Eric’s union haggling figure$ to get worse
THE best thing to say about Mayor Adams’ first-ever labor deal, tentatively agreed last week with the city’s nearly 100,000-strong civilian workforce, is that it could be worse. Except: It will get worse.
Adams and the chief of the District Council 37 union, Henry Garrido, announced Friday they had come to a 5¹/₂-year labor deal, awarding raises to everyone from school-cafeteria workers to crossing guards to children’s-services social workers.
Considering the inflationary environment, the raises themselves are the best the city can do.
Retroactive to mid-2021, workers will get a 3% raise annually for four years and then get a 3.25% raise for the final 18 months, for a cumulative total of 16.2%. Workers will also get a one-time, $3,000 bonus.
Remember: Since late 2021, inflation has run above 6% annually, often above 8% (thank you, President Biden!). Because of this persistently high inflation, prices are already 11.1% higher than they were in May 2021, when this contract expired.
Unless inflation quickly reverts back to the 2% or so annual levels that were normal for decades until 2021, DC-37 members will make less by the end of this contract, in real terms, than they did five years previously.
For example: Let’s say that inflation, running at 6.4% right now, settles down to an average of 5% until 2026. If so, by the end of this contract, prices will be 28.6% higher than they were in 2021, meaning workers with a 16.2% raise will have lost some serious purchasing power.
Except: Even so, the city has no way to pay for this deal. The city had only budgeted for 1.25% annual raises. So if applied to the rest of the city’s 300,000-plus labor force, these raises will cost taxpayers an extra $2.5 billion this year and $4.1 billion in extra annual spending by 2027, says the Citizens Budget Commission.
That extra spending turns a $6.5 billion deficit in 2027 to a $10.6 billion deficit, or 13.5% of projected city tax revenues.
And that’s in a best-case scenario. First, that the Fed’s attempts to bring down inflation don’t cause a recession. Already, tech companies and investment banks are laying people off by the thousands.
And second, that the city can actually apply this new 3% raise “pattern” to the rest of the workforce. That’s going to be tough.
DC-37 may have gone first in signing an agreement because its members, the lowest-paid among city workers, just can’t go very long without a raise without inflation eating up their pay.
Teachers, firefighters and police officers, none of whose unions is included in this agreement, make higher salaries: close to $120,000 average for police and firefighters in 2020, and above $90,000 for teachers, compared with lower than $80,000 for the average civilian city worker (much lower in the case of some DC-37 jobs, like cafeteria workers).
And at least some DC-37 members will get a perk out of this: The city says it will now explore hybrid work schedules for some civilian job titles (presumably not crossing guards but people whose jobs involve a lot of telephone and computer work).
Police, firefighters and teachers can’t work at home — and so if working from home is now going to be a “perk” for some civilian jobs, they are going to want a premium for full-time in-person work. You can bet they’ll also want exemptions from commuting costs, including, eventually, congestion pricing.
And uniformed workers have greater leverage in that if they call a strike or work slowdown, everybody notices.
The first real-life playout of this will be the Metropolitan Transportation Authority’s contract with the Transport Workers Union, which expires in May. The MTA isn’t part of the city budget. But the agency is going to want to pattern its own agreement off this deal — that is, 3% raises for workers.
The MTA is so broke that it can’t really afford that. And now, in inking an agreement without requiring any union concessions in return, Adams is making it that much harder for the MTA to demand concessions from its own workforce.
But the bigger question is whether transit workers, who can’t operate trains and buses from home, will even accept a deal like this. Adams may have set a “pattern” no one else will copy — showing, once again, inflation has no winners.