Four months ago nearly to the day, the MTA’s current agreement with the Transport Workers Union Local 100 expired, and since mid-January, the bulk of the authority’s workforce has been working without a contract. News from the labor negotiations has basically dried up, and the two sides are at a public impasse. With the potential for arbitration always lurking, recently developments have once again made me entirely wary of the process.
As the TWU/MTA stare-down continues, a minor arbitration award involving ATU workers could send some economic shockwaves heading our way while also offering an opportunity to disrupt the current negotiations. The award, issued earlier this week, concerns the period from Jan. 2009-Jan. 2012, the same three years covered by the crippling arbitration award issued for the TWU a few years back. Pete Donohue had a brief piece on the award which covers a few thousand bus drivers:
More than 3,000 MTA bus drivers and other workers will get 11% raises under a contract awarded by an arbitration panel.
The panel essentially gave the workers, represented by the Amalgamated Transit Union, the same deal 34,000 Transport Workers Union Local 100 members employed by the Metropolitan Transportation Authority won in arbitration three years ago. The ATU pact retroactively covers the period from January 2009 to this January.
The panel, in a 2-to-1 vote, said the MTA can afford the raises by tapping reserves, money slated for capital construction projects or savings from low interest rates. “While using some of these sources may be more difficult than others, the fact is that sources to pay the increase do exist,” the decision states.
For those interested in the entire decision, the 37-page explanation along with a short dissent is available here as a PDF, but Donohue’s summary is the point. Essentially, in a 2-1 decision, George Nicolau relied heavily on the decision authored a few years ago in the TWU case by John Zuccotti to reward the ATU with a retroactive raise. He spent pages talking about the arbitration request, a rather literal interpretation of the Taylor Law and the MTA’s current financial state. It’s one giant mess.
Essentially, Nicolau determined that “the public interest” is better off if the MTA takes some of its cash reserves that would normally go to cover weather emergencies and budget deficits that crop up over the year to give raises at a time when few other employees seeing their earnings increase. At worst, this pushes the MTA’s finances ever closer to a steeper fare hike; at best, it provides more ammo in an ongoing labor war.
The dissent was in fact highly critical of the award. “It casts a blind eye towards the catastrophic impacts that this devastating recession has imposed on the public,” Anita Miller, arbitrator and MTA Director of Labor Relations, wrote. “There is no balance in this Award between the expectations of the represented employees and the interests of the public. All of the undisputed intervening economic realities have been rendered essentially irrelevant in the minds of the majority. It simply is unfair to the public, which has already suffered through unprecedented service reductions and which is facing another fare increase in 2013.”
At this point, the award itself is what it is, but the whole process in which arbitrators ignore current economic conditions to find some justification for a wage increase serves as a reminder not to rush headlong into the abyss. The ATU feels empowered by their victory and so too does the TWU. “The panel sharply disagreed with the MTA’s cupboard-is-bare argument, asserting that the Authority could tap reserves, money slated for capital construction projects, and get savings from low interest rates through debt refinancing,” the larger union said. “Funny, these are just the points that TWU Local 100 has been making in our ongoing negotiations.”
Maybe the cupboard isn’t bare yet, but what it’s emptied, the people left footing the bill are the riders who don’t want to pay more and need the system to live, work and play in New York City. What public interests are being served here exactly anyway?
21 comments
Labor peace serves far more public interest than going into ever-increasing debt to finance gold plated, I mean platinum plated, I mean diamond encrusted mega projects, like building a parallel universe GCT directly underneath the real GCT, for the sake of a modest improvement in the convenience of a limited numbered number of rail commuters.
With East Side Access, you’re talking about the LIRR, which has totally different unions (they suck, but in a different way).
These discussions are talking about the subways and buses, where the TWU advocates raiding its own members’ pension plans and allowing the signal system to decay in order to give its members more cash today.
I love my transit worker friends but fact of the matter is this. Decisions like this cast a blind eye to the realities of the state of reality itself. People out there are hurting. People without the luxuries of unions going to battle and yes unions are a dying breed in labor and that can be both a good thing and bad thing. However since the private sector outnumbers the public sector and even though the public sector is too large as is with too much government money being spent. The ATU and TWU are being provided with a silver platter on how not to share in the pain that the riders who commute to private sector jobs experience day in and day out. Even some public sector employees who are employed by the city have given back benefits. How should they feel about decisions like these. Especially when the TWU public stance is to say that no strike means the TWU is even more on the side of riders. Really? How about some productivity increases or even letting some redundant jobs fade though attrition. Throw the “common” working man a real bone and stop posturing while bashing the high fare hikes to come while you pocket the money that comes from those hikes! [/dismountsoapbox]
To clarify some, there are still private sector unions out there and some powerful ones. 2 examples, UPS drivers and NYC building cleaners. Some of these folk ride the trains and buses operated by union workers.
