Paying for those raises

We are as pleased as Mayor Adams that he and his negotiators have reached an agreement with the city’s largest union, DC 37, representing 90,000 municipal employees, over a new contract. A handshake is always preferred to labor strife. By offering a $3,000 ratification bonus (which applies towards pensions) as well as retroactive raises going back to May 26, 2021, Executive Director Henry Garrido’s members are highly likely to say yes.

However, the taxpayers who will be footing the bill don’t get a vote. If they did, they would be asking how can the 1.25% that Adams budgeted for annual raises turn into annual pay hikes of 3% for four years and 3.25% in the fifth year?

As Budget Director Jacques Jiha said on Friday when the deal was announced, “Well, we are going to take some measures to basically find ways to fund the deal. Okay?”

The last mayor and his team said something similar when they did their labor handshakes, promising to work with the unions to find savings in health care. Their efforts produced the Medicare Advantage plan which would save $600 million a year. We liked the idea, but the union retirees didn’t and neither did a judge who ruled it out of bounds unless the City Council changed the law. The Council heard an earful last month and has refused to act.

The group pushing for Medicare Advantage is the Municipal Labor Committee, whose co-chair is the same Henry Garrido. Before counting on the savings from Adams’ deal, let’s see if the savings from de Blasio’s deal ever happen.

We see some easy savings, which could produce a significant amount of money. DC37, and every other local government union (since the city does pattern bargaining), are keeping their premium-free health care, something unfathomable in the private sector, where employee premiums take a big bite out of each paycheck. Why not chip in toward health care like everyone else, including the retirees under Medicare Advantage who would have to pay to keep their current coverage?