Second Ave. Sagas

Category: UTU

  • The politics of a potential LIRR strike delay

    Here is an interesting bit from Newsday: While the UTU has not officially requested a 60-day delay for its looming summer strike, union officials have floated the idea of pushing the strike back from the summer to mid-September. The strike would begin on September 17 instead of July 19, seemingly sparing Long Island’s summer tourism season.

    “Our members care about Long Island and its economy,” Anthony Simon, general chairman of the Sheet Metal, Air, Rail and Transportation Union/United Transportation Union, said to the Long Island newspaper. “All we would need is the MTA to mutually agree on the extension.”

    The MTA seems willing to entertain the request, thus giving both sides more time to work out a deal. Overall, though, this is an interesting political move by the UTU. It shows their willingness to recognize the public need, and it pushes the strike date closer and closer to Election Day. I have a hard time believing Gov. Andrew Cuomo, looking for a resounding victory, would allow a strike seven weeks before New York voters head to the polls, and the UTU knows this as well. As always, stay tuned.

  • Fare hikes, service increases and the LIRR situation

    When the MTA adopted a proposal, nearly five years ago, to shore up their finances by, in part, raising fares every two years, the plan of attack involved biennial increases of around 7-8 percent. The rate of these fare hikes outpaced inflation but was designed to overcompensate for years of fare policies that didn’t align with inflation. After a fare hike last year, though, Tom Prendergast announced that the 2015 hike would be only four percent, and I wondered if the MTA had jumped the gun.

    At the time, the MTA had still been pressing for a net-zero labor increase, and it wasn’t clear how strong the MTA’s finances would be, even in the face of an improving economy. Now, we’ve been led to believe that the MTA can afford something more than net zero without rigid work rule reform, at least for the TWU, and the Long Island labor dispute has become the center piece of the battle over MTA dollars. Last week, it seemed as though a summer strike would be more likely than not, and the question on everyone’s mind concerns the money. While the Presidential Emergency Board again failed to account for the MTA’s razor-thin margins and lack of financial flexibility, the PEB still awarded the LIRR union 18 percent raises. Where would this money come from?

    In a piece last week in the Daily News, Pete Donohue attempted to answer. For starters, Prendergast said at least week’s MTA board meetings, the fare hikes won’t be increased, but what about everything else? Donohue summarized:

    Prendergast said that if an agreement calling for 17% raises for LIRR workers were reached, there would be an impact on MTA budget models, but members of the authority’s board still want to limit next year’s fare hike to 4%, as previously planned. “Fares we’re pretty firm on,” Prendergast said after an MTA board meeting on Wednesday.

    MTA officials will meet with LIRR union leaders and attempt to negotiate a less expensive contract, Prendergast said. LIRR workers have been without a contract for more than three years. Union leaders have said they will call a strike if they don’t have a deal by the July deadline. Federal law permits strikes by commuter railroad workers after a multi-stage process of independent mediation and cooling-off periods.

    Prendergast said “we’ll have to see” if the MTA would be able to afford service improvements if its budget plans had to be adjusted to accommodate LIRR raises in line with the mediation panel’s non-binding recommendation. Top transit officials last week had begun discussing implementing a package of service increases and improvements that could total $20 million, the Daily News reported.

    If the MTA has to dole out more dollars than it anticipated to the LIRR union, the riders wouldn’t see planned service increases, but more alarming are the unsaid sources of revenue. The MTA would possibly have to figure out a way to use pay-as-you-go capital funding to cover labor wages for a union in bad need of reform. Such a move would leave fewer dollars for emergency repairs, component upgrades and maintenance and upkeep efforts. Clearly, that’s not a positive.

    I don’t know what will happen. No one wants a strike, but as I said last week, there are some long-term gains to be had from a strike. Still, it’s important to remember that the MTA’s finances are better but still on shaky grounds, and the most vulnerable monies are the ones the agency needs the most. Instead, those dollars could go to the UTU as the city’s transit system faces a potential capital crisis.

