Transit Workers End Strike, Agree to Negotiate
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JEFFREY BROWN: The decision this afternoon by transit union officials to have members return to work promised relief for some seven million New York commuters enduring their third day without public transportation.
Negotiations between the Transport Workers Union, or TWU, and the metropolitan Transportation Authority, the MTA, had gone on all through last night. This morning, mediator Richard Curreri announced a breakthrough.
RICHARD CURRERI: We have requested the leadership of the TWU to take the actions necessary to direct its membership to immediately return to work, and they have agreed to take such actions.
JEFFREY BROWN: The nation’s largest transit system came to a complete standstill on Tuesday. The action by the city’s 33,000 transit workers was the first in 25 years. New York state law bars public employees from striking, and a judge had imposed $1 million-a-day fine on the union. Bitter negotiations had centered partially on wages and benefits. But pensions became the major sticking point.
The MTA dropped its initial demand to raise the retirement age for a full pension to 62 for new employees, up from 55 for current employees. But the Authority demanded that all future transit workers contribute 6 percent of their income for their first ten years, instead of the current 2 percent. Yesterday, union leaders blasted that proposal.
SPOKESMAN: They impose this on the negotiations, it’s illegal and burdens the negotiations and should come off the table.
JEFFREY BROWN: This afternoon, New York City Mayor Michael Bloomberg warned that the issues involved in this battle could play out in other places as well.
MAYOR MICHAEL BLOOMBERG: The takeaway message is that the increased cost of pensions and medical care is a serious issue for every municipality and for every private, everybody in the public sector — in the private sector as well. And everybody is grappling with the same set of problems. There are no easy answers.
JEFFREY BROWN: The strike forced millions of New Yorkers to brave frigid temperatures while walking, biking and carpooling to work. It also took a large economic toll, with many businesses reporting record low sales for the holiday season. Many New Yorkers were clearly put out, as traffic jams stretched for miles.
WOMAN: This is unconscionable. It is the worst time of the year they could do this, to cripple the working-class people — just horrific.
JEFFREY BROWN: But some expressed support for workers and their decision to walk out.
WOMAN: I can understand them striking because of their pensions, because pension is very important, and who would want to wait till they’re 62 to get their retirement money?
JEFFREY BROWN: This afternoon, Mayor Bloomberg said the city’s buses should be running this evening, and the subways tomorrow morning.
JEFFREY BROWN: The two sides will now resume their contract negotiations, and apparently the key benefits and retirement issues remain on the table.
To look at those and their impact beyond New York we’re joined by Harley Shaiken, a professor at the University of California at Berkeley, who specializes in labor issues; and Rick Berman, a labor attorney and head of the Employment Policies Institute, a think tank funded by a variety of business groups and foundations. Welcome to both of you.
Harley Shaiken, starting with you, let’s start with the issues particular to this very public fight in New York. Why do you feel that the transit union thought going on strike was a good idea? And why today did they decide to go back to work?
HARLEY SHAIKEN: Well, I think no one wanted this strike. There was this sense that this was the only alternative that they had. And I think the transit workers that came down in the final hour to the issue of pensions. There was principles and precedence that were involved here. And that caused them ultimately to use what might be called the nuclear option, which was going out on strike with all the cost that would be involved in that.
Now it is clear why they went back. It’s one thing to contemplate the strike and to know your economic power and another thing once the fines were implemented and even larger fines and possible jail sentences were there pending.
So I think they went on strike knowing that it was a very, very difficult thing to do. But they felt that their future as a union and the implications this would have for the members for many years down the road would be at stake.
JEFFREY BROWN: And Rick Berman, from the perspective of the MTA and the city, what was the key thing for them to hold the line, and does it look like they were able to?
RICK BERMAN: Well, we don’t know if they are going to be able to because although the employees are coming back on the job, they’re still going to renegotiate or continue to negotiate the contract.
We don’t know why these people took such a firm stand on the union side. But it’s very clear that the MTA is taking the same stand that so many cities and towns and municipalities, even water districts are going to have to be taking over the years to come because there is now going to be a reckoning from accounting standpoint starting in 2007 for all of these small cities, states, again, municipalities, where they’re going to have to actually project out what their costs of pension and health care — healthcare benefits are going to be going into the future.
And today most of these governmental agencies are just accounting on a year-by-year basis. They’re not projecting out how much this is going to cost in the future. When that number is on the table, they’re either going to have to start cutting back benefits or cutting back services or else we’re going to have an unsustainable situation in the future.
JEFFREY BROWN: Well, let me ask you, Mr. Shaiken, on the pension issue in particular in New York City it looks as though it came down to trying to create a two-tier system for current workers and future workers. Am I reading that right, and if so, why is that the key issue?
HARLEY SHAIKEN: Absolutely, you are reading it quite correctly. I’m actually getting a very bad feedback here.
JEFFREY BROWN: All right. We’ll try to fix that. Let me ask the same question of Mr. Berman while we fix that.
Explain that, the two-tier issue here between future and present workers.
