has believed that cutting tax-rates on the wealthy produces prosperity. While it certainly has been prosperous to the wealthy, everyone else needed to pickup the tax slack that the wealthy no longer paid. Since most middle-class people’s incomes have been stagnant, extra taxes is a burden that they can’t afford.
Budget strapped States are a direct result of cutting upper income tax rates. Live with it or change it.
Well, I agree with everything you say.
There is still evidence of featherbedding at the MTA however.
[…] up, and no one likes that. As I reported a few weeks ago, Nassau County Executive Edward Mangano issued a call for Jay Walder’s resignation, and Nassau County has begun to accept bids for a privatized bus […]