Stop scapegoating unions: City workers' wages and benefits are not the problem

[This opinion piece appeared in the Daily News on March 28, 2009.]

Amid the current economic uncertainty, myths are circulating about the pension programs and health insurance for municipal workers. These myths not only misrepresent the problems, they stand in the way of finding realistic solutions.

Myth 1: Shared sacrifice must start with unions.

Critics have attacked unions for not quickly agreeing that their members should shoulder some of the burden. They ignore the fact that municipal workers, like all residents, face higher taxes, increased transit fares, higher tuitions, destroyed asset values and reduced public services. In the face of budget cuts, we're working harder with fewer staff to maintain the quality of life for everyone.

Shared sacrifice should start with those most able to contribute. Those who are doing well should reach a little deeper, at least temporarily, for those who are struggling. Municipal workers neither caused the economic crisis, nor did they profit from it. From 2003 to 2007, when nonfinancial private-sector wage growth was 20.1%, average municipal salaries increased by 15.2%, reflecting the local inflation rate of 14.7%.

Myth 2: Unions get gold-plated pensions and health insurance.

As it tightens its belt, the city is arguing for a fifth pension tier with reduced benefits for new employees. While the mayor claims this would save $200 million in the first year, the city's Independent Budget Office estimates the savings at only $35 million. Despite the tendency of critics to inflate pension numbers, in reality the average annual pension payout by NYCERS (the largest system) is $24,437.

In effect, pensions are deferred wages. City workers contribute part of their salaries to fund their pensions, in some years exceeding the amount put in by the city. NYCERS members contribute on average $328 million per year. When stocks rise, the city puts in even less — the city cost for NYCERS averaged just 1.7% of payroll from 1999 to 2004. Of course, the recent asset meltdown caused by Wall Street has increased the city's cost.

Pretending that our health insurance plans are lavish is another way to demonize. A low-cost HMO is the basic benefit, with municipal workers facing myriad co-pays, deductibles and a restrictive panel of providers. If employees want more expensive insurance, then they must pay more. The real problem is private businesses that don't do their fair share, passing the health costs of their employees to the taxpayers.

Myth 3: The unions have offered nothing.

The unions have taken the first step by offering concrete ways to reduce the city's health care costs by a solid $200 million in fiscal year 2010 — through changes in provider networks, use of funds reserved for future benefits and administrative efficiencies that will reduce payments to certain providers. The city's response: escalating threats delivered through the media.

These provisions need to be negotiated in good faith. Public sector contracts are long-term commitments made in return for years of service by dedicated employees who keep the city running. Promises on both sides were kept during boom times; they must be maintained in the lean years.

Wall Street's unraveling is a disgrace. But to use it as an excuse to weaken the social contract between the city and its dedicated workers — who have been New York's backbone, fighting crime, battling fires, caring for the sick, teaching in tough neighborhoods, maintaining parks, handling the city's refuse and doing so much other critical work — would only hurt the very taxpayers the city is supposedly trying to help.

Bottom line: labor unions and their members will help the city solve its problems. Right now, they are doing more with less to keep the city running. But they must not bear an unfair share of the burden. For it is taxpayers who rely every day on the services the city workforce delivers.

Nespoli is Chairperson of the Municipal Labor Coalition and President of the Uniformed Sanitationmen's Association. Weingarten is Co-Chair of the MLC and President of the United Federation of Teachers/American Federation of Teachers.

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