Late yesterday, Mayor Bloomberg announced a two-year labor agreement with District Council 37, New York City’s largest public-sector union. The agreement is a missed opportunity for the city, which stands on the brink of what could be an unprecedented drop-off in tax revenues and a long economic retrenchment.

I’ve got an op-ed up at City Journal explaining exactly why the deal, which requires $370 million in new spending, is a missed opportunity. First, it locks in higher long-term costs for more than 100,000 employees just as New York’s tax revenues — and even overall consumer prices — could actually fall.

Second, the deal means that Bloomberg has likely lost the last chance in his second term to wring even modest long-term concessions on benefits costs from a major civilian union.

Consider: asking public employees and retirees to pay just 10 percent of their own health-insurance premiums would save New York nearly half a billion dollars annually, according to the Independent Budget Office.

DC-37, because its workers are civilians and not first responders, would be a good place to start negotiating for such savings. Its workers’ jobs are comparable to jobs in the private sector, which almost invariably requires such payments from employees.

But please read the whole thing here.

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The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.