After years of belt-tightening, municipal employees are starting to catch up as they tap into the budget surpluses in most cities and states.
Although their new contracts are not fat - and they don't look anything like the money flowing on Wall Street - the gains are improvements over the give-backs and zero-percent increases of the 1980s.
In some ways, they are a testament to a somewhat renewed vigor in the labor movement. But the better contracts also are a result of the tight job market, in which cities and states are competing against corporations' signing bonuses, profit-sharing, and stock options.
Yesterday, in one of the latest examples of the shift in pay policy, the New York Metropolitan Transportation Authority (MTA) reached a tentative agreement to give its 33,000 contract workers 14.3 percent over three years.
The agreement, which was less than the 27 percent demanded by the workers at the start of negotiations, is a considerable improvement over its last four-year contract in 1986, which included a year with no pay rise.
"A lot of workers, whether it's in the public or private sector are just beginning to catch up," says John Howley, director of public policy for the Service Employees International Union in Washington.
The new contracts are not going to make workers rich, but they will result in a few extra dollars after inflation. This year, locals with the American Federation of State, County and Municipal Employees have reached agreements with four states and three major cities, with pay hikes ranging from 3 to 3.5 percent over three years for Pennsylvania to 3.5 to 4 percent over three years for Columbus, Ohio.
Cheye Calvo, a labor specialist at the National Conference of State Legislatures, says wage increases have pretty much kept up with productivity improvements. But he notes that some states are now trying to find nonwage ways to improve compensation, such as paid parental leave or benefits packages that become income if the total allotment is not used.
"For the most part, I think you can say employer and employee relations have been more congenial," he says.
However, that wouldn't be true in New York where the city went to the courts to prevent the transit workers from walking off the job. Under state law, it's illegal for workers to strike. A judge in Brooklyn said if the workers struck, he would fine each worker $25,000 per day (with the fine doubled each day of a strike) and the union $1 million per day (with the fine doubled for each day of the strike).
Many of the workers said they felt as if Mayor Rudolph Giuliani was holding a gun to their heads with the prospect of the tough sanctions. The leader of the Transport Workers Union, Willie James, warned that the fines could bankrupt the union.
At a 2 a.m. press conference Wednesday, Mr. James called the new contract "fair and just." But later in the day, a dissident faction, called New Directions, planned a march across the Brooklyn Bridge to protest the proposed contract, which still must be ratified by the rank and file.
The contract talks were held at a time when the MTA, the city, and the state are reporting a surplus. The MTA carried over a surplus of $130 million from last year and as of October had a $242 million surplus this year.
But, Gene Russianoff of the Straphangers Campaign says most independent analysts expect the MTA to run a deficit in the future as it increases its debt load to pay for its $16.5 billion in capital projects.
Mr. Russianoff says the MTA will be able to hold the line on the $1.50 fare even though wages represent two-thirds of the MTA's budget.
"They have a lot of resources," he says. "It's easy to blame the workers for a fare hike," he says, but adds that wouldn't be right since an increasing amount of the MTA's budget now goes toward debt service. "That's expected to double in the next five years."
The MTA contract is the first major contract to be renegotiated with New York. At the end of March, the city's contract with 125,000 municipal employees, such as clerical workers, will expire and in November its contract with the teachers union ends.
Last month, the dozens of city unions signed a "compact" pledging to work together. Among their goals: "a substantial increase in real wages" independent of any productivity improvements.
"The workers have sacrificed in the past. The city is flush with money, and that's why we want an increase in wages that will bring us into this boom," says Christopher Policano, a spokesman for District Council 37, which represents groups such as librarians, parks workers, and clerks.
(c) Copyright 1999. The Christian Science Publishing Society