The New York Times

August 19, 2003

Bloomberg and City Unions Draw the Lines, Far Apart


John V. Lindsay's tenure was defined by strikes, the first one hitting only hours after he was sworn in. Edward I. Koch and Rudolph W. Giuliani started off talking tough, but ended up awarding hefty raises to municipal workers that left the city in a bind when recessions hit. David N. Dinkins squeezed some of the same unions that had helped elect him and then never got a chance to serve a second term.

The success or failure of a New York City mayor, or at least his reputation as a leader or wimp, hinges in part on his finesse in handling labor negotiations. Now it is Michael R. Bloomberg's turn.

In hard times especially, the outcome of contract talks can mean the difference between a clean city and a filthy city, a happy work force and a foot-dragging work force. It can mean stability for taxpayers or a heavier burden. Next year it could even mean tax relief.

For the last year, Mr. Bloomberg's attention was focused on the city's budget deficit. But meanwhile, contracts for all but 7,500 of the city's 286,000 full- and part-time employees -- including New York City's teachers and principals, police officers and firefighters, correction officers and sanitation workers -- have expired.

Mr. Bloomberg has kicked off the negotiations with an aggressive opening line: there will be no wage increases, unless the unions agree to changes in work rules or benefits that save enough money to pay for the raises.

''Getting real and sustained productivity out of the labor force will unlock the key to wage increase discussions,'' said Marc V. Shaw, the deputy mayor for operations, who along with James F. Hanley, the city's labor commissioner, is leading the negotiation effort.

So far, however, that position has led to no substantive developments in the negotiations, only animosity and recalcitrance.

''You want me to turn this entire municipal work force into a slave organization for you,'' said Norman Seabrook, president of the Correction Officers' Benevolent Association, which has 9,000 members.

''I don't think so. I don't think so,'' he said.

As if to prove the point, Mr. Seabrook and his union last week declared a full-scale effort to oust Martin F. Horn, Mr. Bloomberg's handpicked correction commissioner. The declaration has had little real impact, but it sets the stage for the contentiousness likely to come.

Mr. Bloomberg and his staff say they are not bluffing, and they will share the same message with other union leaders this fall as they begin or restart stalled contract talks.

Their argument so far has been that the city needs a low-cost labor pact to help it continue on its path toward fiscal stability. And for Mr. Bloomberg, there is the issue of making good on a promise to roll back nearly $1 billion worth of increases in the sales and income taxes that were enacted in the last year as a temporary way to finance city operations.

Many ideas are floating around about how New York City could get through this round of labor contracts without breaking the bank, but so far there is no agreement on any of them.

Police officers could work more, albeit slightly shorter, days allowing the city to cover the required shifts at a lower cost, Mr. Shaw and Mr. Hanley said. The city's 80,000 teachers could be pressed to give up sabbaticals. Sanitation workers could be asked to pick up more trash.

Citywide, municipal workers could be required to contribute toward the cost of their health insurance, saving at least $200 million annually. The Bloomberg administration proposed converting at least one of the city's holidays for employees to an unpaid day off.

The Independent Budget Office and Citizens Budget Commission have offered their own additional money-saving ideas, such as extending the average workweek for most civilian employees to 40 hours a week, from 35 or 37.5 hours, saving an estimated $498 million annually.

By comparison, simply offering wage increases to city workers at the rate of inflation would cost $1.2 billion in the next fiscal year.

Union presidents scoff at any suggestion that their members should have to give up compensation in one form simply to get a cost-of-living raise. They have offered alternative ways to cut spending, such as replacing high-priced computer consultants with city employees and hiring civilians to do desk jobs now handled by police officers. If the Bloomberg administration accepts these ideas, they say, it could offer raises without demanding concessions from union members.

''If the definition of productivity is how you make the quality of the services better, then I think a lot of unions would be interested in engaging in that discussion,'' said Randi Weingarten, president of the United Federation of Teachers and chairwoman of the Municipal Labor Committee.

''If the definition is simply, 'How do you cut costs?' then you'll have a lot of reluctance,'' she said.

If history is a reliable guide, few of these money-saving ideas will get beyond the negotiating table. Over the last three decades, mayors have repeatedly called for concessions by the unions or major changes in work rules before agreeing to contract settlements. It was so with Mr. Koch in June 1978, Mr. Dinkins in January 1993 and Mr. Giuliani in April 2001. By and large, each returned to the precedent of across-the-board raises with the biggest unions.

