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Anti-PC League

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Day By Day© by Chris Muir.


Thursday, December 22, 2005

Too Little, Too Late?

Talks resume in NY transit strike

Wikipedia has some good info on the strike, such as the union demands:
The TWU is asking for all employees to receive an 8% salary increase per year for each of the 3 years of the contract, plus improved benefits for maternity leave, and better funding for station maintenance. The MTA has offered a 3% raise the first year, a 4% raise the second year, and a 3.5% raise the third year. The striking workers reportedly earn an average of about 48,000 USD annually.

The TWU also wants to lower the age of retirement (at which point the employee is eligible for a full pension) from 55 to 50. The MTA had wanted to raise the retirement age for newer workers from 55 to 62, but dropped this demand in exchange for pension contributions from new workers of 6% of gross salary per year for the first 10 years of employment. Under the previous contract, workers contribute 2% to their pension plan. [3]

Citing the rising cost of health care, the MTA wants new employees to contribute 1% of their salary to pay for health insurance. Transit workers currently pay nothing for health insurance.

At the last minute, the MTA offered a 3.5% per year raise and no change in the retirement age, with the caveat that new transit workers pay 6% of their wages into the pension fund, up from the 2% that current workers pay. The offer was rejected, and a strike declared.

Combined, the pension and healthcare reforms the MTA seeks would cost about 30 million USD over the span of the three-year contract. Critics have lambasted both the MTA and TWU for allowing a strike to occur over such a relatively small sum. However, the pension costs would balloon to 160 million USD in the first 10 years, and 80 million USD per year after 20 years. The MTA claims that its reluctance to give in to the TWU on this point stems from fear of future deficits (projected to be 1 billion USD by 2009).


Now the same site also states that the average salary for a bus or subway operator is $63,000/year! The average salary for a cleaner is $40,000!

Now think about this from an economic standpoint. How many have invested in alternative means of transportation? Will they dump their investment just to go back to riding the train? Also consider the effect on businesses that will now have to lay off or close their doors due to lost revenue, perhaps causing people to get jobs closer to work, or relocate from he city altogether.

This union really pissed some poeple off. I wouldn't be suprised if we see a bigger movement to change the union laws. Which brings up another point:
According to the US Department of Labor, Bureau of Labor Statistics, from 1993-2003 the percentage change in non-farm private sector employees was 17.7% growth overall. The change in Right to Work States was 24.1% growth, while the change in "union shop" States was 14.2% growth.

According to the US Department of Commerce, Bureau of Economic Analysis, from 1993-2003 the percentage change in real personal income was 29% growth overall. The change in Right to Work States was 37% growth, while the change in "union shop" States was 26% growth.

According to the US Bureau of Census, from 1982-2001 the percentage change in manufacturing establishments was 1.5% loss overall. The change in Right to Work States was 7% growth, while the change in "union shop" States was 4.9% loss.

Also according to the US Bureau of Census, from 1993-2003 the percentage growth of people covered by private health insurance was 8.5% growth. The change in Right to Work States was 13.6% growth, while the change in "union-shop" States was 5.9% growth.

According to both the US Bureau of Labor Statistics and the Bureau of Census, from 1991-2001 the percentage change in real value added per production worker was 11.1% growth overall. The change in Right to Work States was 17.1% growth, while the change in "union-shop" states was 8.4% growth.
True that the article above also states there may be other factors, but this seems to be a pretty clear trend here.

The talking heads already say that MTA will withdraw its last-minute demands, and the union will effectively win. Time will tell what kind of long-term impact on the economy of New York.