Singing the NYC Transit Worker Blues

City Journal had an article this spring which explains the tangled web of political and financial dealings that make the NYC transit system lurch from one crisis to the next, which is worth reading in its entirety. It explores some ideas for market-driven solutions similar to those implemented by Tony Blair for the London Underground. Since the New York Metro Transport Workers Union is holding the system hostage right now, here's the dirt on them:

The Transport Workers Union opposes any real cost-cutting efforts, such as a plan to restructure all above-ground rail operations into a single new subsidiary, and all bus operations into another—a consolidation that could save $210 million over three years. Why the resistance? The new bus division would have the authority to cut civil-service protections for new employees—who would still have their union security, of course, but transit workers are accustomed to two layers of insulation from management.

The one modest consolidation that Kalikow did get labor to accept carried a stiff condition that means it will save only millions instead of tens of millions, as the MTA had first hoped. In 2002, bus lines in Brooklyn and the Bronx—formerly private lines that the MTA had purchased decades ago—were merged with the rest of the MTA bus operations. Until then, these lines operated as separate units, so that a mechanic from a Brooklyn depot could not repair a Bronx bus that had belonged to a private company decades previously, even if the bus had broken down across the street from the Brooklyn depot. But when the TWU accepted the consolidation, the MTA had to give legacy employees of the formerly discrete bus units full MTA benefits, including 12 days of sick leave each year instead of five.

The MTA has had scant success in pushing transit workers to boost their productivity in exchange for raises. Three years ago, Kalikow got the TWU to accept a few basic efficiency provisions—not enough to cover the cost of the raises, and nowhere near the cost-saving labor flexibility he wanted, which would have required workers who clean stations to perform extra duties, like removing graffiti and changing lightbulbs, as they clean.

Meanwhile, the agency’s heavy health-care costs for these same employees, $873 million this year, or 9 percent of the MTA’s budget, are expected to balloon to $1.15 billion by 2008. These costs include a new prescription-drug benefit for NYCT retirees who aren’t yet old enough to qualify for Medicare. “Local 100 may be the only union in the U.S. that can claim health benefit improvements this year,” union leadership exulted in 2002. And there are plenty of retirees, since most NYCT employees can quit working after only 25 years of service at a lavish pension of 50 percent of their average last two years’ pay. Switching to a system of 401(k)s, as most private-sector employers have, would cut these swollen costs and would give workers an incentive to stay on the job for more than 25 years to increase personal savings.