Greater Greater Washington

Budget


What do you want to do about labor costs?

Craig's recent series on WMATA's FY2011 budget examined the range of options available to the General Manager and the Board, from service cuts to fare increases to administrative savings and more.

One element not discussed was reducing the pay and benefits to union members. Craig is in fact affiliated with the union, though his opinions here are his own. However, there's a much bigger reason he didn't talk about it: it's not on the table. But many of you wanted to make this a part of the budget discussion.

The WMATA compact provides for mandatory, binding arbitration to decide labor costs. WMATA and the union recently went through a long arbitration process, and the arbitrator decided to award a 2% one-time lump sum, no increase for FY09 (already completed), and then 3% increases each year for FY10 (in progress), FY11, and FY12. On the other hand, employees have to pay more in health care costs, new employees won't get retiree health benefits, and a few other items that save Metro money.

The WMATA Board can't vote to pay less. They can appeal the arbitrator's award, which they are doing, but they're very unlikely to win.

Michael Perkins wrote,

Their compensation was the subject of years of arbitration, in which both sides had the chance to make their case heard, and the arbiter decided on what the wage increase should be. Metro had the chance to make their case and the arbiter decided.

I agree with Metro's side of the story, though. The arbiter is required to approve something that is in the public interest, and wage increases that lead to 15-20% fare increases and service cuts aren't in the public interest. I don't know what went wrong at the arbitration but it doesn't seem logical. Other local unions have had to accept wage freezes. Most of Metro's operating cost is unionized employee compensation, it's hard to address how much the system costs to operate without at least acknowledging the role union compensation plays.

From the other perspective, Craig noted that from 1997 to 2010, Metro employee pay has generally risen the same as Social Security payments, less than federal civil service workers, and less than the national average pay.

There's definitely value in having bus and train operators, maintenance workers, station agents and others be paid enough to make a reasonable living and to keep good people in their jobs. This isn't flipping burgers, even if you accept that flipping burgers ought to be a crappy job with crappy pay.

It's true that a few Metro employees aren't so good, but those are still by far the exception, and every private company I've worked in had its share of bad apples as well. The fact is that most Metro employees come into contact with the public much more often than in most industries, and where other industries have people that interact with the public, like call center reps, we complain about them as well.

The bottom line is that labor costs are a big driver of costs, and most public employees aren't getting raises, but on the other hand, Metro employees are paying more for health care, aren't totally raking it in, and most of all there's nothing the Board can realistically do.

The union could give some money back as a way of sharing in the costs with riders and jurisdictions. Maybe they could offer to give back a little bit if jurisdictions give more. Craig says, "The union has asked WMATA to sit down and discuss cost saving measures and did so publicly at the Prince George's budget forum back in the fall. WMATA has not responded that I am aware of. I'm not sure why, but I'll speculate that they are relying on their court appeal of the arbitration award which is scheduled for March 15-16."

What would you do if you were running WMATA?

David Alpert is the Founder and Editor-in-Chief of Greater Greater Washington and Greater Greater Education. He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He loves the area which is, in many ways, greater than those others, and wants to see it become even greater. 

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"It's true that a few Metro employees aren't so good, but those are still by far the exception, and every private company I've worked in had its share of bad apples as well."

Really? While it's true that only a few Metro employees have displayed criminal or dangerously incompetent behavior my experience has been that when it comes to customer service surly, rude and generally unhelpful Metro employees are the rule rather than the exception.

by Jacob on Mar 3, 2010 3:02 pm • linkreport

"What would you do if you were running WMATA?"

1. Significant Service Cuts. Just as the airlines had to. You can't run a transportation system in a recession at the same capacity you had when the economy was booming.

The initial proposal of $33 million in cuts is way too modest.

Sunday rail ridership is about 28% of average weekday, in New York it's around 45%. Later openings, more station closings, and longer headways on Sunday are a good place to start.

2. Eliminate overtime. $62 million for WMATA in FY2009. One benefit of cutting service. Also, much better for safety not to have drivers racking up big hours. Scaling back weekend service would help too, so drivers are well rested. 10 am or later opening on Sunday would help with this.

3. Eliminate practice of accruing pension benefits for overtime worked. This allows workers to retire with annual pension payments higher than their base salaries, pushing up annual contributions.

