The New York City transit strike has me puzzled. The right to unionize and strike, and the requirement that an employer negotiate with a union, is an artificial right created by the government, along with copyright and patent. The government does not allow certain workers, such as police and firemen and, in this case, transit workers, to strike. The transit workers strike was illegal. A typical analysis of transit worker pay shows that they get at least 30 percent more than they would in a competitive market. The pensions are particularly expensive for New York City taxpayers, providing for retirement at age 55 with 50 percent of the final year’s compensation (typically this works out to 100 percent of a normal 40-hour-per-week salary because a worker will get a lot of overtime shifts in his or her last year and the pension is based on whatever was earned in those final 12 months before retirement, including overtime).
Consider an employer with a 54-year-old worker. The guy is getting paid $70,000 per year to do a job that a young immigrant would be happy to do for $25,000 per year. In one more year, assuming he is still on the payroll, you’re going to incur an obligation to pay this 54-year-old guy $70,000 per year for the rest of his life (30+ more years times $70,000 is more than $2 million). He does something illegal, thereby giving you a pretext for firing him. There are 140 qualified young applicants for his job, folks who won’t want or need a pension for at least 25 years from now. What do you do?
Ronald Reagan faced a similar question during his first year in office, when the nation’s air traffic controllers went out on strike. He fired them all (cnn story), and replaced them with younger, cheaper workers (there was no disruption in service, as supervisors picked up the load and worked overtime). One would naively imagine that it is easier to replace a bus driver or a subway car cleaner than an air traffic controller. New York City is more strapped for cash than the Federal government. Regardless of the merits of the transit workers’ demands, it seems unfathomable that Mayor Bloomberg resisted the opportunity to fire all of the workers who stayed out. What is different about this strike than the ATC strike of 1981?
I’m not going to bother with the blatant disregard for ethics in the phrasing of your questions.
Air Traffic controllers work in a controlled environment where strikers cannot approach them; they merely have to cross a picket line to get in. Can you imagine being a newbie bus driver on the street while a few thousand newly fired strikers are motivated to harrass and stop you? Yeah, that’ll be a really workable situation.
In one more year, assuming he is still on the payroll, you’re going to incur an obligation to pay this 54-year-old guy $70,000 per year for the rest of his life (30+ more years times $70,000 is more than $2 million).
From Steve Gillard’s blog:
“We demand much from them and they claim that their workers die at 60, with bus drivers dying at 57.”
I’d also like to point out that people tend to flip out when they see the 2 million over 30 years, but no one bats an eye the 50 million that Lee Raymond of Exxon makes a year or the retirement packages that people like Jack Welsh get which include country clubs fees and multiple homes.
Well, you say the ability to strike is a government created right. I don’t see what you mean here. Perhaps you mean the ability to unionize or strike without getting fired is a government created right? Perhaps that answers your question in part? In a free market, workers can unionize and strike, and may get fired for doing so. Union laws exempt unions from anti-trust of course, and protect organizers from getting fired for organizing.
Reagan’s move was, as you surely recall, considered extremely bold. Many people did indeed fear that planes would crash over it. Some still insist they almost did, but I don’t know how to judge those claims.
One thing to look into: Air traffic controllers do a near-perfect job. It is extremely rare to see a passenger death blamed on ATC, though there are obvious and grand exceptions including Tenerife (which has other causes, including indirectly terrorists.) Perhaps bus accidents are frequent enough that even experienced drivers would have one in the coming month — except this time, with the new hires, it would get blamed on the firing by the public. The public never accepts people dead to save money from a politician, though the New York mayor is early in his new term.
Of course New York is, as I am sure you also know, a place where unions are very powerful, including politically. The other unions of New York, if angered, combined with the transit union, might be able to exact too much of a price. Reagan with the added chops of having been a union leader in the past, was not as subject to union political power.
Why should Bloomberg worry? The taxpayers will bail the m out. Bloomberg has a life after mayor to worry about.
Fire the strikers and hire the displaced bus drivers from New Orleans who would’ve never dreamed of making $70K a year. Learning the streets of the Bronx may take a while though.
Reagan used military ATC to pick up the slack, supervisors alone could not have done it. It may have been a bold action on Reagan’s part, but certainly not a reckless one, he made sure he had his bases covered and face down PATCO from a position of strength.
Mayor Bloomberg does not have military bus drivers at his disposal to provide for an orderly transition, nor the emergency powers vested in the President of the United States by the Taft-Hartley act.
“The guy is getting paid $70,000 per year to do a job that a young immigrant would be happy to do for $25,000 per year. ”
Doesn’t the same argument apply to abolishing tenured teaching positions at Universities?