It seems that the ruling is part of a rub at MTA for not being able to reach an agreement with its workers on its own. That plus the apparently awful work environment (psychologically) that exists at MTA, it’s no wonder they have such an awful time with a union. Management and non union employees have no choice but to take their sh*t.
There are some huge private sector unions. They seem to have more sense than the NY locals of the transit unions. The NY locals of the transit unions are mostly intent on destroying transit in NYC.
“Labor peace serves far more public interest than going into ever-increasing debt to finance gold plated, I mean platinum plated, I mean diamond encrusted mega projects.”
The capital plain is almost entirely funded by ever-increasing debt from this point forward. I believe the TWU argued successfully that the MTA can keep borrowing and borrowing to pay higher wages, and end the normal replacement part of the capital plan.
These are people appointed under law passed by the state legislature. They are destroying the transit system. The interest of future generations is served by a cutoff of funds and a shutdown, rather than a slow decline. Enough!
Looking at the decision, the arbitrators claimed that because the TWU got the big raise the ATU should get the big raise. So the next question is, what about going forward?
“In either event, the contractual results for the smaller units have always followed the pattern set by negotiations between the TA and the TWU.”
Of course that wasn’t a negotiation. It was another award.
Basically in each case, the arbitrators have decided to ignore the cost of the retroactive pension enhancements of 2000 and otherwise, which are only being paid for now, and the relative wages AND benefits compared with other workers. Also ignored is the impact on the quality of service, or the future. Only what the employees want and the “ability to pay” is considered.
The arbitrators are in favor of the 1970s.
Now in this environment, why would anyone be in favor of more money for the MTA. If more money isn’t allocated, service will continue to deteriorate and ongoing normal replacement maintenance in the capital plan will stop. If more money IS provided the same thing will happen, but MTA workers will get richer relative to other (non-Wall Street) workers.
OK, what the hell has allowed for this demented state law creating these blatantly biased “arbitration” panels? These panels clearly don’t satisfy the requirements of the American Arbitration Association.
I suspect it’s time for NYC to yank the MTA’s lease of NYC Transit and get control of its own subway system. But that would require a mayor who cared.
Enough of your relentless single-minded attack on working class urban labor. What’s destroying the transit system is a generation of MTA chairmen who couldn’t resist the urge to build pyramids. And politicians who see pyramid building in NYC as the ideal make-work bailout for well connected construction firms.
If you’re talking about the FSTC then I have bad news for you. The feds offered the money to the MTA to build that structure as part of the Lower Manhattan rebuilding effort. Other than that the MTA is currently building expansion projects. Minor ones but still expansion and not pyramids as you mention here. The argument you present carries very little weight.
The panel, in a 2-to-1 vote, said the MTA can afford the raises by tapping reserves, money slated for capital construction projects or savings from low interest rates.
Wow. The arbitrators are basically taking the same attitude that the politicians of the 1966-83 period took when it comes to the capital construction budget, which was that if the customers really couldn’t see the results of work being done because it was hidden away in the shops and tunnels, there was no reason to really spend all that money on it. The only difference is now that since all the cars are stainless steel, you can’t employ Bill Ronan’s strategy of just repainting them every year or so to fool the riders into thinking overall preventive maintenance is being done on the system.
(That also doesn’t get into the possibility that — with all the new money injected into the country’s economic system over the past couple of years, that once a recovery does start in earnest, the inflation level could rise sharply and there won’t be any savings from low interest rates to take advantage of.)
Generally I am opposed to giving large raises to unions, but in this case, it is quite different. The underlying problem is the MTA has no concept of what reality is (See the terrible conditions of the subway stations as exhibit A, followed by insane cost overruns as Exhibit B:, and last but not least, Exhibit: C a failure to upgrade equipment (Trains being just one example)). The cost overruns are exactly`what the arbitrators were talking about. when they talked about “Money slated for capital construction projects.” Simply put: $110m spent for Broadway-Lafayette/Bleeker Street station to add a platform and make it ADA compliant (They STILL have not added the uptown platform connection). This kind of waste is why the MTA’s Money Thrown Away line makes 100% sense. Until they get their financial house in order, they will continue to pay through the nose to contractors, unions and everyone else on the food chain. Maybe this award will be the straw that broke the camel’s back and make these guys (And the politicians) overhaul the entire system so we don’t have a Greek style collapse. If that occurs, 11% will be a cheap price to pay.
As I wrote a couple of days ago, the massive raises unionized transit employees are already getting, which the arbitrators did not count, and the inflated cost of unionized construction on MTA contracts, are driven primarily by the same factor:
Retroactively enhanced and (to a lesser extent for the MTA) inadequately funded pensions.
Pension costs are not more than 50% of payroll for NYCT, and that isn’t nearly enough given how deep in the hole the city’s pension funds are. I’m told the LIRR and MetroNorth funds are worse. The ATU drivers got a massive gift when the city assumed the hugely underfunded pensions of the private bus companies. The construction companies are seeking to have the MTA absorb the underfunded multi-employer pension funds for that sector.