4. All increases paid through fares, not tax contributions. Asking taxpayers to fund poorly utilized trains and buses is asking for trouble politically.

by Kyle on Mar 3, 2010 3:09 pm • linkreport

@ Kyle: Would you suggest any DOT to close roads when the economy (and hence tax revenue) is down? Which interstate would you close? I-66, I-295, I-395, I-495, I-270 or I-495?

Would you suggest not plowing roads when DOT budgets are drained by earlier snow fall?

by Jasper on Mar 3, 2010 3:34 pm • linkreport

1. Significant Service Cuts. Just as the airlines had to. You can't run a transportation system in a recession at the same capacity you had when the economy was booming.

BUT TRANSIT IS NOT A BUSINESS. IT'S A PUBLIC SERVICE THAT PROVIDES ECONOMIC DEVELOPMENT, QUALITY OF LIFE, AND ENVIRONMENTAL BENEFITS TO THE WHOLE COMMUNITY. SHOULD WE STOP REPAIRING ROADS DURING A RECESSION?

The initial proposal of $33 million in cuts is way too modest.

Sunday rail ridership is about 28% of average weekday, in New York it's around 45%. Later openings, more station closings, and longer headways on Sunday are a good place to start.

2. Eliminate overtime. $62 million for WMATA in FY2009. One benefit of cutting service. Also, much better for safety not to have drivers racking up big hours. Scaling back weekend service would help too, so drivers are well rested. 10 am or later opening on Sunday would help with this.

THIS COULD WORK, BUT ISN'T METRO REQUIRED TO PAY OVERTIME UNDER FEDERAL LABOR LAW? THEY COULD JUST NOT APPROVE OT, WHICH WOULD MEAN HIRING MORE PEOPLE. BUT PERHAPS THIS WOULD BE A COST SAVER.

3. Eliminate practice of accruing pension benefits for overtime worked. This allows workers to retire with annual pension payments higher than their base salaries, pushing up annual contributions.

THIS SEEMS PRETTY REASONABLE.

4. All increases paid through fares, not tax contributions. Asking taxpayers to fund poorly utilized trains and buses is asking for trouble politically.

I STRONGLY DISAGREE WITH THIS POINT. THE ENTIRE COMMUNITY BENEFITS FROM METRO. IT REDUCES TRAFFIC, SPURS ECONOMIC GROWTH, INCREASES TRAVEL OPTIONS FOR THE POOR AND ELDERLY. FARES SHOULD CERTAINLY GO UP, BUT TAXPAYER CONTRIBUTIONS SHOULD INCREASE ALSO DURING THE RECESSION. AGAIN, METRO IS A PUBLIC SERVICE LIKE ROADS, FIRE DEPARTMENTS, WATER MAINS, ETC. EVEN IF ONE DOES NOT USE THEM DIRECTLY, ALL BENEFIT FROM THEM.

by K on Mar 3, 2010 3:37 pm • linkreport

@Kyle

1. As others have said, transit is not a business. It provides benefits beyond transportation from one place to another. We don't just close infrastructure when we have budget crises do we? From this suggestion it seems to me that you don't use transit at all, or if you do it's at 8:30AM and 5:30PM on weekdays.

2. If you want to get rid of overtime, you have to hire more workers. Someone has to work those hours. Which is cheaper, another full-time employee with benefits, or overtime? Also, 10AM on Sunday? People do work on Sunday, and people do things on Sunday before 10AM. This suggestion seems to support my assertion that you don't use transit.

3. Is pretty reasonable. The reason this exists is to try to get the transit agency to hire enough workers to do the work instead of working existing employees as much as possible and paying overtime.

4. This seals it. The transit system is "poorly utilized"? I guess so, because you sure as hell don't ride it! The system improves conditions for those who ride it and those who don't. http://www.publictransportation.org/pdf/reports/how_transit_benefits.pdf

by MLD on Mar 3, 2010 3:54 pm • linkreport

"Would you suggest any DOT to close roads when the economy"

VDOT's laid off over 10% of its workforce since the recession began.

"Would you suggest not plowing roads"

I don't need to suggest it, VDOT's already doing it, my road never gets plowed.

VDOT's annual $79 million snow removal budget, which covers all of Virginia, is about 1/14th of WMATA's operating budget.

