|NY Times November 11, 2013
For de Blasio, Contract Talks Offer Problem
By STEVEN GREENHOUSE
Mayor Michael R. Bloomberg has promised all sorts of assistance to ease
Bill de Blasio’s transition, but the mayor has nonetheless bequeathed
one particularly thorny, potentially explosive issue to his successor:
New York City’s 300,000 municipal workers are angry that their contracts
expired years ago, and they are demanding more than $7 billion in
retroactive pay to make up for their years without a regular raise.
It could prove devilishly difficult for Mr. de Blasio — long a favorite
of the city’s unions — to deliver even a small part of what labor
leaders are demanding because the city faces an anticipated $2 billion
deficit next year. This poses a quandary for Mr. de Blasio, fiscal
experts say — if he gives billions in retroactive pay to the unions,
that means he might have to cut spending on schools, the police or
parks, or face a harder time financing his cherished plans for universal
When Mr. Bloomberg was pushing for low — or no — wage increases in union
negotiations several years ago, labor leaders walked away from the
bargaining, convinced that they would get a better deal from whoever was
elected the next mayor. But now it appears that the union chiefs may
have miscalculated, because after years without a contract, they are
asking Mr. de Blasio for a large amount of retroactive wage increases
that he simply may not be able to pay.
“The municipal unions made a decision that they would rather wait for
the next mayor than try to resolve their contracts with Mayor
Bloomberg,” said Carol Kellermann, president of the Citizens Budget
Commission, a business-backed fiscal watchdog. “O.K., now they have
their new mayor. They’re asking him for a lot of money, no matter how
you slice it, but nobody thinks that amount of money is available.”
Mr. de Blasio faces a huge challenge, she said, because of the workers’
pent-up frustrations as well as the logistical ordeal of negotiating
agreements with the city’s 152 bargaining units, all of them with
The United Federation of Teachers, which has been without a contract
since 2009, asserts its members are owed the same 4 percent raises that
other municipal unions received back in 2008. That would translate into
more than $3 billion in retroactive pay, while the Patrolmen’s
Benevolent Association, which represents 23,000 police officers, is
seeking $500 million in back pay.
“There has to be retroactive pay,” said Harry Nespoli, the president of
the Uniformed Sanitationmen’s Association and chairman of the Municipal
Labor Committee, the umbrella group for municipal unions. “We’ve been
working too long without a contract. Our members have had to use credit
cards to pay their bills.”
A top de Blasio aide declined to comment, saying the mayor-elect would
not negotiate in the news media. During his campaign, Mr. de Blasio
expressed an openness to some degree of back pay for workers, but said
full retroactive raises would not be possible.
“There’s no way in the world to pay out the full amount — that’s
estimated as much as $7 to $8 billion, and that’s impossible to find,”
Mr. de Blasio said in the campaign’s final debate, on Oct. 30. He added,
“If they want to talk about retroactive pay, that’s their right, but
they have to show us the cost savings to go with it.”
Mr. Bloomberg, the Citizens Budget Commission and others see retroactive
pay as a luxury, an unnecessary bonus the city can ill afford. They
maintain that the city’s workers already make a good living even without
raises in recent years. And they point out that some city workers, most
notably teachers, have continued to get annual step raises to recognize
their increased seniority, so their actual take-home pay has increased.
A deputy mayor, Caswell F. Holloway IV, also argued that municipal
workers should be grateful that Mr. Bloomberg, unlike many other mayors,
avoided sizable layoffs, even during the worst recession since the Great
But municipal workers complain that they have gone two, three, four
years without raises, causing their salaries to fall behind inflation,
and they argue that the city has a moral obligation to compensate them
for the years without a raise.
It is no secret that the unions look forward to dealing with Mr. de
Blasio instead of Mr. Bloomberg. “The city just finished another banner
year with a major surplus, and when it comes to what the mayor says
about the teachers’ union and how he treats the workers of New York
City, I find him to be disgusting,” said Michael Mulgrew, president of
the teachers’ union.
But Joshua B. Freeman, a labor historian at City University of New York,
said Mr. de Blasio was less beholden to municipal unions than many might
think. In the Democratic primary for mayor, the only municipal union
that endorsed him was the one representing City University professors.
The largest municipal union, District Council 37, endorsed the mayoral
candidacy of the city comptroller, John C. Liu, while the teachers
backed the candidacy of a former comptroller, William C. Thompson Jr.
Mr. de Blasio had the coveted endorsement of 1199/SEIU, the giant health
care union, but that union does not represent city workers.
“One thing the new mayor has going for him is almost no municipal unions
back him until after the primary,” Mr. Freeman said. “That might give
him a little latitude.”
Mr. de Blasio also might benefit, Mr. Freeman said, because the
mayor-elect has been a longtime friend of labor, giving him more
credibility when he argues that the financial cupboard is bare.
“The union leadership are grown-ups; they understand he can’t give them
everything they want,” Mr. Freeman said. “On the other hand, they expect
things to be different than under Bloomberg.”
The Bloomberg administration notes that the city’s labor costs have
climbed even while the unions have not received regular raises.
Administration officials say the city’s contributions to its pension
funds have soared to $8.2 billion this year, from $1.5 billion in 2002,
while its health care outlays rose to $6.3 billion, from $2.7 billion.
And every percentage point raise for the city’s 300,000 municipal
workers costs about $300 million.
Labor leaders assert that there is plenty of money for retroactive pay
because of what they say are past budget surpluses and
larger-than-anticipated tax revenues. The Bloomberg administration
disputes that. “The notion that there isn’t a deficit or there aren’t
gaps in the budgets — those are real problems,” Mr. Holloway said.
“There’s no magic hidden pot of money.”
Mr. Nespoli said that the municipal unions did not cut off bargaining
with Mr. Bloomberg in the hope of getting a better deal from his
successor. He said the mayor made a take-it-or-leave it offer for a
multiyear pay freeze while asking workers to pay more for health coverage.
“They said they couldn’t offer more than that,” he said. “All the unions
said that’s not negotiating.”
Mr. Holloway disagreed, saying that even when the unions had objections
to the city’s proposals, “there was no willingness to negotiate or make
David L. Gregory, executive director of the Center for Labor and
Employment Law at St. John’s University School of Law, predicted that
Mr. de Blasio would agree to some retroactive pay, although perhaps not
a full loaf. “I don’t think anyone expects it to be paid in a one-time
payment over the next couple of months,” he said. “It will probably be
part of some innovative, multiyear arrangement.”
Thomas Kaplan contributed reporting.