The longstanding alliance between Democratic politicians and government employee unions has come under increasing strain, as I recently noted in a Washington Times op ed. Now the New York City snow cleanup slowdown is adding to that strain.
As state and local governments face large and growing budget shortfalls, the individuals who lead those governments are having to make hard decisions on where to cut spending. And the area with the most room to cut is public employee compensation, which has far outstripped that in the private sector. Thus, simply eliminating waste in other parts of city and state budgets won’t bring the books into balance. As the Manhattan Institute’s Nicole Gelinas notes in City Journal:
Only if state and local politicians identify the true culprit behind the botched post-storm cleanup: the misguided idea that management expertise can overcome the benefits costs that are consuming the city budget.
If money could melt snow, Mayor Bloomberg would be basking in victory over the storm. When he took office in 2002, Gotham spent $1.3 billion annually on the Department of Sanitation. Today, the city spends more than $2.2 billion on “New York’s Strongest.” That increase during Bloomberg’s tenure was almost three and a half times the inflation rate. It follows that we should have a sanitation army well equipped to clean the white stuff up fast. Not quite. Today’s budgeted sanitation force—from supervisors to garbage collectors—is 392 people smaller than it was nine years ago, a 4 percent decline even as population is up. And the department is shrinking further, as Deputy Mayor Stephen Goldsmith knocks 200 people off the rolls to save $21 million by moving supervisors into front-line jobs.
So where has the city’s swelling sanitation budget gone? Not into better services but into workers’ health care and pensions, as well as borrowing to fund infrastructure, which would otherwise be unaffordable because of those sky-high benefits. Taxpayers now spend $144,000 on salary and benefits for each sanitation worker, up from $79,000 nearly a decade ago. Nine years ago, taxpayers contributed about $10.5 million annually to support sanitation pensions; this year, they’ll cost $240 million—a more than twentyfold increase (the final number may be lower, though, as some changes to the pension funds, which push up contribution rates, may not go into effect until next year).
Such generous government employee compensation packages are not only expensive — they are impervious to economic downturns. So, as private businesses retrench or cut back hours, governments must carry on, even as tax revenues fall, until they reach a crisis stage at which draconian measures become necessary. Yet even then, government employee unions are wont to push back against any curbs in compensation, as the New York snow cleanup slowdown painfully shows. Thus, elected officials have no option but to face government unions head on, as Gelinas recommends.
Bloomberg should direct his innovators to focus on where the money is, reducing taxpayers’ commitments to pay future retiree benefits before they consume even more of the budget. He could run a media campaign, for example, to help the public understand that Governor Andrew Cuomo must do wholesale pension change so that new workers, not taxpayers, take more responsibility for their retirements. Further, as union workers would chafe under a serious effort to pare back health benefits in future contracts, the mayor needs an old-fashioned labor-wars veteran to make sure that employees aren’t executing stealthy work slowdowns, as some sanitation workers may have done last week.
That course of action will be difficult, but if carried out effectively, likely would meet widespread support among the general public — from whom government unions are also becoming increasingly disconnected. As Wall Street Journal columnist William McGurn notes:
In theory, of course, organized labor is all about fraternal solidarity. For many years, it is true, private-sector unions supported collective-bargaining rights and better benefits for government workers, while public-employee unions supported the private-sector unions in their opposition to legislation such as the North American Free Trade Agreement in the 1990s.
Suddenly, it’s a different world. In this recession, for example, construction workers are suffering from unemployment levels roughly double the national rate, according to a recent analysis of federal jobs data by the Associated General Contractors of America. They are relearning, the hard way, that without a growing economy, all the labor-friendly laws and regulations in the world won’t keep them working.
What’s more, “blue-collar union workers are beginning to appreciate that the generous pensions and health benefits going to their counterparts in state and local government are coming out of their pockets,” says Steven Malanga, a senior fellow at the Manhattan Institute. “Not only that, they are beginning to understand the dysfunctional relationship between collective bargaining for government employees and their own job prospects.”
It’s no coincidence that states that have barred collective bargaining for government employees, such as Virginia, have found it much easier to keep their finances in order. That’s the least the taxpaying public should expect.