"METRO IS A PUBLIC SERVICE LIKE ROADS, FIRE DEPARTMENTS"

all of which are being cut drastically now, if we cut metro's budget over 10% like VDOT's been we'd need massive service cuts

because of low Sunday ridership, and the double pay for WMATA drivers on Sunday, I'd really cut back service that day, plus this would allow highest possible level of rail and bus service during the week when roads are more congested

by Kyle on Mar 3, 2010 3:55 pm • linkreport

Just a quick look says part of the budget process is the sudden increase in pension contributions b/c of a weak stock market -- 24 million more. Is that something that can be negotiated so it can be paid over a longer period -- slightly different than recalculating the value.

But this pretty much confirms a death spiral: can't cut labor costs because of various laws, cut service and raise fares instead, watch your revenue drop more, rinse and repeat.

by charlie on Mar 3, 2010 3:59 pm • linkreport

I hate to break it to you, but Kyle is right.

Metro isn't a business, which is its problem. It should have to run like one, rather than the free-for-all orgy of "whatever" that it is now. There are a couple public transit systems, albeit smaller than Metro that are run like businesses, and actually maintain their budgets and operational duties doing so.

This hooey about the public should share the expense needs to stop.

The VA and MD capital beltways carry more people per day than do metro, carry more commerce and are arguably more important than the Metro to the Region at large, yet you would scream bloody murder if you as a non-driving DC tax payer got a special "VA Beltway Improvement Tax". Why should people of the DC Metro who are well beyond the bounds of Metro and who have never, nor will likely ever have reason to use it, or have theor lives affected by it, pay for it?

The people who use it, need to pay for it. That includes me, and I think it is ridiculous that a system whose ridership has a median income of $102K/yr can't pay the fares required to sustain the system, especially when a full 30% of those daily riders don't even pay for their fares, instead getting Uncle Sam to pay for them through the work Transit Subsidy.

Sunday traffic is less than a 3rd of weekly traffic, service needs to be cut accordingly.

The Local Jurisdictional contributions need to be fixed where they are and indexed to inflation moving forward.

Fares, all fares (bus included) need to be increased to the point where the system pays for itself, immediately.

Including inflation, Bus fares haven't increased in 25 years, Rail fares in 22. In fact it is CHEAPER to ride either the Bus or Rail today than it was then, that despite everything else in the world increasing at inflation +.

by nookie on Mar 3, 2010 4:13 pm • linkreport

@nookie

I love it when people want to talk about all these other transit systems that are doing great and are self sustaining. Of course, you never seem to mention who or where they are. Please - enlighten us. We will be happy to explain why those systems can operate the way they do and why none of the reasons they can apply to Metro.

by MLD on Mar 3, 2010 4:18 pm • linkreport

I think its been noted elsewhere that Kyle is incorrect on the Sunday issue. There is no special premium pay at WMATA for Sunday work much less double-time. Bus operators, train operators, maintenance workers, clerical workers or whoever who are scheduled off on Tuesdays and Wednesdays, for example, get straight time pay on Saturdays and Sundays.

by kreeggo on Mar 3, 2010 4:30 pm • linkreport

@nookie; yes if you separate the rail system, cut out metroaccess and hike fares about 30% I think MetroRail could be profitable.

I don't see the bus system ever being profitable.

Delhi Metro is running a profit right now. Of course their system only cost about a billion dollars to get to the same size as Metrorail -- and their fares are 10cents a ride.

I believe some of the Korean systems are also making profits.

by charlie on Mar 3, 2010 4:34 pm • linkreport

The Texas Transportation Institute, in its annual-ish mobility studies, tries to compute, among other things, the amount of time saved by motorists because of the existence of public transit, by imaging the sum total of extra delays from traffic congestion that the region would face if the transit were not in place. This is, obviously, a hard calculation, and they've fiddled with their methodology over the years, but the result is pretty consistent that the value (multiplying time saved by some hourly rate) to motorists is the same order of magnitude as the entire operating budget of Metro.

In other words, this one aspect of the value that Metro provides to one segment of non-riders is equal to perhaps half of Metro's operating budget and roughly all the current governmental support. That's before accounting for, e.g., environmental and economic development benefits.

Government support via taxes is a reasonable way to distribute the costs of something with such a wide benefit to as large a fraction of beneficiaries as possible. And the Texas Transportation Institute calculations shows that government support of Metro is a bargain.

by thm on Mar 3, 2010 4:37 pm • linkreport

I wish they could fire everyone and start over, sans union. That would be Metro's answer. Hire people back at MARKET WAGES, not inflated Union ones that pay six figures (literally) for mediocrity.

by Prose on Mar 3, 2010 4:39 pm • linkreport

1)Metro should eliminate its Civil Rights Division.

