TWU

As the MTA and TWU enter month six since their previous contract expired, negotiations have been awfully silent for a while. MTA Chairman Joe Lhota brough that out in the open today though with a forcefully worded piece in the pages of The Post today in which he calls upon the TWU to make some sacrifices. After years of streamlining operations, he writes, it’s time for the TWU to give back as well.

Lhota:

It’s not yet common knowledge, but the agency is in an era of cost-containment and -control unlike anything in its history — as even a quick glance at the MTA’s financial statement reveals. Annual expense reductions in the operating budget — that is, savings that recur year after year — totaled about $700 million in 2011 and will grow to $890 million in 2015. That’s 11 percent of our discretionary operating budget.

How did we do it? We eliminated more than 3,500 positions, including 20 percent of our headquarters staff. We renegotiated vendor contracts. We froze wages for all non-union employees. We rebid employee health care. We reduced unnecessary overtime and consolidated redundant functions. The list goes on and on . . . and this work is far from over. In 2012 and beyond, we’ll continue to slash costs while looking for creative ways to bring in revenue…

All the while — during a time of unprecedented cost-cutting at the MTA, and as our nondiscretionary costs spiral out of control — binding arbitration has required that members of our largest labor union get pay hikes of 4 percent in 2009, 4 percent in 2010 and 3 percent in 2011. That’s a whopping 11 percent over the last three years, at a time when New York City’s cost-of-living index rose 4.6 percent.

Managers and non-union workers haven’t been so lucky. They got 0 percent in 2009, 0 percent in 2010 and 0 percent in 2011. Today, these public servants have gone four years without so much as a cost-of-living increase. That’s why the MTA is asking its unionized workforce, during its current contract talks, to forego raises for the next three years.

Labor, writes Lhota, should be “a part of the solution.”

On Twitter, TWU Local 100 called Lhota’s piece “outrageous” but didn’t offer up much more. I’m not surprised they don’t see eye-to-eye with the Chairman, but he makes a very compelling case indeed. At a time when non-unionized workers haven’t seen a raise in nearly half a decade and the MTA is clearly at risk of a brain drain of talented workers, everyone has to pay somehow.

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.

During the 2005 transit strike, the MTA had to chain off the entire subway system. (Photo by flickr user h-bomb)

It’s now been 15 days the TWU’s current contract with the MTA expired. In the intervening two weeks, the two sides have gone through the public spectacle of negotiations with one side — the TWU — walking away for a few days in dramatic fashion and the other leaking some demands. As John Samuelsen and Joe Lhota work to find a resolution, the union president says he won’t rule out a strike, but a peaceful resolution is the more likely path toward a new labor pact.

For New Yorkers, even the talk of a transit strike is enough to send us back to those cold three days in 2005 when the subways did not run. Just over six years ago, the TWU, defying the law, did indeed strike, and New Yorkers were left without subway service as Christmas neared. As I was for New York’s defining moments of the first decade of the 21st Century, I missed the transit strike. I was in D.C. that week, not due back in New York for a few more days, and by the time I returned to the city, the strike was over. Today, I want to revisis that strike.

Those days in December were heady times for the MTA and the TWU. Concerned with out-year budget projections of steep deficits, the MTA wanted to cut labor costs. In order to restrain pension spending, the authority proposed pension cuts and called upon the TWU to allow conductors to walk through train cars. It was viewed by many as another step along the path toward conductorless cars, and the union balked.

The city began to prepare for a costly strike as negotiations dragged on, and even though the TWU rank and file authorized a strike, analysts were skeptical. Such a strike would, many said, be in violation of the Taylor Law, and the leadership would be risking a lot by leading a strike. The city, meanwhile, was preparing to throw the book at anyone who struck illegally.

As business owners tried to arrange alternate transportation for their workers, the MTA continued to enjoy a December of cut rates. That winter, you may recall, the authority used an end-of-year surplus to offer $1 rides for all pay-per-ride straphangers. It all came to head on December 20, though, as union leadership decided to strike after failing to reach an agreement with the MTA.

With temperatures in the upper 20s, straphangers had to battle the elements and massive crowds as cab share plans were initiated and car trips into Manhattan were carefully limited. A state judge levied massive fines against the TWU as an organization and against its leadership personally for the strike. The Times called it an “unnecessary strike.”

On Day Two of the strike, New Yorkers grew weary. Traffic marred the streets while many simply worked from home. It was a cold winter day for tourists, shoppers, business people and families who could not escape the confines of their neighborhood, and Judge Theodore T. Jones threatened then-TWU President Roger Toussaint with jail time over the strike. On the third day, after 60 excruciating hours, the strike ended. State mediators had convinced the two sides to work toward a deal, and the MTA seemed willing to grant generous raises while dropping demands to raise the retirement age from 55 to 62. The TWU seemed willing to take an increase in pension contributions as well.

Across the city, businesses bemoaned the losses with lost revenue estimated at half a billion dollars. Roger Toussaint faced a short jail sentence, and the union lost its ability for automatic dues check-offs. Eventually, leadership agreed not to authority illegal strikes in exchange for the restoration of that right, but it took the TWU a few years to recover from that strike.

Today, as the MTA is demanding a net-zero labor increase, and the union wants some small raise in its contract, the two sides are at different places than they were six years ago. The union seemingly recognizes the MTA’s financial situation, and the MTA will hold a firm line while keeping dialogue moving forward. The last strike was a reminder of how reliant the city is on its subway system, and while, with no deal in place, the vague threat hovers above the negotiations, I doubt we’ll see a repeat of 2005 any time soon.