RICK BERMAN: Well, again, this is what makes this particular strike so difficult to understand. What the MTA said was to make this politically palatable they would only require reductions in pensions and in healthcare benefits for people who have yet to come to work for the subway or the transit system, that they were going to have a two-tier system, people would be grandfathered who are already on the job, and now there would be an additional payment made by new employees.
So the union was actually striking over the benefits for people who have yet to become employed or to become union members, which makes the whole situation that much more bizarre.
JEFFREY BROWN: Well, Mr. Shaiken, can you hear me okay now?
HARLEY SHAIKEN: Yes, I can now.
JEFFREY BROWN: Okay so, try to explain to us from the labor union’s perspective why that would be important to hold the line on this two tier arrangement.
HARLEY SHAIKEN: Well, for two reasons: First that the new tier that is the 6 percent that new workers would pay, existing workers felt very strongly in the next round of contract negotiations that would become the standard that they would also be asked to pay.
Second, solidarity is a key issue for unions. And as Mr. Toussaint, the president of Local 100 put it, they wanted to protect the unborn, that is people who would be coming in in the future. So they both had their own self-interest; that is, if they gave up what they had won with so many battles in the past for new workers, they themselves, in future contract negotiations would pay that penalty.
As a result, that 6 percent introduced at the very last minute became the sticking point that did result in the nuclear option and precipitated the three-day strike.
JEFFREY BROWN: Do you, Mr. Shaiken, if we broaden this out a bit as Mr. Berman did, do you see the issues — oh and also as Mayor Bloomberg did in our set-up where he talked about this applying in public and private sectors, how do you see the issues in New York playing out in other cities, for example?
HARLEY SHAIKEN: I think the very same issues we will see in many other cities and in the private sector as well; in fact, throughout most of 2005, we’ve seen enormous conflict and turmoil in collective bargaining over the issue of pensions and how to pay for health care.
What we’re seeing in New York today is particularly dramatic and on a very large scale. But these are the same issues that are roiling collective bargaining throughout the United States, public and private sector.
And unless we begin addressing these through public policy, not simply on the level of one bargaining unit or one industry, I think we will see a lot more of this in the years to come.
JEFFREY BROWN: So Mr. Berman, when you weigh the tools that the unions have versus the cities or companies in the private sector, who has the upper hand or who has what tools that they can play at this point?
RICK BERMAN: Well, in the first case if we just look at New York, these union leaders and I stress the union leaders, not the union members themselves, were taken off a cliff. They violated the Taylor Law. It is illegal to strike if you are a public sector employee in New York.
It is no more legal for the transit workers, the bus drivers to strike than it is for policeman or for fireman. And so they were establishing a horrible precedent by going out on strike.
I do believe that there is an ethical and moral issue here that the union members have to address. And they have to understand that if they are going to work for a public sector union, that one of the things that they are giving up is the right to strike.
No one was required to work for the transit union without giving up that right. They knew it ahead of time when they went in there. If we take this out further, what we see if I can play off of what Harley said, what we see in the private sector is that these benefits become unsustainable over time and that companies are basically going bankrupt.
What is going to happen at the city level is that the cities will either go bankrupt or the cities will have to cut services or bond ratings of the cities will become so high that cities won’t be able to float these bond offerings and get enough money in for infrastructure, et cetera. So this whole thing is unsustainable.
And Harley is right that something has to be done. But the something that has to be done is that the union leadership in many of these cases have to become more courageous. They have to become more moral in their — in their delivery of services. They have to become more ethical and they have to face reality.
In the private sector businesses, have found out that there is a country called China. In the public sector we’re going to have to find out that the public, who the unions are really striking against, they’re not striking against the city, they’re striking against the citizens, they’re going to have to find out that if the citizens don’t want to pay for something, than they just can’t demand it.
JEFFREY BROWN: Mr. Shaiken, how do you — we all see these pressures in both the private and public sector. How do you see what should happen next for both labor and for management?
HARLEY SHAIKEN: Well, I think we have to look at history for a moment, in post World War II America this economy succeeded in important measure because we had a social contract between employers and employees, whether in the public or in the private sector, that essentially said you work hard, you raise productivity, you will be rewarded when you no longer work when you retire. Your health care will be taken care of. You will be provided with security.
What we’re doing now is unraveling that social contract and that has enormous implications for the economy, but for us as a society, we’re essentially telling people that what they’ve worked so hard, often giving their working lives for, is become unraveled. And what they have been led to count on, they’re no longer going to have. And that remains particularly important within the public sector.
There were, of course, legal issues under the Taylor Law but there were also moral issues here concerning the very hard work that people in this industry and the transportation sector, in New York do, working in tunnels eight hours a day, driving buses in demanding situations, these are hard, stressful jobs. What these workers were asking was hardly outrageous and done in the shadow of a billion dollar surplus this year for the Transit Authority.
Now admittedly, there are projections in the future that that surplus may not be there, that there may be a deficit. But that doesn’t take away from the fact that that surplus is there today, and essentially not rewarding transit workers or seeking major take-backs within a contract negotiation I think set the context that ultimately spilled over into this strike.
JEFFREY BROWN: All right, well, we will see what happens in New York and beyond, Harley Shaiken and Rick Berman, thank you both very much.