A net-zero wage increase for TWU workers would be “fair and appropriate” considering the totality of the circumstances, the nonpartisan Citizens Budget Commission said this week. In a report analyzing what could and should happen were the MTA and TWU face arbitration to resolve their ongoing labor dispute, the CBC said a compensation package should not cause fare increases, and the Commission explained in detail how TWU workers have enjoyed prosperity in a poor economic climate and should not expect to earn across-the-board wage increases.
The report, released on Monday and available here as a PDF, is framed as a grand what if. What if, as has routinely happened between the two sides, the MTA and TWU must go to arbitration in front of the Public Employment Relations Board to settle their differences? How would the PERB decide in a binding case?
Using the same five criteria PERB members must consider, the CBC analyzed the TWU’s current situation and the MTA’s financial crisis. Overall, they found the heavy rail operators and bus operators and maintenance staff are already the highest paid in the country and are often better off than New York City’s private employees when it comes to wages, health insurance and pension benefits. As TWU employees enjoyed raises of over 11 percent from 2009-2011, New York’s private employees saw, on average, pay bumps of barely one percent.
Furthermore, TWU compensation has “consistently exceeded inflation.” Since 1999, TWU raises have risen by 47 percent while inflation has increased by 38 percent. Over the past three-year contract, the raises have outpaced inflation by nearly 100 percent.
To compound the problem, the MTA is not in a position to suffer through more wage increases, the CBC notes. “Failure to achieve this [net-zero] target will widen the MTA’s operating deficit: each one point increase awarded to the TWU would increase costs by $42 million, if applied to setting wages elsewhere in the system. “An award along the lines of projected inflation – 2.2 percent in 2012 and 2 percent thereafter – would open a budget gap of $92.4 million in 2012, $176.4 million in 2013, and $256.4 million in 2014, approximately 2.25% of operating expenses,” the report says. “Since the MTA does not have the financial ability to pay any wage increases awarded with a greater cost than ‘net zero,’ riders are likely to bear the burden in the form of increased fares or reduced service.”
The net-zero wage increase then may be in the public good, the Commission believes. The MTA must, they write, have resources to “provide reliable service, preventing fares from becoming burdensome to riders, and securing decent compensation and work conditions for worker.” Efficient operations can accomplish this goal, and to that end, the CBC says, the TWU and MTA may have a serious discussion on one-person train operations. Ultimately, something as bare as work rule reform must be accepted by both sides.
In the end, the CBC issues a call for a net-zero wage increase. They write:
The findings indicate that awarding “net?zero” wage increases is fair and appropriate given the current economic climate, the fiscal outlook of the MTA, the burdens recently placed upon riders, and the high relative and overall compensation level of TWU employees. State and City governments have set a three?year wage freeze, with added employee responsibility for health insurance costs, as the pattern for settling expired public employee contracts. Applying this pattern to the TWU contract would not compromise the standard of living of TWU workers; the inflation rate is projected to be about 2 percent, and a three?year wage freeze will not undo the real wage growth that TWU employees have realized over the last decade. Increasing employee responsibility for health care costs, through increased premium?sharing or salary contributions, is also appropriate given the relatively modest contributions made by TWU employees as compared to other public and private employees.
Can it happen though? The TWU has not shown a public willingness to accept a net-zero increase in labor spending. Union leaders know such a plan would lead to stagnant wages or a work-force reduction, and that’s a tough pill for union members to swallow. For the public though, affordable and reliable subway service may just depend on it.