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December 16, 2002

Why Transit Raises are Cheap for City

The New York City transit workers, despite the real harm threatened to the city by a strike, are getting a lot of support from the public in their demands. See here and here. And for good reason.

Asking for a 6% raise each year is real money, but hardly extravagant in a city that has seen massive escalation in housing prices in recent years.

And for all the breast-beating by the MTA management over their budget, the reality is that the demanded raises are hardly the issue breaking the bank. See this page for the official budget for the New York City Transit system.

So we start with a $4.8 billion annual operating budget. 34,000 employees are covered by the current contract under negotiation. With average salaries around $50,000 per year, a 6% annual increase adds up to about $3000 per worker, or a total of roughly $100 million added to the annual operating budget.

That adds up to something like a 2.1% increase in costs.

It's not that this is not real money, but the MTA is also talking about raising the fare from $1.50 to $2.00, a potential 33% increase in fare revenues. When potential labor cost increases are so much less than proposed fare increases, it's no surprise that the public is skeptical of the MTA's claims that giving a reasonable wage increase to the transit workers is the make-or-break issue for the system's survival.

And it's unreal for the city to risk a strike over what is relatively small change for the workers. Mayor Bloomberg estimated in today's New York Times that a strike "could cost the city up to $350 million a day in police overtime costs and lost business and taxes."

Folks-- that $350 million is THREE TIMES the annual wage demand of the union, pissed away in one day. If the union was making unreasonable demands, it might make sense to take the hit to serve as a lesson for the future, but the transit union is making reasonable demands.

Accepting a reasonable wage hike for the transit workers is far less costly for the city and the MTA than they bill it to be and is infinitely less costly than provoking a strike.

Posted by Nathan at December 16, 2002 11:59 AM

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Right on.

The best estimates I've seen say the TWU's wage demands would cost about $360 million over three years -- half of that in the third year, when the state fisc will (hopefully) be in better shape.

This three-year cost is the same as what the city loses *annually* by not tolling the East River bridges. So when are we going to see the headlines about auto commuters holding the city hostage, etc., by refusing to pay for their use of city infrastructure?

Posted by: JW Mason at December 16, 2002 02:07 PM

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