India is full of talented computer science professionals, many with terminal degrees. May of these well qualified individuals would be glad to replace American University professors for much lower salaries, shorter vacations, reduced retirement pay, and no tenure.
Should we open the floodgates?
If I weren’t such a wimp, I’d be able to give this post the response it truly deserves. Fortunately, the Web gives us Steve Gilliard, who does my work for me.
Now for my own, wonky, wimpy response: Note that while it may be possible for air traffic controller “supervisiors to pick up the load and work overtime”, that doesn’t work for bus driving. No matter how many corners he cuts or coffees he drinks, the chief of the MTA can’t drive more than one bus at a time.
Note also that if airline pilots go on strike, nobody ever suggests that replacing them with air traffic controllers — let alone untrained immigrant labor — would be a good idea. And nobody wants to fly on a plane whose mechanic is on strike.
I’ve never experienced a train derailment. Have you?
All this is moot, of course, because the other big reason why the New York city government couldn’t fire the strikers is that it would have pissed off a huge bloc of constituents: the workers, their friends and relatives, and their allies in the other public employee unions. And, apparently, a majority of the city’s residents. Air traffic controllers were a relatively small group of people, spread thinly across the country. Reagan could survive without their votes, and he didn’t have to live down the street from any of them.
Jim: Of course the argument applies to universities and tenured professors. The management would love to fire most of their over-50s. They don’t because their agreement with the union, http://www.aaup.org/, prevents them from doing so. The difference is that there is no large group of university professors anywhere that has had the gumption to engage in any sort of illegal activity that would give the managers a pretext for firing them.
A university, like any other enterprise, is best off financially with a young workforce that works hard and whose health insurance costs are low.
The issue, in my opinion, it is no if the MTA workers earn “competitive” wages. There are many of things that are unfair and, frankly, it bothers me a lot less that a subway conductor makes 30% more than “the competitive market salary” than to hear that the president of a failing non-for-profit hospital in NYC makes a cool one-million dollar salary. What I consider outrageous is that MTA can strike and mess the lives of millions of people. It is unfair and illegal.
What is different in this case (when compared with the air traffic controllers’ strike of 1981) is that most of the MTA are minorities and poor and NYC is a very liberal city.
Unions and strikes have been some of the greatest tools against unfair, unsafe and unsustainable working conditions that have ever been invented. As for being illegal – The United States Government is guilty of Illegal Practices 1,000 times over and has cost this country much more than some busdriver’s demands. This post has been one of the most ill-conceived and insensitive posts on any website I think I’ve ever read of yours, ever. These may be questions you may want to pose to your fellow Bostonian professor, Mr. Zinn.
Justin: Like some of the other commenters, you’ve ignored the critical phrase “Regardless of the merits of the transit workers’ demands” in my original posting. I have expressed no opinion on whether the transit workers should get paid more or less than they currently do. They are free to act in their own self-interest and should presumably demand higher salaries and benefits every chance that they get. They should also want to strike and cripple the economy periodically as a means of forcing the city to pay them more. If not for the law against such strikes, I would expect the transit workers to go out on strike at least once per year, as they do in Italy.
The posting was about management, not unions. Even if you are a big proponent of unions, you have to expect management to act in the interest of its shareholders (the public and the taxpayers in the case of NYC) or itself (e.g., Jack Welch at G.E.).
Reagan was a real Republican. Bloomberg is only a Republican because the Democrats refused to let him run for mayor on their ticket. (What? You need some OTHER difference between Bloomberg and Reagan to explain it?) It is worth considering, though, that Reagan did in fact have the military ATCs who could be diverted without delay into at least temporary duty at civilian posts, whereas assimilating the new applicants for MTA positions would require quite a bit more time. And yeah…a lot of those applications might get withdrawn if the applicants suddenly knew that there was a union sanctioning violence against them for accepting the jobs.
Philip – I’m suprised you make no comment about the current state of ATC. Reagan did us no favors. He busted the union, they hired a bunch of people all at the same time and now, 1 civil service retirement-time period later, they are all retiring as the demand for ATC goes up.
http://www.natca.org/legislationcenter/ProblemStaffingFacilities.msp
The next time you fly in to LAX, remember that the guys on the ground keeping an eye on you are overworked and short staffed, a trend which will get dramatically worse in the next few years. In fact due to the shortage ATC now makes more than they probably ever would have if Reagan et al. just gave in to their demands.
Reagan’s action was correct and reasonable but highly atypical for politicians. Govts near always do what Bloomberg’s did, which is to “negotiate” with unions despite holding all the cards.
The question is: Why do gov’ts abdicate their managerial reponsibliites when it comes to union negotiations?