N.Y. Labor Unions Are Biting The Hand That Fattens Them

by E.J. McMahon |  | New York Post, NYFiscalWatch

Talk about ingratitude. Some of New York’s top labor leaders are making it known that they may not support the reelection of David Paterson, long one of their most steadfast allies in Albany.

It’s not as if this governor wasn’t already doing everything in his power to minimize the recession’s impact on organized labor in New York.

Paterson caved to the unions’ top state budget priority – a record increase in personal income taxes – after saying for months that it would be a bad idea. And that’s not all. The governor also:

  • Stopped pushing his own proposal to cap school property taxes, which was stridently opposed by the state teachers union, after it surprisingly managed to pass the state Senate last year.
  • Allowed the Metropolitan Transportation Authority to seek binding arbitration of a new contract with Local 100 of the Transport Workers Union, forgoing the troubled MTA’s best shot at negotiating changes in costly work rules and compensation levels.
  • Insisted on an agreement to ensure union wages and work rules apply to construction work on the biggest economic development project in New York’s history – a state-subsidized, $4.2 billion computer chip manufacturing plant north of Albany.
  • Pressured landlords that lease property to the state to pay prevailing union wages.

While governors in other hard-pressed states are actually reducing the salaries of their public workers, Paterson’s failure to wring significant concessions out of New York’s public employees unions has been especially notable. In the face of a $15 billion budget gap, he only meekly requested a wage freeze and a reduction in retiree health benefits from state unions – waiting until the final days of budget negotiations to warn of layoffs if givebacks weren’t forthcoming. Then, barely two months after the layoff threat, the governor rescinded it and backed off his request for a wage freeze – in exchange for the unions’ permission to let him offer $20,000 retirement incentives to 4,400 nonessential employees.

The unions also agreed to drop their opposition to the governor’s proposal to enroll future government workers in a new “tier” of pension benefits only slightly less lavish than those available to current employees. Under Paterson’s plan, public pensions in New York would remain far more generous than those typically available in the private sector. Most important of all, from the union standpoint, the existing defined-benefit system would be preserved, despite the billions in added costs it will soon impose on taxpayers.

To his credit, Paterson did veto an extension of increasingly unaffordable pensions for cops and firefighters. But his proposed replacement plan hasn’t even been voted on by the Assembly, much less the chaotic Senate, so the issue remains in limbo.

Ironically, the more Paterson panders to unions, the more he narrows his budgetary options and feeds the impression that he isn’t really in control, and the lower his job-approval ratings drop – accelerating a spiral of political decline that now has him in danger of losing union support.

There’s an important lesson in this for Andrew Cuomo and New York’s other potential gubernatorial candidates, Democrat and Republican alike.

Embracing the organized labor agenda may win you the backing of New York’s richest, best-organized special interest groups and of the political machines they control. But it will ultimately cost you the enduring support of just about everyone else, because the untrammeled power of labor unions in New York – especially government employee unions – shapes up as the single greatest obstacle to the Empire State’s economic and fiscal recovery.

In the end, what the unions fear most is being on the losing side. What they respect most is power, effectively wielded by a credible leader. And that is why they are on the verge of abandoning the best friend they ever had in New York’s governor’s office.