2)Scrap diversity awareness classes.

3)Eliminate the numerous training courses available to employees that aren't directly related to the tasks they perform at Metro.

4)I don't know if Transit Police are provided for in the operations budget or not. If they are then they should be funded from a seperate budget paid entirely by the states, city, and federal govt. Maybe someone here can shed some light on how that works.

Anyway, those are just a few things that immediately come to mind...

K

by Kaleel on Mar 3, 2010 4:40 pm • linkreport

Short term, there's not a lot Metro can do to curb labor costs. Instead, WMATA should push for better labor accountability. If this is the workforce we've got, then we need to make sure that customer service and safety improves a great deal. If WMATA can't lower labor costs, perhaps they can change some of the mechanisms for dismissing bad employees, etc.

Long term, I'd like to see Metro look into automation for the rail system. With Metro likely to need to install a new or substantially upgraded ATC system, it would make sense to study the prospects for automation of this low-hanging fruit.

This certainly wouldn't mean the end of the union - buses won't drive themselves, even in trains can - but it certainly could represent a significant check on labor costs while also enabling a substantial increase in service levels.

Long term, from a policy perspective, it looks like it will be necessary to eventually revisit the WMATA compact to address long-term funding sources, as well as labor costs. That, more or less, would be like an airline going into bankruptcy, and the union will likely have to make some serious concessions, too.

by Alex B. on Mar 3, 2010 4:51 pm • linkreport

@thm

the TTI studies are based mostly on weekday congestion, the benefits on Sunday are nowhere near as great

Sunday cuts could save a lot, especially when we have days like this past Sunday, with just 188,000 rail riders, less than a quarter of the 761,000 who rode last Wednesday

by Kyle on Mar 3, 2010 4:52 pm • linkreport

While it's true WMATA's labor costs are not currently on the table, that situation has to soon change. Change is necessary because continuing the status quo is no longer fiscally maintainable. Unless government funding contributions are increased substantially, WMATA, primarily due to rapidly rising personnel costs, will be facing rising tides of red ink in FY2012, 2013 and beyond.

To alleviate the growing crisis, a three pronged effort should be undertaken. First, strong appeals must be made to local governments, and to the feds as well, for increased levels of funding. If the economy continues to steadily improve, the present stresses on local budgets should recede to some extent, making larger contributions to WMATA more financially feasible.

At the same time, WMATA management through the Board should push for modifications to the Charter to allow for more cost management flexibility in times of fiscal hardship. When economic hard times strike, as they are wont to do once or twice every decade, WMATA needs more budget tools to be able to respond appropriately. It seems prudent to establish new compensation rules that take hold during officially sanctioned economic downturns. These rules, for instance, could curtail or limit pay raises for both union employees and non-union. In addition, during arbitration, a revised set of ruling guidelines that take precedence over standard provisions could automatically click in.

Finally, rising employee compensation is a normal, expected expense, but what's really causing WMATA budgeters stress are ballooning retirement costs. Many municipal institutions, as well as untold numbers of private corporations, have recently realized that their pension plans as currently structured are no longer affordable. It's a sad fact of reality, but these plans must be modified, and many organizations are doing just that. Because people are often living longer, but continue to retire from their workplaces at the same age that they did 30 or 40 years ago, pension costs have skewed off the charts, and are out-of-control for all but the most financially flush institutions. Pension reform is an pressing issue that WMATA management cannot neglect; the situation must be addressed now, not next year or the year thereafter, but right now.

by Anon on Mar 3, 2010 4:56 pm • linkreport

I assume this post was a tongue-in-cheek effort to redirect the cranks from other, more thoughtful posts and topics?

by Michael on Mar 3, 2010 4:57 pm • linkreport

Metro should lower fares on Sunday to increase ridership.

DC should charge for on street parking on Sunday.

by MCS on Mar 3, 2010 5:01 pm • linkreport

Kaleel,
How is your point 4 any different from current WMATA funding?

As for the other trolls saying service needs to be cut... I hope you're happy that you're trying to screw me. The Metro is a HUGE chunk of my life and many others in my age range. I don't just use it for communting. I also use it to go play, for socializing, and to get to advocacy events. How'd you like to be 28, single, and lose your ability to go out at night and socialize? Or, not be able to participate in your community political process? That's just boorish and cold.

I can't begin to say how disappointing it is to see that there are so many uncreative folks who could care less about the nuances and implications of their painting with a broad brush.

