Transit Labor

As the hot summer days melt away, the MTA and its unionized workers are rushing headlong toward a labor battle. The authority, as we know, wants to keep labor costs steady, cap what it views as runaway pension spending and, if possible, halt or curtail wage increases. The union wants the polar opposite. While the two sides recently worked together to push Albany to approve a Transit Lockbox bill, the fall negotiations will be long and bitter.

In the build-up to these negotiations, battle lines are being drawn, and Monday’s Daily News featured the first salvo. In what was frankly an odd piece, Pete Donohue highlighted the perils of being a transit worker. Starting with the story of a 1995 station booth torching and mentioning a recent attack, he noted the incidents of violence perpetrated against transit workers by irate customers. These included token booth torchings in 1979 and 1988 as well.

Meanwhile, the article mentions some long-term statistics as well. Since 1947, 239 track workers were killed on the job, Donohue reports. It also, he writes without citing actual numbers, “seems a day doesn’t go by without someone jumping or falling in front of a train entering a station.” It all builds to one conclusion: “Straphangers shouldn’t be outraged that transit workers will at least ask for a cost-of-living increase. There should be outrage that the MTA will make a strong push to deny them one.”

If only it were that simple. This labor battle isn’t really about cost-of-living increases or worker safety. It’s going to be about worker productivity, job flexibility and personnel staffing levels. It will be about securing maximum efficiency from dwindling numbers of workers, and if the MTA is able to wrest the concessions it wants from the union, it will be far more likely to consider that cost-of-living wage that Donohue holds in such high esteem. (Anyway, as Larry Littlefield noted in the Streetsblog comments, it would help the argument to at least explore how transit workers’ wages have increased vis-a-vis other workers over the past few years. That’s an argument missing from the early discussions.)

So what then exactly are the real issues? Regular SAS readers will now them well. The lasting image of station agents is that of a worker fast asleep in a deserted station. The MTA will likely want to expand the role of those remaining station agents. Should they be required to leave their booths? On the flip side, what extra safety precautions can the MTA can guarantee? The overarching concern though is one of use: Do we even need as many station agents as we have?

Next come concerns over staffing levels. Do trains need a conductor and a driver? When will New York City embrace OPTO? Why have two people do the job of one? In a similar vein, why are the individual labor roles so limited? People who clean stations don’t clean trains and vice versa. The MTA will look to exact more productivity out of its labor force.

Finally, what of escalating pension costs? Should the MTA expect to sustain a slew of workers who can retire at 55 with full benefits but then live for another 25-30 years? The agency isn’t operating with much fiscal leeway, and if it has to pay a current labor force and a retired labor force, operating budgets are going to suffer.

In the right context, a cost-of-living adjustment and more safety precautions should be non-issues, and in that sense, Donohue is right on the money. Negotiations, though, are a constant give-and-take, and until both sides recognize that reality, the divide between them may be a deep one indeed.

Earlier this week, when the Republican-controlled State Senate voted to repeal the payroll tax, I accused them of playing politics poorly with the MTA. I’ve already explained why Sen. Lee Zeldin’s fiscal claims are pure fantasy, and I’m not the only one eying this measure with skepticism.

In The Post today, Nicole Gelinas takes the Senate to task for missing what she feels are the right issues. First, Zeldin’s charges that the MTA could save $1.4 billion seem to resemble nothing approaching reality, and second, she wants to see state leaders getting tougher on wages and employee benefits. I’ll excerpt extensively for the purposes of discussion:

On Wednesday, Senate Republicans fulfilled a longtime promise, voting to slash the tax roughly in half: Their plan would exempt small businesses and schools come January, then end the tax in the suburbs over two years, while reducing it by a third within the city. But the bill has no chance in the Assembly; all the GOP has done is remind us that the shift of party control of the Senate only changes the sound of the grandstanding. The Republicans are no more likely to stick up for taxpayers and riders against public-sector unions than were the Democrats.

Sure, Sen. Lee Zeldin, the freshman Long Islander who has pushed hardest for the bill, sounds good. He says correctly that the MTA can be more efficient, sell off real estate and explore some privatization. But the MTA is already doing the first two: Headcount is down 4,066 people since 2008. Even if it cuts 4,000 more, it would still face a $660 million annual deficit by 2014.