The bottom line is, you can’t have one year in retirement for every year worked without doing it at someone else’s expense. Especially when no money is set aside and gains investment returns for enhancements that are suddenly, retroactively granted.
Some is going to be much worse off to pay for this. The arbitrators seem to want to exempt the current employees without honestly identifying their preferred victim.
“(See the terrible conditions of the subway stations as exhibit A, followed by insane cost overruns as Exhibit B:, and last but not least, Exhibit: C a failure to upgrade equipment (Trains being just one example)).”
The arbitrators have just ordered the MTA to not upgrade equipment and to make sure the subway stations remain in terrible condition. It’s right there in the ruling.
“Maybe this award will be the straw that broke the camel’s back”
When the subway system fails catastrophically? You may be right. Perhaps then someone will have the sense to replace the existing union locals.
Heck, the members could do it themselves if they wanted to, start a union with a saner attitude which actually advocated for better working conditions and more money for the MTA, rather than advocating for looting members’ pension funds, like the TWU does.
” Simply put: $110m spent for Broadway-Lafayette/Bleeker Street station to add a platform and make it ADA compliant (They STILL have not added the uptown platform connection).”
Mandated by federal law. The MTA has no choice but to do this. Now you’re wondering why the construction costs are always so high in NYC? Turns out it’s state bidding law, mostly. There were a couple of minor reforms to that, perhaps that’ll help.
Nothing can be fixed unless the state legislature is fixed, of course. *Nothing*. And fixing the state legislature starts with kicking the Republican gerrymandering gang out of the State Senate — but there are a lot more steps after that.
its so cute how quick Americans are to blame workers. you have:
ridiculously high for-profit health care (relative to other developed economies) which always is a sticking point in any labor contract, and sucks up funds.
– an underfunded transit system (relative to other large subway systems in developed economies)
– a poorly fund pension fund at the city (probably similar to some other developed economies, but certainly not all—ie japan, germany)
-increasing costs to live in nyc.
sure. I have not yet dug into the MTA books and scrutinized the arbitration decision, but there are always macro-level problems which engender labor conflicts and result tough decisions. In the US, 10 times out of 10, the workers get screwed. (check real wage trends vs. inflation since the 70’s) So, why do you guys go for head of the worker instead of the larger issues which create the conflict?
it’s so cut how to some, there’s always money for raises, golden benefits and pension bumps. find some sucker to pay for it, right?
“Its so cute how quick Americans are to blame workers.”
You know what the one percent are? You know what the Wall Streeters are? Workers. Not owners. All the excess money they are getting comes at the expense of the shareholders. That’s why the dividend yield on stocks is just 2.0%, vs. a historic average of 4.3%.
Are you doing to say “how dare we lesser people complain?” They’ve used their political power to get richer at the expense of other workers. So have the unions. They are destroying the private sector. You are destroying public services.
You both claim to be doing Gods work, and threaten to make us even worse off if we complain.
Oh, we absolutely agree that single-payer health care would solve a lot of problems.
However, that doesn’t excuse the “arbitrators”, with their absurd claim that the MTA should borrow money to overpay workers, while allowing the signal system on the subway to decay until it breaks. That’s just stupid. If the state government functioned, it would throw out the arbitrators’ rulings and change the entire law regarding these negotiations. But if the state government functioned, it would also provide enough money to the
MTA.
This is really bad behavior on the part of the arbitrators, and is leading to the inexorable breaking of the ATU and TWU locals in NY.
After enough years of this behavior, it will become clear that these union locals need to be removed; perhaps after the next catastrophic breakage of the system because maintenance funds were diverted to fund exorbitant raises for the workers who were falsifying signal records. The pensions are gone already; the TWU actually advocated raiding its own members’ pensions, and that’s pretty much the end, those pensions are toast.
The arbitration judgment seems fine to me. The TWU contract is a good model for the smaller ATU deal, and the MTA is hardly broke or strapped for cash. It’s not reasonable to me that the MTA has the ability to provide these benefits for 34000 workers but not 37000. Nor do I think an agency running close to $30 billion in expansion/growth capital projects can really cry poor. And as a last resort, it has billions in potential additional fare revenue it can raise if it actually has solvency problems.
Obviously the original TWU deal was unfortunate but this decision was not a place to refight that battle. It was the MTA’s foolish mistake to agree to arbitration in that TWU negotiations. We can hope it will not make similar mistakes this time around. But with the MTA totally dependent on cash from the state and showing no signs of developing a self-sustaining revenue model, I’d expect that legislators will force the agency to cave to the unions once again.
The agency most certainly is strapped for cash. It’s true they could raise fares. I believe you should go and advocate for that fare increase you support.