Saturday, January 21, 2006

Compensation in NYC

Under normal circumstances, this news (h/t WSJ) would have generated a sternly worded post:

NEW YORK (AP) -- The president of the city's transit workers union said its leaders were ready to go back to the drawing board after 33,000 bus and subway workers narrowly rejected a tentative contract deal reached after last month's crippling strike.

Workers on Friday rejected the contract by just seven votes, with 11,234 against and 11,227 in favor. The vote was a sharp rebuke to Transport Workers Union local president Roger Toussaint, who persuaded workers to walk off the job in December but could not muster enough support for the deal.


The rejected contract would have provided raises of 3 percent in the first year, then 4 percent and 3.5 percent in the following two years. But it would have required the workers for the first time to contribute 1.5 percent of their salaries toward health care premiums.

The rebuke is hard to deliver on a day when the same paper includes this:

Alan G. Hevesi, the New York State comptroller, announced yesterday that Wall Street bonuses were estimated to hit a record $21.5 billion for 2005, surpassing the previous record of $19.5 billion, set in 2000. Those bonuses were driven by record profits at many of Wall Street's major investment banks, including Goldman Sachs, Bear Stearns and Lehman Brothers.

The Street's munificence will be felt throughout New York: Mr. Hevesi estimated that New York State would collect $1.5 billion in tax revenue from those bonuses, and New York City about $500 million.

"Wall Street continues to be critically important to the economies of both the city and the state," he said.

I would still criticize another unlawful strike, but it's hard for the city and state to plead poverty in denying the MTA union workers' request for more compensation.


Anonymous said...


Anonymous said...

Shame on you for suggesting that the Wall Street tax revenue should go to the overfed under worked transit hijackers.

Child health care, feed the homeless and more crime prevention certainly would be some of the better choices.

Should we give them more money so they can retire at age 50?

WSJ said...

I stand corrected on this. As a New Yorker who puts himself under their responsibility every day, I don't begrudge the MTA union better compensation. A wealthy, progressive city like NYC should set the highest standards of care with regard to their employees.

A strike would be unwise because it would be i) illegal. ii) the union can't afford it. iii) would hit those in the outer burroughs who could least afford it. iv) it's not going to fly with New Yorkers.

this is a particularly poor choice of words however: "Shame on you for suggesting that the Wall Street tax revenue should go to the overfed under worked transit hijackers."

Anonymous said...

The taxpaying public needs some measures to see if the union workers merit the compensation they seek. This might include some sort of improvement in productivity, throughput (more people using existing transit transportation system), and customer satisfaction (are transit customers happy?). Trends in revenue per transit employee by year would also be interesting. This ratio needs to be increasing.

In regards to workplace duties: unions need to publish stats that show how the union members have been flexible and invested in retraining.

Unions should also publish stats that show that people in the union are being trained and educated about the plethora of new saving and investment opportunities that have developed over the last 20-30 years. This would help union members be less reliant on inflexible benefit or wage hikes. Bonuses on Wall Street are highly variable and may go away or diminish greatly during leaner times. Pay for transit workers is not as flexible or volatile. Adding more financial flexibility to the transit worker situation might be a good idea.

Arun Khanna said...

This is not a good comparison since transit workers will be unwilling to take a salary cut in lean revenue years for NYC.
The benchmark for transit workers should be compensation paid to transit workers in other cities with a cost of living adjustment for NYC.
The benchmark for Wall St. employee bonuses should be performance of the investment bank which employs them i.e. their pay for performance sensitivity.

liberty said...

Profits of private firms have nothing to do with whether the city should offer more pay or earlier retirement to transit workers. They had a very reasonable retirement and pay package already and what is actually needed is some good old private competition to the MTA. Instead they selfishly struck right before Christmas, reducing revenue for hundreds of small businesses that survive on Christams sales, and acted as a grinch for millions of NYers who couldn't go Christmas shopping for several days.