Plus, Zeldin and colleagues are tiptoeing around the elephant in the room: Albany has no idea where to get the $9.9 billion needed for the next three years’ worth of investments in rail cars and buses, plus construction projects like bringing the Long Island Rail Road into Grand Central. Zeldin notes gamely that MTA Chairman Jay Walder can save bucks on capital. But even if Walder saved 20 percent, Albany would need to come up with nearly $8 billion. That’s an extra $520 million a year in debt costs.

The senators claim some of their tax repeal is pain-free. But this is fantasy: They’d give the MTA $100 million in revenues from New York’s carbon cap-and-trade plan — money that may well not materialize. And they’d restore state aid to the city, with the provision that Gotham devote $150 million to transit. That’s moving money around.

If the GOP were serious, it would address union-labor costs. In three years, MTA pension and health costs will rise 30 percent. It’s not just a city issue; suburban railroad workers enjoy benefits not available in the private sector. But in Wednesday’s debate, senators talked everything from MTA “mob infiltration” to “criminal accounting” to whether tax-paying is “patriotic.” Nobody said that the MTA’s workers should pay more for health care, saving $150 million, or that pensions for new workers should be less generous.

On a three-year wage freeze, Zeldin was less than firm, telling me that “I would support just about anything that the MTA and the unions agree to, provided it’s fiscally responsible.” He said that pressure should come from the popular governor, since “to do something that impacts large unions, it can’t be just one senator leading by the chin.”

GOP lawmakers, as usual, are gung-ho on the tax issue. But on the union medicine needed, they profess that it’s the MTA that has to come up with ideas. The MTA, in turn, knows not to ask for anything anti-union that Albany doesn’t support.

Democrats, who were too busy discussing Fernando Ferrar’s mustache, have been no better, she says, but that’s seemingly beside the point. No one in Albany is willing to push either the MTA or its unions to make some badly needed concessions.

Now, I’m not a stridently anti-union guy usually, and I’m certainly not as against organized labor as Gelinas and the Manhattan Institute are. Yet, it’s clear that the MTA has a labor problem. It cannot keep doling out wage raises and full pensions while the rest of its financial picture declines. It cannot become a welfare institution that cannot provide adequate transportation service because too much of its budget is tied up in employee compensation. Fiscal responsibility will start with better payroll measures.

Ultimately, the MTA should be looking at ways to streamline operations through OPTO, through overtime control and through better collaboration across departments. It’s slowly getting there, but it’s going to need political support to do so. Will the Governor step up? Will the Senate? Will anyone?

Every year, a story similar to this one comes around. The Daily News or The Post writes about an MTA employee who uses overtime to pad both his annual salary and his pension. Feet are stomped; fists are shaken; and nothing ever changes.

Here’s this year’s version as reported by two Daily News reporters:

An LIRR engineer punched his ticket on the MTA gravy train again, pocketing nearly $175,000 in overtime and other perks in 2010 – his third straight year as one of the agency’s top earners. Though Dominick Masiello’s base salary was $75,389, he took home more than triple that amount – a staggering $250,401, payroll records show.

The monster payday was nothing new for Masiello, 57. For the past three years, the Long Island man has ranked among the top 10 highest-paid workers in terms of overtime and extras. In 2009, he raked in $147,514 in overtime and perks on top of his $75,389 salary. The previous year, he scored $160,000 in extras to pad his $73,193 salary.

Masiello retired from the Long Island Rail Road in December, but he still managed to take home a quarter-million dollars for the year – putting him among the MTA’s top 10 best-compensated employees in 2010, records show…Masiello defended his haul, saying union work rules allowed him to rake in big bucks. For example, he made an extra day’s pay when he was moved to a different station. “There’s nothing to hide,” he said from his modest, two-story brick home in Port Washington. “I worked hard for that money.”

The story makes more sense when you realize that worker pensions are based off of an employee’s final three years of earnings. It makes sense for those on the verge of retirement to pad their salaries with overtime in order to secure a more lucrative payoff after they hang it up.

Masiello wasn’t the only one taking advantage of the system. A few others cashed in on overtime and unused sick days to triple their salaries, and the MTA says it can’t do much about it. “Pension padding is an issue that we are trying to address through collective bargaining, but many of our pensions are legislatively mandated,” an authority source said to the News.

