The Chief
August 6, 2004

Wage Deal Fallout Not Cheap

When the Bloomberg administration reached its first contract deal with District Council 37 in April, it seemed possible that the deal might be too cheap for the city’s good.

From a management standpoint, this notion was probably viewed as absurd: too cheap, like too thin or too rich, is never supposed to be a problem.

But as surely as Mayor Bloomberg’s own wealth has been turned against him on the picket lines, where police and firefighter unions use “billionaire” as an epithet, the basic terms of the DC 37 pact have provided fodder for those unions to claim that their members are being disrespected.

Mr. Bloomberg, taking the criticism personally, has responded that the outrage is coming primarily from union leaders, a claim that gains some credibility from the fact that most of those on the picket lines and stalking him at recent public appearances are delegates of the Patrolmen’s Benevolent Association and the Uniformed Firefighters’ Association.

The Mayor is making a mistake, however, if he believes that their unhappiness is not shared by the rank and file of those unions. The anger in both organizations tends to originate at the grass roots and bubble upward.

One man who did business the PBA during the tenure of Phil Caruso as its president said he got perspective on that matter whenever he attended union membership meetings. As he described it, if Mr. Caruso’s public rhetoric “on a scale of 1 to 10 reached a craziness level of 8, the membership was usually up around 12.”

That is not to say that the PBA’s current salary demands don’t belong in an alternative universe: a two-year pay hike totaling 35 percent is a grandiose demand, to put it mildly, given past bargaining history and the city’s current fiscal condition.

But if going after the Mayor as the union has – as has the UFA – is aimed more at convincing their memberships that they’re fighting for them than it is a serious attempt to influence the public and sway the Mayor, the labor leaders are not alone in their political calculations.

Mr. Bloomberg last week signed a City Council bill granting a $400 tax rebate to homeowners pending final approval in Albany. The rebate offers relief to many of those who were hit with an 18.5-percent property tax hike at the end of 2002 to help balance the city budget.

It, too, happens to be a political choice, just as any item in the budget is. Beyond the political mileage he hopes to gain from it, one advantage of the rebate from the Mayor’s standpoint is that it is a nonrecurring expenditure. That is also why the first year of the DC 37 contract provides a bonus rather than a raise, which would have cost implications beyond the year in which it is granted.

The PBA and UFA and, to a quieter extend, the United Federation of Teachers, are hitting back by taking their case to the public and making themselves a presence and a nuisance at some of Mr. Bloomberg’s appearance.

Elected officials as a group are never happy at this kind of treatment. It figures to be particularly unsettling to Mr. Bloomberg, who never had to worry about such name-calling by employees while running his nonunion financial information company.

He has argued that the unions should be devoting their energy to figuring out ways to generate additional productivity that could be used to fund bigger raises for their members.

The problem is, the baseline of the DC 37 deal is so low that even agreeing to productivity measures will not benefit the holdout unions’ incumbent members unless it also hurts future hires.

And so the drama figures to play out for weeks to come, reaching a crescendo at the Republican National Convention starting Aug. 30. There are all sorts of problems the unions would face if they staged a job action then, and they cannot expect the unions working at Madison Square Garden to honor such an action.

But around about now, the Mayor may be realizing that a “too cheap” wage deal wasn’t an unmixed blessing.