Transit Labor

In my overview of Jay Walder’s trip to Albany, I mentioned briefly the MTA CEO and Chair’s statement on the MTA’s $100 million gap. Because the state reappropriated dedicated transit revenue, the authority is going to have to scramble to save money, and for now, fares and service levels will remain constant.

“We will not look to service cuts and we will not look to fare increases. We will look, as we have been doing, for ways that we can continue to reduce our cost structure,” Walder said. “Well we’ve said and I’ll continue to say is that we’re working on a plan right now to be able to deal with that.”

As the Daily News wrote, TWU head John Samuelsen took that as a shot across the union’s bow. Samuelsen called Walder’s comments “blackmail” and claimed that by cutting personnel, service would suffer. “The only place that they can get that money from is the maintenance side of the house,” he said. “The fleet is already in pretty bad shape.”

Two points in reply: First, the fleet itself isn’t in that bad a shape. With the new rolling stock, mean distances between failures have dropped precipitously, and the MTA is still spending on car maintenance. The rest of the infrastructure, though, is suffering. Station cleanliness is nearly non-existent, and while the component-based repair program has started, it’s slow going. Without an infusion of capital cash or the manpower to fulfill demand, the system will degrade.

The second point is one Isaac left in this comment yesterday. Noting how the TWU, Transportation Alternatives and the Straphangers are all a part of the Rider Rebellion, he spoke of the tension amongst the three groups. The latter two support riders while the TWU is — and should be — protecting the workers. MTA innovation often leads to fewer expenditures on personel, and the TWU has rightly protested there.

Here, if the trade-off is between jobs and service or fare levels, the MTA should do what it can to protect the transportation services the riders need. If that means layoffs until the economy recovers, that is a trade-off we must be willing to take as long as service levels do not suffer. The rider and the need to travel should remain of paramount importance right now.

How the MTA spends its billions. (via)

It’s never much fun to begin a new year on an ominous note, but unfortunately, turning the calendar page to January did not fix New York State’s or the MTA’s fiscal problems. With a new governor — one who is, for now, scandal-free — ready to take on Albany with some strong rhetoric, labor costs are in the crosshairs, and unavoidably, Andrew Cuomo’s stance toward the state’s powerful public unions will ensnare the MTA too.

As The Times reports today, in his first State of the State address, Gov. Cuomo will uphold one of his major campaign promises as he will attempt to freeze state wages for at least a year. Considering the state’s $9 billion deficit, a wage freeze would be more symbolic than anything else, but as one anonymous Cuomo official said, the new governor, a labor-endorsed one at that, has to start his tenure off on the right foot.

“The governor said during his campaign that the difficult financial times call for shared sacrifice,” the official said to The Times. “A salary freeze is obviously a difficult thing for many government workers, but it’s necessary if the state is going to live within its means.”

Nicholas Confessore of The Times offers up a bit more:

[B]ecause such a step would not require legislative approval, Mr. Cuomo could achieve it while bypassing the Assembly speaker, Sheldon Silver, and the Democratic-controlled State Assembly, labor’s most powerful allies in Albany.

Of course, a freeze — which Mr. Cuomo promised he would seek during his campaign — would be subject to negotiation with the unions. But labor contracts for the vast majority of the state’s 190,000 employees expire on March 31, giving Mr. Cuomo an opening to seek changes at a time of public unease toward government workers’ benefits.

Salaries, health care and pension benefits for state workers represent one of the largest and fastest-growing areas of spending, accounting for about one-fifth of all state dollars.

Budget advocates have been quick to embrace Cuomo’s pledge. Elizabeth Lynam, a vice president at the Citizens Budget Commission, is looking forward to the brewing labor fight. “It’s a shot across the bow at organized labor, which has to date been uncompromising,” she said. “Hopefully it will lead to broad-based changes in the way state employees are compensated.”