Has it ever occured to you knuckle-draggers that cutting the Metro would actually end up costing more money in lost taxes due to lost economic activity due to lost mobility than what would be saved by the cuts? Probably not, because that's a three step thought process. Why have a multi-step thought process when you can just scream "cut" without considering what that actually means. Then you can just get up on your own pedestal and talk about how everyone else is wrong and just "doesn't get it."

That's just unproductive and intellectually incurious. I wish we had the ability to run an experiment where we just cut service vs. another run where we make very nuanced strucutural adjustments to close the budget. Unfortunately we don't have that luxury and the real world is not the place for the incurious to run their little experiments.

by Cavan on Mar 3, 2010 5:01 pm • linkreport

Trolls and Counter-Trolls. Its like a battlefield in here.

Also, Train automation would be nice, but a computer would close the doors on me just like Red Line operators at Gallery Place do now.

Kyle is a deep suburbanite who has multiple cars, by the nature of his comments so far.

by Mike on Mar 3, 2010 5:12 pm • linkreport

It would be interesting if Metro charged $1 for all trips on Sunday. I wonder if more revenue would be generated. I only drive because its free parking downtown.

by MCS on Mar 3, 2010 5:16 pm • linkreport

Train automation works. Look at Vancouver's SkyTrain and how it handled large crowds with the Olympics.

It's something that WMATA needs to investigate, particularly with the need for significant upgrades to the ATC system. The big costs for automation are already taken care of (grade separation, ATC and ATO, etc).

by Alex B. on Mar 3, 2010 5:16 pm • linkreport

@Cavan: Suggestions: you can get a bike, you can frequent nightlife in your neighborhood, you can carpool, you can take a cab.

Some of us "trolls" don't find it boorish that government shouldn't have to pay for a 28 year old's social life.

by mch on Mar 3, 2010 6:12 pm • linkreport

I am absolutely in favor of automated trains like Vancouvers. Did anyone else read the article that discussed the portion of a trains costs at night come from the human operator, followed by the cost of the electricity I think? This means by eliminating the humans (freedom from the union! *sigh* I know, I'm dreaming.) night trains could be run more frequently at the same or less cost.

I doubt this is possible but all the old dead backward thinking wood in WMATA/Metro Board/Whatever needs to be chucked out the window. They are holding everything back and making all these difficult decisions harder and drag on indefinitely while we, the public, scream at them more.

by james on Mar 3, 2010 6:22 pm • linkreport

"Some of us "trolls" don't find it boorish that government shouldn't have to pay for a 28 year old's social life."

We already are paying for it, he can take metro til 3 in the morning. If we cut Sunday post-sunrise service as we need to, this wouldn't be impacted.

But it's much easier to complain and call someone a troll than to have an adult discussion about ridership and budgeting.

by Kyle on Mar 3, 2010 6:32 pm • linkreport

The suburbs have found a way to cut costs: privatization. Fairfax County contracts with at least two companies to run its buses. The competition for the contracts reduces the cost of running buses, thereby reducing the County's subsidy.

In London, England, some operators have gone so far as to paint the buses different colors. That didn't go down well: the British love red.

by Chuck Coleman on Mar 3, 2010 7:30 pm • linkreport

The difference between poorly-performing employees at Metro and those at a private firm is that the private firm can simply fire the employee for poor performance. At Metro, you'd have to go through a union negotiation, arbitration, and all this other non-sense that drags on forever. It's sad that some unions have changed from their honorable role of protecting workers from abusive companies and have transformed into a tool for workers to abuse companies.

Why can't Metro have performance based pay? You do well, you get a raise. You do poorly, you don't get a raise. You consistently do poorly, you get fired. The Mafia-like structure within Metro won't allow itself to be dismantled. It needs to be forcefully removed.

My suggestion: shut down Metro for a week. Fire everyone below GM and have everyone re-apply if they want to. Hire people that do their jobs and hire them at market wages. Meanwhile, the complete bedlam that will result from Metro shutting down will convince the local governments to get their act together and start funding Metro properly. The week without anyone on payroll should also do wonders for closing the existing budget gap. At least the Taxi mafia would benefit...

by Teo on Mar 3, 2010 8:26 pm • linkreport

Thanks GGW for asking us to post on the labor cost issue. Those with the best knowledge on this issue are probably WMATA employees themselves.