There’s certainly enough blame to go around here. The MTA’s management should attempt to approve and schedule overtime in such a way that puts an end to this practice while the union should be willing to reform its work rules. This is bound to be an issue during the looming collective bargaining sessions as the authority is hoping to change the way it does business.

Meanwhile, over at Market Urbanism, Stephen Smith this weekend explored five work rules that harm transit operations. The ones he explored aren’t quite as applicable in New York as they are elsewhere, but he focuses on how cross-utilization is not allowed and overtime abuse as well. With regards to the MTA, we see how station agents aren’t tasked with cleaning or security, and we see how work roles in maintenance shops hinder productivity as well. As commenters on Smith’s article noted, work rules have also prevented the MTA from adopting OPTO technology or better proof-of-payment systems on board commuter rails lines.

Ultimately, as the MTA will work this fall to secure capital funding, it will also try to improve the way it spends dollars on its payroll. While the authority has trimmed payroll by around $100 million through staffing cuts, labor efficiencies could push those costs — currently at $5.11 billion — down further. To save the system, the two sides will have to find an agreeable middle ground.

In a somewhat surprising move, the Regional Plan Association has joined with city business leaders to call for union concessions from organized construction workers. In a report released to the city yesterday and entitled “Construction Labor Costs in New York City — A Moment of Opportunity,” the RPA urged unions to accept reforms that would significantly cut costs at a time when major projects are in jeopardy over rising price tags. With the MTA’s own labor fights with transit workers looming, the RPA’s stance could have a major impact on future negotiations.

While the report isn’t yet available to the public, Charles Bagli of The Times offered up a summary. He reports that the study calls for “major concessions from the unions that dominate the construction industry.” It says that “cuts are needed to allow major projects to move forward” and calls for the reform by eliminating “obsolete work rules and featherbedding; by adopting a standard eight-hour day for all building trades; and by reducing benefit packages.”

Robert Yaro, head of the RPA, spoke out in favor of the report. “Given the wrenching changes in the real estate industry since the recession,” he said to The Times, “a growing number of builders have found that they can no longer support high labor costs…This is not about what union workers are paid. It’s about work rules and productivity. Those are things that should be changed.”

Bagli has more:

The association’s report says developers and owners, who absorbed the higher costs of union labor during the real estate boom, are now under pressure to cut costs because of lower rents and stringent financing terms. But the report also says that leading developers and contractors are attached to union construction work, in part because “the best union labor continues to surpass nonunion in skills and productivity,” and because the jobs provide “a key channel of upward mobility for millions of Americans.”

The report describes as archaic various provisions that unions have succeeded in keeping around, in contracts that were also signed by employers. These include the required presence of master mechanics and oilers for heavy equipment like cranes, which have become technologically advanced enough that the mechanics and oilers have very little work to do; and rules that say steamfitters, electricians and plumbers must always be around to monitor heat, electricity and water service, which the report likened to an apartment building having a full-time plumber rather than simply calling one when a leak occurs.

The report also called for eight-hour shifts to officially begin when a worker reaches his station, not when he arrives at the ground level, an issue in tall construction sites where many men are using a few hoists to get to the floors where they are working.

Essentially, the RPA wants to see the difference between union and non-union expenditures drop to 10 percent from the current levels, which the organization says are closer to 20-30 percent.

The report, of course, is not without controversy. Union leaders say that the two primary authors, Julia Vitullo-Martin and Hope Cohen, are former Manhattan Institute conservatives who would prefer to see unions dismantled. Citing “Wisconsin” and “the Koch Brothers,” the Building and Construction Trades Council spoke out against the report.

Yet, despite these charges, the basic contours of the RPA study ring true. We’ve long heard about archaic work rules that limit productivity and flexibility and drive up costs. In an era of fiscal instability and across-the-board belt tightening, it’s not unreasonable to ask for rules that better reflect economic reality, and as the MTA readies to negotiate with its workers over very similar concerns, this RPA report will likely serve as a template for demands.

These battles — with the construction industry, with the TWU — will only get uglier as the year progresses. Few politicians have waded into the trenches yet, but someone might need to step in to negotiate a settlement that helps ensure both parties are protected. The near-term future of our transit agency may depend upon it.