Now, enter the MTA. At the end of 2010 and for the third year in a row, the MTA had to raise fares, and in 2011, for the third year in a row, many of its unionized workers — those belonging to the Transport Workers Union — will enjoy a raise for the third year in a row. MTA CEO and Chairman Jay Walder has already vowed to work toward a net-zero increase in labor spending, and if the workers are earning more, that simply means there will be fewer of them on the MTA’s payrolls.

Meanwhile, later this year, the MTA and the TWU will head to the bargaining table to hammer out another labor pact, and you can bet that Cuomo and his team will watch these negotiations far more carefully than Gov. Paterson did in 2009. Under the microscope will be the MTA’s pension and benefits obligations. In 2010, 19 percent of MTA expenditures went to fund pensions (nine percent) and health & welfare benefits (10 percent). Total expenditures in those categories topped $2.1 billion, and by 2014, that number is expected to raise to at least $2.7 billion. It’s certainly a plus today for the MTA’s bottom line that the TWU wasn’t successful in its 2005 effort to lower its retirement age from 55 to 50.

Essentially, we’re sitting on the edge of a dangerous game. If Cuomo is successful in instituting this wage freeze, the TWU will be firmly in his crosshairs, and he will apply tremendous pressure on the MTA to give up no ground. Another strike would likely result in the end of the TWU as a viable union but giving up ground to the authority will lead current president John Samuelsen exposed to an already-disgruntled rank-and-file.

For better or worse, labor pressures will be one of the top transit storylines for 2011. If workers’ salaries and benefits keep going up, riders will be outraged. If the unions are battered or broken by Albany, the workers will be very unhappy. No matter what, this story will be have a bumpy ride and an ending that can’t be happy for everyone.

In 2005, straphangers across the city had to contend with no subway service for three days. (Photo by flickr user JUgoretz)

December 2005 was supposed to be a banner month for the MTA. In an effort to live down the now-discredited claim about two sets of books that convicted felon and then-Comptroller Alan Hevesi had espoused two years earlier, the authority handed out discount fares to regular straphangers and tourists alike. The holiday fare program, deemed neither a success nor a failure, is a relic of a financially secure past, but the end of December in 2005 saw the city’s first transit strike in 25 years. We’re still living with the aftermath of that strike today.

December 22 — today — marks the five-year anniversary of the end of that transit strike, and then, as now, few people could tell you which side won. In 2005, the TWU claimed to be victorious. “In the face of an unprecedented media assault, the average New Yorker supported the TWU and blamed the MTA for the strike,” the union said in a statement. But leaders faced criminal sanctions, and the TWU lost its mandatory dues provisions. The union was the driving force of the strike and left the MTA with no alternatives. Today, current President John Samuelsen is trying to rebuild a union still awash in bitterness and in-fighting caused by fallout from the strike.

With history as our guide, we can see today how the strike and its impact is still felt in the way New Yorkers view the MTA, and perhaps the union was right. While few New Yorkers would say they supported the TWU’s efforts to lower the retirement age to 50 and the qualifying years to 20, most are still content to blame the MTA for the strike. At the time, riders expressed their disgust with the situation through obscene messages graffitied onto MTA signs, and when the strike ended, everyone just wanted to ride the rails again.

Currently, the MTA suffers from a credibility gap. Straphangers immediately assume that whatever the MTA is doing costs too much and takes too much time. The authority is beset by bureaucratic waste, and its attempt to make every dollar count have not led to an increasingly positive public perception. The MTA is far from the worst authority in New York state, and yet it has a reputation that proceeds it.

That reputation stems directly from the transit strike. For three days at the height of the holidays, the MTA and the TWU engaged in what can artfully be described as a pissing contest. The TWU knew its strike would not pass legal muster, and the MTA knew the public would not respond positively to three days without mass transit. Yet, the authority knew that it had to dig in on certain issues to keep costs down, and the TWU tried to make a stand. The public didn’t care who was right, who was right or what would benefit them in the end. They just wanted their subways back.