  • July strike looms as PEB again sides with LIRR union

    For the second time since last 2013, a Presidential Emergency Board convened to help mediate the long-simmering labor dispute between the LIRR and UTU Local 645 has sided with the union. In a non-binding decision, the PEB urged the MTA to adopt the UTU call for wage increases of 17 percent over five years, no change in pension obligations and only the promise to negotiate over work rules with no real reforms in sight. As the MTA is unlikely to accept this decision, such a ruling paves the way for the UTU to strike in 60 days.

    During the recent negotiations, the MTA had proposed a deal similar in form to that accepted this week by the Transport Workers Union Local 100. The offer included modest increases, both retroactive and in the future, as well as substantial pension reform and wage structures. The PEB did not view this as a comparable or fair offer and has rejected it. Unlike last time, though, when the first PEB stated that “It simply cannot be concluded that the MTA’s current financial position is one in which it is unable to pay for wage adjustments that are otherwise warranted,” the new decision (available here and below) stays away from a discussion of the MTA’s finances.

    Still, it is highly unlikely that the MTA will accept the PEB-backed proposal, and the agency said as much tonight while hoping to stop a strike before it begins:

    The MTA is disappointed that the Presidential Emergency Board did not accept as the most reasonable offer our proposal for 11 percent raises over six years for the Long Island Rail Road unions, consistent with the agreement overwhelmingly ratified by the Transport Workers Union. Our proposal is a fair and reasonable way to recognize our employees’ hard work and provide them with competitive wages, retroactive pay, quality healthcare and secure pensions. If adopted, the Board recommendation would significantly reduce funds available for the MTA Capital Plan. We still believe a fair, reasonable and affordable agreement can be negotiated at the bargaining table, as it was with the TWU.

    In all likelihood, though, the UTU will strike, and the MTA is probably OK with that. Had the PEB sided with the LIRR, the optics of a strike would have been more favorable to the agency. The UTU would have been the side to reject the contract offer, but instead, the MTA will appear as though it is goading on a strike when it eventually rejects this deal. But it’s hard to say that a strike shouldn’t happen; as I discussed last night, a strike could be beneficial in the long run even as it exacts short-term pain.

    So now we wait. The UTU and MTA have 60 days to attempt to negotiate something palatable to either side, and the PEB decision is nothing more than advisory. If I were a betting man, though, I’d put money a strike, and that may not be the worst outcome around.

    After the jump, read the PEB decision. (more…)

  • TWU ratifies contract as LIRR’s UTU strike looms

    As the MTA Board gears up to validate the new TWU contract on Wednesday, the union met for a vote yesterday, and the deal passed with an overwhelming majority. Over 80 percent of the rank-and-file voted in favor of the agreement — which grants modest retroactive and future raises while requiring higher healthcare contributions. It doesn’t have the work rule reform many had hoped, but it ushers in some peace after years of rancorous negotiations between the TWU and various MTA heads.

    Now, attention will turn to the east as the Long Island Rail Road, whose workers can legally strike, gears up for some labor unrest. The UTU has already authorized a strike for late July, and unless the MTA and its LIRR union can come to an agreement soon, the eastern suburbs will be look at a rough summer. The TWU though may be the savior for Long Island riders hoping against a strike. The subway union and the new contract may also be just the thing the MTA needs to put some added pressure on the UTU.

    In a paywalled article for Newsday, Alfonso Castillo follows that thread. It could be worse; it could be better. Castillo writes:

    An LIRR union source, who spoke on condition of anonymity, said the TWU’s approval of the contract increases the likelihood of a railroad strike, as LIRR unions have lost some leverage at the bargaining table. “The MTA is going to dig their heels in now,” said the source, adding that the subway workers’ ratification gave the MTA’s case “validity.”

    Without an agreement in place, 6,000 LIRR workers could legally strike as early as July 20, stranding some 300,000 daily riders who use the nation’s largest commuter railroad. The LIRR unions have said the MTA’s proposed contract is worth far less to LIRR workers than to subway workers, who will see several new perks that would not benefit railroad workers, including free rides on the LIRR. Railroad workers would also see a far bigger increase in employee health benefit contributions than transit workers will under the contract.

    The unions have demanded that the MTA accept the more lucrative terms of a White House-appointed mediation board, which in December called for 17 percent raises for workers, and smaller health care cost contributions. A second Presidential Emergency Board was set to issue its recommendation for a fair LIRR contract Tuesday, just 60 days before a strike could be called. Losing the presidential board’s support a day after subway workers ratified their contract would be a “worst-case scenario,” the union source said. “That would definitely lead to a collision course.”

