New WMATA union contract is good for riders, taxpayers

Last Thursday, the WMATA Board of Directors voted to ratify a contract with Local 689 of the Amalgamated Transit Union. Not only did the union and WMATA come to an agreement without a bitter arbitration process, but it’s a good deal for riders and taxpayers.

The contract has already been approved by the members of Local 689, which represents most of WMATA’s Metrobus and Metrorail operators and mechanics, and will take effect immediately. It’s the first time in a long time that the union and WMATA agreed on labor terms through negotation, which is unusual because the way WMATA labor agreements are structured leaves few alternatives to arbitration.

WMATA employees are prohibited from striking, so when there is a deadlock in talks, binding arbitration is often the only way to resolve an impasse. The National Capital Interest Arbitration Standards Act is a statute that defines the criteria by which arbitrators use to craft a binding settlement.

In the past, arbitrators often assumed that WMATA could meet the requirements of a settlement by simply increasing fares to raise more money. At the time, WMATA fares were significantly lower, but the agency has increased fares to the point where ridership has actually declined as a result of recent fare increases and the soft economy.

As a result, future fare increases greater than the rate of inflation will have diminishing returns as riders simply decide not to use Metro. This is an important point, because it puts WMATA in a much stronger bargaining position in its negotiations with the ATU than in the past.

The full details of WMATA’s agreement with the ATU have not been released, but we do know that there will be no salary increase in Fiscal Year 2013, followed by a 3% increase in 2014 and 4% increases in 2015 and 2016. Starting in 2015, ATU members will contribute 1% of their salaries to their pension plan, which will rise to 3% in 2016.

If you count pension contributions, workers will get a net 1.85% salary increase over the contract’s 4-year life, according to Richard Sarles, WMATA’s general manager. That’s favorable to both riders and taxpayers, since the average annual inflation rate may actually be higher in the coming years.

More importantly, this agreement sets a precedent not just for ATU Local 689, but for other unions at WMATA to contribute towards their pension plans. It is very rare, even in the public sector, for employees not to contribute towards their pension plans.

The management team at WMATA deserve kudos for negotiating an agreement which is fair by both union members and riders. This agreement will allow Metro to better budget its labor costs in future years and sets a good precedent for other unions.