100 Economics Question of the Day: An Intermittent Blog: Off the Rails - New York Times

Wednesday, December 14, 2005

Off the Rails - New York Times

Let's take a look at the data presented as evidence that NYC transit workers should be grateful for management's largese:

For example, the authority wants to train subway operators to work as conductors and vice versa. In exchange, workers would get a 3 percent raise the first year and 2 percent the second (with the second year's raise contingent on the workers' cutting back the number of sick days they take to 2002 levels). Their above-average paychecks would increase in line with inflation.


That "above average" excludes that these are specialized jobs, and that "the market" is determined solely by the contract. (Unlike my profession, where people who believe they are short-changed are free to vote with their feet, the NYC Transit Authority has a monopoly, in exchange for which is negotiates with the workers.)

So those pay increases are contingent on (1) additional work outside of the area of specialisation and (2) reducing sick days to receive a 2% raise [which, last I checked, is not quite "in line with inflation"].

But it gets more interesting:
Union members now pay nothing toward their own health-insurance premiums; the authority wants new workers to contribute about 2 percent of their pretax wages before overtime toward those health benefits.

So the real "increase" would be 1% the first year and 0% (nothing) the second year.

Mr. Gelinas closes by declaring that if there is a strike, New Yorkers "should think about which side - the authority or the union - has acted unreasonably."

I'm certain there is a clear benefit to doing more work for less money, but if this is what the Manhattan Institute--and, by extension, The New York Times--thinks of as a "reasonable" offer, I would hate to see their idea of one that is favorable to management.

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