    TWU officials, rightly so, declined to take a stance on the United Transportation Union situation. “I’m the president of the TWU Local 100. I’m not the president of the Long Island Rail Road coalition,” John Samuelson said to Newsday. “We have long-standing benefit issues that the Long Island Rail Road folks didn’t have.”

    The MTA, meanwhile, claims they are committed to resolving the outstanding dispute with the UTU at the bargaining table and preferably before a strike. The clock is ticking though, and in two months, the LIRR would effectively shut down for substitute bus service until the two sides agree. As workforce reform goes, it’s more important for the MTA to extract concessions from the LIRR union at this stage in the game, and a strike almost feels inevitable. We’ll see where we are in 60 days.

  • With new PEB request, LIRR strike pushed to July

    In an effort to reach an agreement with the United Transportation Union Local 645 and avoid a strike for as long as possible, the Long Island Rail Road has issued a request for a second Presidential Emergency Board. The new PEB request and subsequent arbitration proceedings will delay any potential work action the UTU make consider until July 19 at the earliest.

    The MTA has tacitly recognized of a favorable outcome in this fight. Currently, 59 of the agency’s 60 unions are working without a contract, and the UTU could set the stage for subsequent negotiations. If the MTA cannot achieve a net-zero labor increase, either through work rule reform, layoffs or a combination of both, the agency’s precarious financial picture will be thrown into doubt. That seems to be the X Factor New York politicians are so willing to ignore, but it was the MTA’s focus in their statement announcing the request for a second PEB.

    Said the MTA:

    The MTA wants to resolve these contract issues at the bargaining table, where they belong. But the recommendations of the first Presidential Emergency Board ignored the enormous burden that a 17% wage increase over six years – without a single change in work rules or other cost offset – would place on the MTA’s budget. If those terms were applied across the entire MTA workforce, they would be equivalent to raising fares 12% – or cutting $6 billion from the capital budget for keeping our system safe and reliable.

    In response to this procedural move, the TWU — a very interested bystander — issued a stridently worded statement speaking out against the measure. One union official noted that “the MTA’s repeated insistence that it has no ability to pay the raises recommended by the panel is ‘a phony smokescreen rejected by four consecutive panels of arbitrators’ who have handled recent MTA labor disputes.” The TWU is the MTA’s largest union, and their top brass have vowed to support the UTU were it to engage in a strike.

    Meanwhile, as this labor fight takes shape, Dana Rubinstein explored how Gov. Andrew Cuomo is using the MTA as a piggybank. Between the $40 million diversion for debt purposes and the $7 million Verrazano Bridge toll giveaway, Cuomo is not standing behind the MTA as a variety of interests jockey for money. Brooklyn now wants its own toll relief, and the union issues will loom throughout the spring and summer.

    When the dust settles, the riders will wind up paying more and getting nothing in return. After all, it was Tom Roth, the UTU’s expert witness, who said at the last PEB that “he passenger has had a good run here at the MTA, and it is about time the fares went up.”

  • Some thoughts on the LIRR’s labor situation

    While news from the transit world has trickled to a crawl during the cold, snowy days of winter, all eyes have shifted to the east where a labor dispute is playing out that could have ramifications that echo from Montauk to Manhattan to Manitou. With the Long Island Rail Road’s largest union creeping toward a strike and MTA CEO Tom Prendergast’s warning of a huge fare hike if the MTA can’t fulfill its net-zero labor dreams, the next few months could be more important for the MTA’s future than most straphangers realize.

    When we last saw this tale, Prendergast had just issued his warning. If the MTA has to grant wage increases to all of its unions without any hope of work rule reform, the fares will go up. It’s the only way the MTA can cover these increased costs, the MTA Chairman has stressed. It’s not a new line from the man who sits in that role, but it’s one inching ever closer to reality. Meanwhile, the MTA and the UTU are living in an era in which the first Presidential Emergency Board determined that the MTA could pay for raises with endless Pay-As-You-Go payments and the MTA’s never-ending ability to borrow more money. Welcome to fantasyland.