Anyway, here goes
1. End pensions in favor of superannuation or similar 401K like plan. Pensions belong to a labor market model of lifetime employment, short post-retirement lifespan, and continuous growth in the business: i.e. one that ended in the 1980s. It hurts WMATA because it forces us (taxpayers etc) to pay labor costs for people who no longer work for WMATA, and forces us to pay more when the economy is bad (i.e. when we can least afford it). Pensions hurts current workers because the outlays to former workers decreases the $ available to them, and reduces their own workforce mobility.

2. Make it easier to fire poorly performing workers. This (a) should improve productivity and (b) make it easier to hire new people.

3. Renegotiate some of the contracts. For example, seniority in bus drivers translates not only into higher salaries, but also the chance to pick your route: the result is that newbies drive the worst routes. This is bad for attracting new drivers, and for the safety and performance of WMATA. The best operators should be doing the toughest jobs, because they have the most experience and are paid more.

4. Prioritize, and end or subcontract non-core jobs, such as in HR and marketing. Better signage and better performing infrastructure can replace customer service jobs. Subcontract escalator repair. Remove short escalators from service.

5. Renegotiate everything. The median compensation for a bus driver in DC is (according to salary.com) a little more than half the average WMATA employee compensation. Not an exact comparison, but suggests that WMATA is overpaying. I am not saying they should halve pay, but I am saying that a salary reduction should not be off the table.

by SJE on Mar 3, 2010 9:34 pm • linkreport

Just for comparisons with other big employers in DC....

1. Military contractors have historically been spared budget cuts and allowed to get away with huge cost overruns. Not anymore. The Obama administration killed the F-22, is considering killing the F-35, killed some of the missile defense plans, and said no more going to the moon.

2. Lawyers. Since 2008, a number of venerable law firms closed shop, and unemployment among lawyers and paralegals is at unprecedented levels. At my own employer, they
(a) cut most benefits
(b) banned overtime for hourly workers
(c) cut salaries more than 10% for salaried workers
(d) fired people at all levels.
People were unhappy, but not as unhappy as those who lost their jobs.

3. Teachers. DC laid off a bunch of people. Almost unheard of.

No one is immune.

by SJE on Mar 3, 2010 10:22 pm • linkreport

There's one major factual issue with the original article: while wages have been fairly under control (2.8% avg increase per year from 1997 to 2008), benefits have soared at an average increase of 6.8% per year over the same period. These figures are from WMATA's financial reports. Further, benefit payments have been increasing substantially faster than the average rates for government workers according to Labor's statistics.

When a full 70.8% of costs (excluding depreciation) were due to personnel, the best place to cut costs is obvious. There's no question in my mind that labor costs HAVE to be part of any budgetary realignment if you want to get to a sustainable fiscal future.

by gcato on Mar 4, 2010 12:45 am • linkreport

Thanks for that fact gcato. Another fact that was neglected by Craig Simpson. It is unfortunate that in a 9 part series on the WMATA budget, Craig avoided serious discussion of 70.8% of the budget, and neglected to mention that he represents the union. It took another GGW writer to bring up the labor cost issue, despite repeated calls in the comments.

I believe that Craig's arguments should be evaluated on the merits, and he did have some good ideas. Failing to state his interest up front, and avoiding or papering over important facts is, to my mind, a disservice to GGW and to his readers. It also does a disservice to his arguments and to his union: I do not feel that I can take at face value anything he says.

by SJE on Mar 4, 2010 8:49 am • linkreport

@SJE, you can't fault Craig for not bringing up labor in a discussion about how to close the budget gap for the next fiscal year. That solution will have to be in place in a matter of months, and it's simply impossible for WMATA to make any realistic dent in labor costs within that timeframe.

Labor is a long term issue for WMATA, and Craig has been talking about the short term budget gap. They present two related, yet different, sets of problems and it's important not to conflate the two.

by Alex B. on Mar 4, 2010 8:56 am • linkreport

""Some of us "trolls" don't find it boorish that government shouldn't have to pay for a 28 year old's social life."
We already are paying for it, he can take metro til 3 in the morning. If we cut Sunday post-sunrise service as we need to, this wouldn't be impacted.

