UPDATE: My WOR radio interview on this topic with John Gambling is here.

A labor arbitration panel reportedly is prepared to award raises of nearly 12 percent over the next three years to Metropolitan Transportation Authority (MTA) employees represented by Local 100 of the Transport Workers Union.  The arbitration award would also water down a 2005 contract agreement requiring union members to contribute a small share of their health insurance premiums, and would cost $400 million more than the transit agency has budgeted for 2009-11, according to the Daily News.

Here’s how the settlement–a wage increase of 4 percent in each of the next two years, and 3.5 percent in 2011–would look in New York City’s current economic context:

mta-wage-chart-3909936

It isn’t too surprising that arbitration resulted in a larger award than the MTA had budgeted in its already leaky financial plan.

Governor Paterson is ultimately responsible, since MTA managers couldn’t have punted the contract to binding arbitration without the permission of (or a push from) their ultimate boss in Albany.  Mayor Bloomberg is also partly to blame, since his ill-advised contract settlements with city unions last fall established the “pattern” that apparently will be folowed by the arbitration.  Of course, that’s not the way Bloomberg sees it.   From today’s News report:

Bloomberg acknowledged he too recently gave 8.16% in raises to 6,692 of his city managers and nonunion employes.

“The city’s finances are different than the MTA’s finances,” he countered.

“The city’s workforce is different, so there’s no reason to think that if one does something, the others automatically have to get it,” he added.

The city is different?  How so?

About the Author

E.J. McMahon

Edmund J. McMahon is the Empire Center’s founder and a senior fellow.

Read more by E.J. McMahon

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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.