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**nmnrIjGB** · 12-17-2009, 06:56 AM

Back to the topic, a superb article:

http://roomfordebate.blogs.nytimes.c.../?ref=nyregion

Get Smart With Labor

Nicole Gelinas, a contributing editor to the Manhattan Institute City Journal, is author of “After the Fall: Saving Capitalism from Wall Street — and Washington.”

Seven months ago, the state-run Metropolitan Transportation Authority won a $2.1 billion bailout. Today, it is preparing to make the same “draconian” service cuts that it threatened last year.

The problem is that New York’s labor costs are unsustainable and consume money for physical investments. The deficit is a leadership deficit.

Powerful unions cannot continue to enjoy outdated compensation and rule packages at the expense of riders and New York’s economic future.
If the authority’s costs had kept up with inflation during the last half-decade, the M.T.A. would not face big deficits today. Instead, labor costs have increased more than 40 percent, driven by pension and health care benefits. Next year, pensions and health care will cost the authority nearly $2.2 billion, more than one-fifth of its cash operating expenses. Debt costs are up, too, and the reason for so much debt is that labor costs require so much cash.

These problems are not temporary — caused by the recession — but indefinite, caused by poor political decisions. The authority’s unionized workers in New York City can retire as early as 55 with generous health benefits. Long Island Rail Road benefits are legendary.

This is not compensation for low wages. Average pay for the authority’s city union members is more than $64,000. Subway and bus workers recently won an 11.5 percent raise over three years, costing the M.T.A. $193 million in 2010, more than service cuts will save. Similar generosity at state government is why Albany had to take away $143 million of the authority’s money for its own deficit. Work rules, too, add costs.

Immediately, the authority cannot do much about these costs, which are contractual. M.T.A. chief Jay Walder is cutting the non-union budget, including, possibly, 10 percent pay cuts, and there’s plenty more to do administratively. “It’s apparent to me that we don’t operate in a way that ensures that every taxpayer dollar that we receive is being used as effectively as possible,” Walder said Wednesday. But administrative cuts are not enough to avoid public pain.

Longer term, it comes down to political leadership from Gov. David Paterson, Mayor Michael Bloomberg and lawmakers. Skilled workers should be paid fairly, and current workers have a right to the pensions that Albany has promised them. But powerful unions cannot continue to enjoy outdated compensation and rule packages at the expense of riders and New York’s economic future.

12-17-2009, 06:56 AM	#42
nmnrIjGB Join Date Oct 2005 Posts 356 Senior Member	Back to the topic, a superb article: http://roomfordebate.blogs.nytimes.c.../?ref=nyregion Get Smart With Labor Nicole Gelinas, a contributing editor to the Manhattan Institute City Journal, is author of “After the Fall: Saving Capitalism from Wall Street — and Washington.” Seven months ago, the state-run Metropolitan Transportation Authority won a $2.1 billion bailout. Today, it is preparing to make the same “draconian” service cuts that it threatened last year. The problem is that New York’s labor costs are unsustainable and consume money for physical investments. The deficit is a leadership deficit. Powerful unions cannot continue to enjoy outdated compensation and rule packages at the expense of riders and New York’s economic future. If the authority’s costs had kept up with inflation during the last half-decade, the M.T.A. would not face big deficits today. Instead, labor costs have increased more than 40 percent, driven by pension and health care benefits. Next year, pensions and health care will cost the authority nearly $2.2 billion, more than one-fifth of its cash operating expenses. Debt costs are up, too, and the reason for so much debt is that labor costs require so much cash. These problems are not temporary — caused by the recession — but indefinite, caused by poor political decisions. The authority’s unionized workers in New York City can retire as early as 55 with generous health benefits. Long Island Rail Road benefits are legendary. This is not compensation for low wages. Average pay for the authority’s city union members is more than $64,000. Subway and bus workers recently won an 11.5 percent raise over three years, costing the M.T.A. $193 million in 2010, more than service cuts will save. Similar generosity at state government is why Albany had to take away $143 million of the authority’s money for its own deficit. Work rules, too, add costs. Immediately, the authority cannot do much about these costs, which are contractual. M.T.A. chief Jay Walder is cutting the non-union budget, including, possibly, 10 percent pay cuts, and there’s plenty more to do administratively. “It’s apparent to me that we don’t operate in a way that ensures that every taxpayer dollar that we receive is being used as effectively as possible,” Walder said Wednesday. But administrative cuts are not enough to avoid public pain. Longer term, it comes down to political leadership from Gov. David Paterson, Mayor Michael Bloomberg and lawmakers. Skilled workers should be paid fairly, and current workers have a right to the pensions that Albany has promised them. But powerful unions cannot continue to enjoy outdated compensation and rule packages at the expense of riders and New York’s economic future.
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