Yes, much better to pay, in the form of highway subsidies, higher insurance premiums,higher health care costs (emergency room, etc.), lost lives and injury for the social life of a 28 year old suburbanite in Prince William or Fairfax who drives home drunk. Oh yeah, but nobody driving around Fairfax or Prince William at 3 am Sunday is drunk. That's the land of wholesome, hard working 28 year olds with no social life who never drink. All the drunks are in DC on the Metro at that hour.....

by rg on Mar 4, 2010 9:09 am • linkreport

@Alex B.
The fact remains that the labor costs have been a major cause of the problem that Metro finds itself in. On Craig's first article, I asked what the union was planning on doing to help Metro through this. Now, 10 articles later, still not a peep. It would be great if he could address this issue, even in a personal capacity, but I doubt he would dare say anything other than "we need higher wages"

by Teo on Mar 4, 2010 9:37 am • linkreport

Alex, I disagree, you can easily fault Craig for his omission.

1. Labor costs are a current AND future fiscal problem. For comparison, most private employers made adjustments in labor costs very soon after the financial crisis hit, and state and local governments made noticable cut back backs last year.

2. Even if a long term issue, Metro didn't suddenly find itself short of money, like some local governments. It has been in financial problems for years. Labor has been Metro's biggest expense for years. When do we get to talk about it? As noted in point 1, other regional employers that have not had the long term budget problems you find at Metro have nevertheless found it OK to look at labor costs.

3. Lets say that that you are correct, and that labor costs cannot be controlled now. Well, Craig could have presented us with the reasons he thinks this is the case. Instead, we dance around the elephant in the room. We get divisive and shameful pieces about how cut backs hurt the poor and minorities, why the Feds should pay more, etc. Nothing about labor costs. Indeed, Craig could have said "hey, I represent ATU and so I am not going to touch labor issues, but I will give you my thoughts on all the other ways Metro could save money." That would have been more honest.

I am not the lone nut complaining about these issues: lots of GGW readers are saying the same things.

by SJE on Mar 4, 2010 9:39 am • linkreport

@Teo,

Of course labor costs are an issue - but they cannot be reduced for the next fiscal year. Period.

It's a systemic problem that requires a systemic solution, and that's not the type of thing you can bang out in a couple of months. Same goes for a dedicated revenue source - you're not going to be able to pass, say, a regional gas tax increase to be ready for the next fiscal year. These are systemic issues that require long-term fixes.

Fare increases and service cuts are short term 'fixes' for short term issues. This really shouldn't be too hard of a distinction to communicate.

by Alex B. on Mar 4, 2010 9:42 am • linkreport

@SJE,

I don't disagree with the tone, I think Craig's affiliation should have been more explicitly noted.

After considering the substance of his arguments, however, it doesn't change my opinion. You're right that Metro has been facing this issue for a long time now, but they haven't ever been able to address it with a systemic solution.

Do you disagree? Do you know of a realistic mechanism to reduce labor costs before the start of the next fiscal year? I'd love to hear it.

A systemic solution will need to be a much larger process than just closing a budget gap. It will likely need to involve revisiting the WMATA interstate compact.

by Alex B. on Mar 4, 2010 9:50 am • linkreport

Alex: labor costs should be an issue now, and should be an issue going forward. They won't close the gap immediately, but they can start the process. WMATA jobs are not a sacred right and labor costs have been put in the "too hard" basket for too long.

I disagree with your long v short term distinction. Short term is me borrowing $20 because I left my wallet at home. If I ask for $20 every week, and don't pay it back, its a long term problem. For WMATA, short term would be a sudden cost such as the snow storms. The current problems are just part of the same long term failure to both control costs and get more reliable funding. Until WMATA can control costs, the regional sources of funding should not have to commit to more cash. Look at it another way: if Virginia just laid off a bunch of its own transportation people, do you think it will just cough up the money for Metro without asking for staff cuts?

I am not going to post on this site for the rest of the day, as I do actually have a job to get to. No, its not union busting.

by SJE on Mar 4, 2010 10:05 am • linkreport

@SJE, it's not about short term or long term problems, it's about short term v. long term solutions. This labor issue is not something you can just chip away at from budget gap to budget gap, it's a systemic issue. Same thing applies to dedicated funding sources and increased jurisdictional contributions.

The remedies available to WMATA right now to close the budget gap simply cannot address the larger, long term issues of labor costs and dedicated revenue. It's not that these conversations are "too hard," nor do I think anyone would disagree that such a conversation about long-term, systemic issues needs to happen. Even if they started today, that's still not going to solve tomorrow's budget gap.

by Alex B. on Mar 4, 2010 10:30 am • linkreport

The people who use it, need to pay for it..