Today, the TWU is still bitter over the outcome of the strike, and current union leaders think their relationship with the MTA is at an all-time low. “If it was starting to change,” Samuelsen said of his union’s cooperation with the MTA, “Jay Walder’s coming to town has only intensified the average worker’s disdain for the MTA.” Only the TWU head could proclaim to hate his bosses and get away with it without explaining the why of it all.

The next few months could be telling ones for the MTA and the TWU. The union’s contract is up again, and after three years of doling out arbitration-awarded raises while its balance sheet went south, the MTA is prepared to toe a hard line. The authority doesn’t want labor costs to rise over the next two years, and in fact, the authority can’t afford to have labor costs rise over the next two years. Its leaders are prepared to toe a hard line over the next year.

And so five years after the transit strike ended, the city hasn’t progressed much. The MTA and TWU are still at odds, and labor relations might be even worse than they were in 2005. The riding public doesn’t care to apportion blame. They’re not sympathetic to the TWU’s cause, and they’re still skeptical of anything that comes out of MTA HQ. We won’t have another transit strike in the future, but these are rough times indeed for the MTA, for the TWU and for the seven million New Yorkers who rely upon New York City Transit to get around town everyday.

Norman Seabrook, head of the New York City Correction Officers’ Benevolent Association and one of the MTA Board’s most vocal pro-labor advocates, has not bee reappointed to his position. Instead, Gov. David Paterson, in the waning days of his time in Albany, Charles G. Moerdler, a partner the lawfirm of Stroock & Stroock & Lavan with no transportation background and extensive real estate experience to the board. It is a move that seemingly speaks volumes of the short-term future of the MTA’s relationship with labor.

To get a sense of this story, let’s start with some testimony Jay Walder to the New York State Assembly. The MTA CEO and Chair came to talk about his relationship with labor unions, and it seems as though things might grow contentious soon. As Transportation Nation’s Jim O’Grady reported, “Walder says unions have to agree to freeze their wages–or straphangers will have to pay more.”

To me, a few weeks ago, Walder confirmed that the MTA will try to keep labor spending steady. On the other hand, the unions will be pushing for higher wages or higher benefits. To maintain a net-zero in the labor spending column, the authority will have to institute more layoffs or dig in against its workers. In any event, it will be a tough negotiation.

Enter Norman Seabrook. His appointment to the board expired this past summer, and for the last few months, he was a holdover board member. WPIX’s Greg Mocker — yes, that Greg Mocker — caught up with Seabrook and Gov. David Paterson today. The video is available here, and in it, Seabrook talks about his departure.

The outgoing MTA Board member seems to believe his own politics played a roll in this. “It could have been for my endorsements of another candidate. It could have been because I wasn’t a yes man,” he said, later critiquing the board. “They will continue to vote yes on fare increases,” he said. “They will continue to yes on service reductions. They will continue to vote yes on layoffs. They will continue to vote yes on anything that is put in front of them.”

Gov. Paterson, who said he won’t “get into conversations about particular appointees,” talked about what he wants in an MTA board member. “We’re looking for people who will make the tough choices,” he said, “and even though they may not be popular, they will hopefully be the ones that will spare the public authority as we are trying to spare the state from going into insolvency.”

So just who is Charles Moerdler? The veteran lawyer has extensive public service on his resume. He currently serves on both the New York City Housing Development Corporation and the Dormitory Authority of the State of New York. Throughout his professional career, he has “represented many of New York’s leading real estate developers and owners, as well as real estate trade organizations.” He has also served as the lead negotiator for municipal unions, including the United Federation of Teachers and the Patrolmen’s Benevolent Association. In other words, he’s a labor guy replacing a labor guy but with a different focus.

Whereas Seabrook is the president of a union, Moerdler, as Pete Donohue points out in the Daily News, is the guy who can lean on his extensive contract negotiating experience as the TWU’s pact comes due. With experience serving on state authorities, he can recognize what the MTA needs to do to survive and knows what the unions will be after. These upcoming negotiations could get quite interesting indeed.

