When I was a teen, the rule of thumb was that being a civil servant meant taking a lower rate of pay than one might make in an equivalent position in the private sector, in exchange for greater job security. But, for at least two decades, that has hardly been the case:
According to the Manhattan Institute, the average bus or subway driver–the most-skilled job in the union by most standards–is already paid $63,000 a year. The person who sits behind the bullet-proof glass in what used to be called a token booth, and who now says for most purchases you have to use the metro-card machines, takes down an average of $51,000. And the least-skilled work, though certainly the dirtiest, is the subway cleaner who clocks in at an average of $40,000.
Compare that with the average New York worker. Take out Wall Street, where mega-bonuses skew the average unfairly, and the average private sector worker earns $49,000. Peel off the college-educated (which you don’t need for most transit jobs) and the average income drops to well below $35,000. That includes everyone from a skilled factory worker to the clerk in Bloomingdale’s.
Nationwide, according to the Bureau of Labor Statistics, the average unskilled worker (we’ll put the cleaners in that category) earns $23,753 a year in the private sector; in the public sector that jumps to $30,056, but is still ten grand less than a New York subway cleaner. The disparity jumps even further when you look at the nationwide “transportation workers” as a specialty. There the average annual wage is $30,846 in the private sector and $34,611 in the public sector. Clearly, it pays to work for the government. But it pays even better to work for the MTA (Metropolitan Transit Authority)–indeed 80% better. New York is expensive, but not that expensive.
The reason? compliant elected officials have failed to hold the line against public employee union demands
* In 1994, then-Gov. Mario Cuomo signed a law giving transit workers the right to retire at age 55, with a half-pay pension, after just 25 years on the job. At the time, employees opting for this 25/55 benefit were required to make an added pension contribution equal to 2.3 percent of their annual salaries.
* In 2000, as part of a series of pension sweeteners affecting every government employee in the state, Gov. George Pataki and the Legislature agreed to reduce transit workers’ regular pension contributions by one-third, and to eliminate the added contribution for the 25/55 benefit. This effectively amounted to a 3.3 percent increase in transit workers’ base pay, on top of pay hikes in that year’s contract.
* In 2003, fresh from another negotiation with the MTA, the union persuaded state legislators to introduce a bill allowing transit workers to retire with half-pay pensions at age 50, after just 20 years on the job.
Coming at a time when the state, city and MTA were awash in red ink, the 20/50 pension sweetener would have cost more than $100 million a year. Nonetheless, just before adjourning in 2003, the Legislature approved the bill. The vote tallies were as good as it gets — 148-0 in the Democrat-dominated Assembly, and 62-0 in the Republican-controlled Senate.
Pataki killed the measure with a “pocket veto” in early 2004. Even then, however, he didn’t object in principle to 20/50 pensions. Instead, in a tepid veto message, the governor cited technical problems with the bill, expressed qualms over its cost and said he was “constrained to disapprove the bill” based on the objection of the MTA and Mayor Bloomberg, “who contend that this type of enhanced benefit should be the subject of mutual agreement through collective bargaining.”
Indeed, this problem is nationwide:
The pension deficit now reported by state and local governments totals $278 billion. If these governments adopted the more conservative estimates used in the private sector, however, the total deficit would be $700 billion. This amount does not include retiree health benefits.
New York City put $2.46 billion into its pension fund in 2004 — eight percent of the total city budget. By 2007, the City expects pension contributions to hit $4.9 billion, or 12 percent of its total budget. Illinois’ pension plans are facing a $35 billion deficit in a state with a total operating budget of $43 billion.
Legislation to end defined benefit pensions in favor of defined contribution plans similar to 401(k)s for government employees has been proposed in Alaska and Maryland. Georgia, Illinois, Kansas, Minnesota, New Mexico, South Carolina and Virginia are all considering a shift to defined contribution plans.
California Governor Arnold Schwarzenegger has proposed ending the California defined benefit plan and instituting a 401(k)-type plan instead. California contributed $3.5 billion for pension and health care benefits for its retirees this year, almost triple what it paid three years ago. Schwarzenegger has indicated that he will put the public employee pensions issue on the ballot in 2006.
For years, state legislatures and local governments were able to justify higher overall benefits for public sector workers because wages in the private sector were generally higher. With the employer attack on private sector unions and the decline in wage growth in the private sector, however, public sector labor costs are now higher than private sector costs.
Total compensation costs for state and local government employees were $34.72 per hour worked in 2004, compared with $23.76 for private-sector workers, according to BLS and Census Bureau data. Public sector benefit costs are approaching 40 percent of total compensation, compared to 30% in the private sector, and pressure is building to cut these costs dramatically.
The disproportionate political power of public employee unions has not only been due to their massive financial power, but that they have always been able to muster legions among their membership, to man phone banks and walk precincts, in support of their favored candidates.
But, as the rush of angry comments – on the TWU’s own blog – demonstrate, the general public is feed-up:
The Transport Workers Union Local 100 has a blog. The Blog had comments. But no longer. Fortunately the comments were cached before the union tried to make all those angry New Yorkers go away. Bloggers wrote a lot about the strike, but the comments on the union site really seemed to catch the enmity of a lot of New Yorkers towards the union.
Sample Quote: “You guys really have a lot of balls. All you do is drive around in circles. Your job isn’t hard at all. You get paid as much as cops and firemen, while much more as teachers. Something is wrong. You’re asking for way too much here. Back down and know your roll. You guys aren’t as high and as mighty as you think.”
Thanks to Bill for finding this cache!
Hey, Local 100: you guys weighed the options, asked for support and chose to go on strike. So you ought to own and acknowledge citizen’s reaction. Censorship is so lame.
Think about this: Reagan replaced the air traffic controllers without much problem (largely due to highly trained, but unemployed vets). But what do you think it takes to train someone (even with military experience) to manage a crowded airspace, verses sitting in the front of a train, to put on the brakes, should the (virtually infallible) computerized controls go awry?
I have no issue with their right to strike – regardless of New York law. But we must recognize that these people are the Deltas of the world. And, while our private sector is blowing off these high pay/low skill workers in droves, they keep holding on in the public sector. This situation cannot endure.
