Mayor Says He'll Speak Truth
To the Power of City Unions

By Henry J. Stern

September 25, 2003

    The City of New York customarily signs contracts with its employee unions a year or more after the previous contract has expired.  This practice moots any issues of productivity increases or changes in work rules, since the pay increases are retroactive, and the midst of a contract is never the time to change the rules of the workplace.  These belated agreements are often accompanied by a statement by the city that this is the last time such an agreement will be entered into, and that, in the next round, bargaining for which is supposed to begin at once, the city will insist on reform, etc.  The unions quietly snicker at these pronouncements, because they have heard them before.  The mayors change, the rhetoric remains the same.

     Last year, Mayor Bloomberg announced that $600,000,000 (six hundred million dollars) of a three billion dollar deficit could only be made up by savings in labor costs, and that if these savings were not achieved, there would be substantial layoffs.  The negotiations with the unions on how to achieve savings got nowhere, the main union offer being a two hundred million dollar loan to the city at an interest rate six times as high as what we earn on our savings accounts.  In fact, there were no labor concessions in 2002, while the threatened mass layoffs were confined to some 2900 school aides, many of whom could be rehired because of normal attrition and new parent co-ordinator positions.  The unions had held firm on rejecting givebacks, the city blinked, and the threat evaporated.

    Last week the Mayor helicoptered to Melville, in Suffolk County, to tell the assembled New York City union leaders that there is no money in the till, or available to be borrowed, for wage increases.  The Chief, a well-edited and informative civil service newspaper which reflects labor's point of view, describes the event and the unions' reaction to it.  It is predictable.

    One thing to remember is that labor ritually complains that the city has acted rudely, in bad faith, not consulting them, etc. and that labor relations would be more harmonious if only the unions were kept in the loop, and treated with the dignity and respect their members deserve. There may be an inference that arrogant city officials do not consider their employees to be their social equals, for one reason or another.  This is part of the script, watch for it to reappear.

    I doubt that this administration even has a loop in which labor could be kept.  It is a closely-managed operation, based on the Mayor's twenty years in the private sector as CEO of a privately-held company.  Senior staff at City Hall works in an open bullpen, but its walls largely limit the loop.

    There are, however, certain historic objectives of leaders of public employee unions:

(1) protection of their members, come what may, whether they are competent or inept, sane or insane, industrious or lazy, honest or corrupt, promiscuous in school or chaste, as long as they pay union dues.
(2) enrichment of their members, their dependents and their heirs, regardless of the city's ability to pay,
(3) insulation of their members from any plan that would require that they do more work, even if it only took a nibble of their downtime (when they are paid but idle) and
(4) resistance to proposals which would reward any union member for industry, proficiency, performance or productivity, even if the proposed extra compensation were to be added to the sum the workers as a group would normally receive.

    In the private sector, union demands are somewhat tempered by economic reality, the prospect that the employer may go bankrupt, or lose market share, and therefore jobs, to rivals with lower labor costs.  The survival and prosperity of the employer are important elements in collective bargaining.  In the real economy, unions and management are often in the same boat.

    No such rational considerations intrude in the public sector.  The city cannot flee to an area with lower costs, even though its employers and taxpayers may do just that.  The City is unlikely to go bankrupt because there are state and federal authorities who would intercede, in exchange for assuming control of the city's finances.
   
    The worst the unions have to fear is the layoff of their members with the least seniority.  Even that dire prospect, for younger employees, is considered by labor as better than across the board reductions in pay or benefits, or changes in work rules.  The simple mantra, and it bears restatement, is better 90 happy members than 100 unhappy ones, because the 100 can elect new leaders.  The old leaders would lose their jobs, along with the privileges of their relatives and cronies, their cars and drivers, preferred lawyers and accountants, union welfare and health benefit funds, six figure salaries (sometimes exceeding $200,000) and other perquisites which accompany life devoted to the protection of workers from exploitation.

     The scandals in District Council 37 and the Patrolmen's Benevolent Association have exceeded in scale the misconduct of city employees in the last ten years, and union wrongdoing has been at the top of the food chain, not shakedowns by mid-level personnel which keep the Department of Investigation busy.  At the same time, there are many honorable people who work for labor unions.  They are men and women of integrity and principle, who deserve our respect, even when we disagree with some of what they are trying to do.

    We look forward to the resumption of negotiations with labor assuming that the mayor will cave at budget time April 2004.  If he does stand up and insist on reforms, labor is ready to wait, and bargain instead with the hungry aspirants for his job, in hope that the mayor will be replaced in 2005 by a more pliant figure, anxious to be re-elected in 2009.

    My advice to Mayor Bloomberg is that the best way to get a second term is to act like a one-term mayor--do the right thing on productivity and privatization. Restrict bilingual education, social promotion and other feel-good schemes now indulged in by self-serving clock and calendar watchers in city employ.  And keep a jeweler's eye on the Department of Education.

    You should rely on the people realizing, with the aid of your resources in bringing the message to them, that they have a decent, honest and courageous mayor, and that City Hall should not be turned over to someone who, lacking your resources, will be inevitably dependent on special interests.  On the other hand, if you pander, you may well lose, because they are better panderers than you are, with much greater experience at it and far less sense of responsibility.  Don't postpone reform to the second term; Rule 7 is "Do it now."

Readers' Comments The sad reality is that since the early 60s New York has steadily lost a massive number of private-sector jobs in manufacturing, distribution, and clerical sectors, where there was room for unskilled as well as skilled workers. Today the city by far is the largest employer in the city. To the extent that lower paid city workers live and vote in the city, the municipal unions wield enormous political power and elected officials  in city government tend to become beholden to municipal unions. If only there were some way to make New York City attractive to private sector jobs. If only there were some way to attract back into the city just a few of the service plants and light manufacturing factories that left the city over the years and now ring the city on LI, upstate and in NJ. You are right. Bloomberg has to to act as though he were a one term mayor. But, then remember what Lord Acton said...     Old Buck

Henry J. Stern is the director of NYCivic.