Can people without a car opt out of paying taxes for roads? No they can't. Because they still benefit from them.

The point of transportation infrastructure is that everybody benefits. That's why the government - we you, the people - maintains it. The infrastructure network consists of many elements. It depends on geography and usership what is efficient. Roads and bridges will never get you to Europe and air travel would perform terrible for commuter. Every element has its scope and benefits. Yet everybody benefits. Therefore, everybody needs to pay.

If Hawaiians want their federal government to function, they want to have metro operate decently. If metro closed, that 40% of federal employees that uses metro to come to work would end up on the local roads increasing the local gridlock. Likewise, we here in DC benefit from I-HI1 to Pearl Harbor, if we want the military to defend the Hawaiians Islands.

Quite frankly, I'd love to see metro close its doors for a week, and see the mayhem on the roads. Fuming "regulars" cursing out the poor driving habits of "newbies". I so wish metro could go on strike. Either from the board or the employee level. Laugh at it all you want, but cities in Europe know the value of their transit network from the couple of weeks every year employees go on strike.

@ kyle: I don't need to suggest it, VDOT's already doing it, my road never gets plowed.

Well, then it's not a state road, is it? "My" road was also not plowed by VDOT. "My" HOA did. And "I" paid for it. What's your point? Your point - as I understood it - is that metro should stop operating if it's at the end of it's money. I just projected that on the operation of DOTs. It does not work that way. The fact that you don't live on a state route does not change that. Plenty of people don't. They still have soar backs.

by Jasper on Mar 4, 2010 10:31 am • linkreport

I see no reason why WMATA employees or any other "public servants" should receive far greater pay and benefits than their private sector counterparts. I say, privatize WMATA or at least decertify their union.

by John David Galt on Mar 4, 2010 11:52 am • linkreport

Looks like I'm in a distinct minority here, but I want WMATA employees to be paid a decent wage and to receive decent benefits, and I want taxpayers, both local and federal, to shell out via steeply progressive income taxes so that can happen.

And I want all this because I value public transit as a public good and want public transit to thrive.

by Matt W on Mar 4, 2010 12:23 pm • linkreport

@Matt W,

The problem is that many of WMATA's labor issues (particularly those dealing with pensions and retirement) are the product of larger macro changes in the US that are beyond the scope of Metro's control.

by Alex B. on Mar 4, 2010 12:26 pm • linkreport

AlexB: we are ALL affected by larger macro changes. We all have to adapt or die.

As to my suggestions: I have already made some suggestions. My biggest suggestion is to put labor on the table first: put their own house in order before asking for more money.

I also do not expect any of these changes to solve the immediate budget shortfall, but I am pretty sure that the regional governments will be more willing to help with funding if they see ATU as a partner in reform, rather than a barrier.

Personally, I am not per se oppossed to unions, but admit that I see them as barriers to needed change. I grew up in a city where the unions were very strong, and were barriers to reform despite clear competition. They kept their power through the picket line and funnelling money to politicians. Almost all of those union jobs are gone: they killed those industries. The unions ended up being more harmful to the working man.

by SJE on Mar 4, 2010 4:34 pm • linkreport

Operating transport is a labor-intensive industries: it requires drivers, mechanics, etc. Setting aside union-created increased labor costs, labor is going to become increasingly costly as incomes increase. The only way around this is to substitute capital for labor. This is already done with articulated buses: one driver does the work of 1-1/4+ drivers. Curitiba, Brazil uses biarticulated buses which double the drivers' productivity relative to regular buses.

How you do this in an urban transportation system is difficult. You can operate longer subway trains at longer intervals. To some extent, you can increase bus sizes. You can increase bus utilization by putting deadheaded buses into revenue service (i.e., reverse commute). Streetcars and other new rail can increase productivity dramatically, with the costs of construction increasing also. Hiring more part-time drivers increases productivity, as they don't spend idle time on the payroll. You can increase ridership on existing lines. You can institute improvements to speed mass transit vehicles.

Still, even after you wring every productivity increase out of the system, labor costs will continue to rise. Maybe some creative, automated solutions can help.

by Chuck Coleman on Mar 4, 2010 9:58 pm • linkreport

Chuck: I agree with your analysis, but not with your ultimate conclusion. Labor costs per unit worker would be expected to rise but this does not mean that total costs would always rise unless you assume that total staff cannot decrease.

by SJE on Mar 5, 2010 8:49 am • linkreport

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