    So this week, the politicking and maneuvering picked up a bit with a bunch of members of Congress urging the MTA to avoid a strike. Their argument relied on the same one put forward by the PEB without a nod to the MTA’s financial reality. Here’s the Daily News’ take:

    Twelve members of New York’s Congressional delegation urged the MTA to soften its hard-line wage freeze stance as a March 21 strike date loomed for Long Island Rail Road workers. In a two-page letter Wednesday to Metropolitan Transportation Authority chairman Tom Prendergast, the lawmakers called for MTA officials to rethink their position despite what they called the agency’s “past financial stresses.” “We urge the MTA to reconsider its insistence on a wage freeze or concessions to fully pay for wage increases,” read the letter from the office of Rep. Steve Israel (D-L.I.)…

    In the letter, Israel and his fellow lawmakers argued for the MTA to return to the bargaining table by pointing out that the presidential panel found the authority could afford to pay for a rise for LIRR workers. The letter, which was signed by all four Long Island Congress members and most of those from New York City, quoted the panel’s argument that “it simply cannot be concluded that the MTA’s current financial position is one in which it is unable to pay for wage adjustments.”

    But in speaking at an Albany hearing last month, Prendergast raised the possibility of a 12% fare hike for 2015 if all contract-less MTA workers received raises like those recommended for LIRR employees. Prendergast predicted “dire consequences” — including the possibility of a $2.75 subway ride, up 25 cents, and a $125 unlimited monthly MetroCard, up from the current $112.

    To avoid a strike, the MTA will request a second PEB meditation, and the UTU will not be able to walk off the job until late June. There’s no indication that the MTA will accept anything other than a finding favorable to the agency, and it’s possible that they’ll push the issue until the end. The public wouldn’t be happy with a strike, but the LIRR is one railroad that should be pushing for labor reforms. Meanwhile, I’d dispute the stance that the MTA has a “hard-line wage freeze stance.” They’ll willing to grant a wage increase as long as work-rule reform comes with it.

    Still, the larger issue here is the fact that of the MTA’s 60 unions, 59 of them are working without a contract. The TWU is agitating for raises too, and if the UTU earns its contract, the other labor unions will push for a similar resolution. At that point, the increased costs of labor — which do not factor into the MTA’s rather optimistic budgets — will fall on the shoulders of the riders. Should the MTA grant wages if everyone else has to pay more? Should work rule reform follow a bump in salary? The answers to these questions will set the tone for the MTA’s economic structure for the foreseeable future.

  • On Long Island, slowly inching toward a strike

    It’s been a few weeks since Presidential Emergency Board recommended a series of wage increases for the Long Island Rail Road’s United Transportation Union workers, and the MTA has come back with a resounding response to the non-binding suggestions. Setting the stage for a summer of labor unrest, the MTA will not grant the raises to UTU Local 645.

    For the MTA, this is a risky, if necessary, move to keep the budget and the dream of net-zeroes in tact. It should lead to a permissible strike, and the MTA is gambling that Long Islanders will allow their support of getting to work quickly and easily trump their support of labor unions. It could also foreshadow how the MTA plans to address the TWU’s ongoing contractual situation.

    Pete Donohue offers up this take in today’s Daily News:

    MTA Labor Relations Director Anita Miller notified the National Mediation Board that the authority would not enact a contract settlement for the commuter railroad that was crafted by an independent panel. The move prompted an angry response from a top union leader representing LIRR workers, who have labored without a contract since 2010. “If a strike occurs, it’s the sole responsibility of the MTA for being unwilling to accept the results,” said Anthony Simon, general chairman of the United Transportation Union. “It’s not a matter of them being unable to pay. It’s a matter of them not wanting to pay.”

    Simon’s union is one of eight representing LIRR workers that are involved in the labor showdown with MTA brass. The MTA, meanwhile, all but accused the unions of being indifferent to the possibility that the raises sought would necessarily result in fares being increased to levels higher than that which the authority has already planned.

    Federal law says commuter railroad workers can legally walk off the job if a contract deal is not reached after a lengthy process involving negotiations, mediation and mandatory “cooling off” periods. That process is expected to be played out by this summer.

