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.
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?