When postcards such as this one hit the streets, it's little surprise Jay Walder and labor aren't getting along.

Back in mid-August at the heigh of vacation season, the TWU issued a postcard condemning Jay Walder for taking a vacation. The MTA CEO and Chair had dared to decamp to his house in France, purchased with money earned while he worked for Transport for London and the consulting firm McKinsey. While TWU workers were being laid off, Walder was taking his time off, and this was cause for consternation. TWU president John Samuelsen even said that Walder was “an elitist rich guy totally out of touch with his workers and New York City transit riders.”

Now, as Jay Walder marks his first year in office and reflects back on the tough choices he’s had to make, labor is at the forefront of his regrets. He may have trimmed nearly $730 million from the authority’s annual rolls, but his public relations with the MTA’s labor unions, he told a York College crowd, have been far from perfect. “The biggest disappointment that I’ve had in one year at the MTA,” Walder said, “has been the inability to be able to partner with our labor unions.”

NY1’s John Mancini had more:

Walder told a York College audience that talks to negotiate new work rules and reduced benefits for new employees broke down. That’s no surprise. The folks he wants to partner with include John Samuelsen, head of the the city’s largest transit union, who has mocked him repeatedly as an out-of-touch rich guy.

“Jay Walder’s idea of a partnership is a one-way street in his direction,” Samuelsen said in a recent statement. “For Jay, it’s always about cutting transit workers’ pay and benefits, and destroying conditions of labor negotiated over 75 years.”

With nearly a thousand layoffs, it’s been a rough year for labor relations at the MTA. And in recent days, management has stepped up its call for union concessions. When the MTA board voted this week to hike fares, they heard a new warning. “We are faced with union contracts now that are truly onerous,” said MTA Vice Chairman Andrew Saul. “We have antiquated work rules, which makes it hard for us to modernize the system. We have pension costs and benefits that are just really going out of control here.”

It has indeed been a rough year for Walder and the unions, but the TWU, the city’s largest union, isn’t having an easy go of it either. Earlier this summer, in a contentious vote, the TWU chose to give a full benefits package to laid-off workers. Current union members may donate $5 a week to fund the health insurance coverage, and as the measure passed by a margin of just 64 votes, some current members resent the payouts.

“There are a lot of people who feel that it’s unjustified,” Ron Shpiller, a shop steward, said in August. “A lot of people feel it was not presented properly…We can’t afford to pay for our own children, but we’re going to pay for people we don’t really know.”

At the time, John Samuelsen dismissed these dissenters as a threat to union solidarity, but since August, the dissent has grown louder. As Ari Paul of The Chief-Ledger reported last week, the union’s Secretary-Treasurer and Samuelsen are now at odds. The dispute is a long and winding one involving two TWU staffers, but the animosity stems from the health care vote.

Meanwhile, to pile on even more, David Brooks in The Times blames escalating pension and benefits costs for the failure of the ARC Tunnel. “States across the nation will be paralyzed for the rest of our lives because they face unfunded pension obligations that, if counted accurately, amount to $2 trillion — or $87,000 per plan participan,” he says. “All in all, governments can’t promote future prosperity because they are strangling on their own self-indulgence.”

Brooks, never one to miss the opportunity, fingers Democrats as the culprits. The party of the left is too cozy with labor, he says, but in New York City, party affiliation matters little when it comes to union support. Everyone is both guilty and innocent.

What the future holds for these rocky relationships is anyone’s guess. Historically, the labor movement has been a boon for the American workforce as we now enjoy weekends, paid time off, sick leave, maternity leave and a variety of other benefits. But lately, pension and benefit costs have left everyone scrambling, and Walder has been slammed by the pushback from his own offensive. The TWU’s contract is up in 2012, one year before the MTA’s next scheduled fare hike. I can only imagine the state of this relationship then.