    As Donohue details, the MTA’s beef with the PEB decision is as much over what it doesn’t contain as it is over what it does contain. While it required higher union contributions to benefits, it did not include work rule reform which the MTA has repeatedly said is key to its net-zero plans and is also key to future improvements in its operating model.

    Meanwhile, in rejecting the raises, the MTA also played to the fears of its riders. Miller told the feds that union officials have no issues with the LIRR passengers paying significantly more for service. One union rep reportedly told the PEB, “The passengers have had a good run at the MTA, and it is about time the fares went up.” Fares have not always tracked inflation.

    The path to a strike is a slow one with mandatory cooling periods and enforced negotiations on tap first, but the MTA seems to recognize that a strike may be the only way for it to get what it wants. You can be sure, too, that the TWU is watching as well. They don’t have the right to strike under New York State law, but they’ll push for whatever favorable outcome the UTU can draw out from the MTA. That contract is worth far more in current dollars and future savings, and right now, the UTU fight is a proxy for the larger war with riders and fares serving as the battlegrounds.

  • The trouble with net zero

    The MTA’s budget is a curious thing. It’s a multi-billion-dollar behemoth with nearly no room for maneuvering. While a recent uptick in the economy has resulted in a slight surplus and a rosier outlook, recent developments from Long Island have cast a shadow over a key fundamental assumption. That assumption is the net-zero labor increase, and that development is a substantial award from a Presidential Emergency Board to the United Transportation Union.

    The story is a familiar one: The UTU and MTA had been at odds over wage increases and a long-term contract. The MTA wanted to hold the line at a net-zero wage increase with raises in out-years and benefits contributions from retirees. The UTU didn’t want to embrace any of that. So under the Railway Labor Act, President Obama ordered a PEB to convene, and the award issue arrived last Saturday. It was bad news for the MTA though the award is non-binding.

    As the UTU outlined in a release, the PEB decision went something like this. (You can read the full here in PDF form.)

    The three board members recommended that the LIRR pay wage increase totaling 18.4 percent over six years (2.9 percent per year) and employees begin contributing to health insurance premium costs. After factoring in the recommended employee health insurance contributions, the board’s recommendations would still produce net wage increases of 2.5 percent per year…

    The board’s wage recommendations are retroactive to the first year of the contract dispute, which has been ongoing for more than three years. The board rejected MTA’s demand that workers accept three years of net zero wage increases, followed by two, two-percent increases over five years. The board also rejected MTA’s demand for major concessions in pensions, including a permanent five percent employee contribution. The PEB also rejected MTA’s demand that retirees begin paying for health insurance and that railroad retirement disability pensions be offset by LIRR’s pension payments.

    PEB recommendations include that employees begin contributing to health insurance premium costs, beginning at one percent of 40 hours straight-time pay, at the contract’s opening date of June 16, 2010, and increasing by .25 percent increments each year thereafter. MTA had proposed larger employee contributions, while the affected unions had proposed no contributions from current employees.

    Procedurally, the MTA and UTU now have 30 days — or until January 20 — to work out a deal, and then either party can request a second PEB hearing. Following that hearing, absent an agreement, the unions could legally strike. This clearly differs from the situation with the TWU, as the Taylor Law prevents such a strike, but Local 100 leaders are supporting the UTU in any action it may take.

    From a substantive point, the key line in the PEB report it this: “It simply cannot be concluded that the MTA’s current financial position is one in which it is unable to pay for wage adjustments that are otherwise warranted.” In deciding as much, the Board pointed to Pay-As-You-Go resources and the MTA’s ability to borrow more money for wage increases. This is analysis that seems to exist in a short-term vacuum with no nod to context, but it’s also an argument we’ve heard before in the labor context.

    For the MTA, this is a tough one. The Board has already announced that planned fare hikes in 2015 and 2017 will be lower than expected, but again, that decision rested on an net-zero wage increase. As the LIRR and UTU head toward a compromise, the MTA’s options will narrow, and staffing reductions may become necessary. Worker morale across the board is low, and strife between the unionized workers and management would be tremendously costly to riders.

    We’ve seen this movie end before. The MTA’s budget outlook improves; labor demands increase; riders pay more. Until there is a fundamental change in work rules, pension contributions or labor practices, it always ends the same.