What has varied greatly during these different rounds of labor talks is the range of generosity. Tough economic times, or at least convincing evidence that the city is in a fiscal bind, have meant much smaller salary increases for union workers. That was the outcome during a two-year period during Mr. Giuliani's first term. The result is that between 1993 and 1997, when the city was struggling to recover from the last recession, wages went up by a total of only 8.2 percent for clerical workers, while inflation went up 10.7 percent.

Yet between 1998 and 2001, while the economy was booming and Mayor Giuliani was in his second term, salaries went up nearly 15 percent for the same employees, much more than inflation did. Teachers and police officers have done particularly well in recent years, winning raises far in excess of inflation.

Mr. Bloomberg confronted the unions early. In a pitch to balance the budget for the 2004 fiscal year, which started July 1, without extensive layoffs, he asked the unions to grant $600 million worth of cuts in fringe benefits. The unions made proposals on pensions and health care that they swore would save $600 million, but Mr. Bloomberg denounced them as smoke and mirrors. When those efforts faltered, he moved ahead with plans for layoffs.

''He said he would work with you, did not, turned around and then laid off municipal workers,'' said Patrick J. Lynch, president of the Patrolmen's Benevolent Association. The unions were seething, and negotiations have been stalemated ever since. Equally important to the calculus that goes into labor negotiations is the politics within the unions.

A big factor that could affect the outcome this year is what happens to leadership at the largest municipal union, District Council 37. Representing 125,000 workers, it has often set the pattern for all city unions in contract talks.

The council's executive director, Lillian Roberts, is up for re-election. Many union leaders say it is extremely unlikely Ms. Roberts will entertain, much less accept, the mayor's demands for concessions because that could make her look weak in the heat of her re-election campaign.

Ms. Roberts disputes the suggestion that the election will have an impact on her negotiation stands. But she also immediately rejected the mayor's demand that any raises must be financed by concessions on productivity.

''Our members definitely need a raise,'' she said. ''They have been subjected to tax increases, increases in transportation and their rents. They're the lowest-paid workers in the city work force.'' (The average entry-level city caseworker earns $29,895, while entry-level teachers earn $39,000 and rookie police officers earn $36,878.)

But there were at least some hints of possible common ground that surfaced during a round of recent interviews with the presidents of all the major unions and the city's top labor negotiators.

For example, Mr. Lynch, the president of the police union, said he would consider longer work shifts, but fewer workdays as a way to help the city cut its huge overtime bill. That is the opposite of what the Bloomberg administration has requested -- it wants shorter days and more shifts -- but at least changes in the Police Department's work schedules appear to be open for discussion by both sides.

As for the city's desire to increase the length of runs by sanitation trucks -- more trash per truck would lower costs -- Harry Nespoli, president of the Uniformed Sanitationmen's Association, said, ''I am willing to sit down and negotiate anything I can.''

In interviews with the heads of the unions representing teachers, firefighters, correction officers, sanitation workers and District Council 37 employees, one of the most common refrains was that before the negotiations can begin in earnest, the Bloomberg administration is going to have to offer a basic raise. Only then, they said, can there be talk about agreeing to money-saving measures as a way to finance raises beyond this minimum.

So far, though, there is no sign that the mayor plans to change his demand that any raises must be paid for with such concessions.

''It is not realistic to say we are going to start at zero and you are going to have to give something up to get a raise,'' said Stephen J. Cassidy, president of the Uniformed Firefighter's Association. The union's contract expired in May 2002.

The administration continues to press for savings, like reducing everyone's vacation days by three; that would save the city an estimated $140 million a year.

But the city, like the unions, also seems open to another money-saving solution, one that in the short term merely shuffles dollars around but can save the city money out of the operating budget for which it can pay for raises. It involves pensions.

The municipal unions earlier this year proposed saving the city $300 million by deferring payments into its pension fund. At first, Mr. Bloomberg lampooned those proposals, saying they would merely delay spending to later years.

But Deputy Mayor Shaw said in an interview last week that the city might consider that idea if it were coupled with the mayor's proposal to change pension benefits for new city employees, perhaps by cutting out automatic cost-of-living increases.

That change could provide the city with modest savings short-term but could save billions of dollars in future decades. And it has an added attraction: both sides could present it as a victory.

''It would be a classic New York-style political solution,'' said E. J. McMahon, a senior fellow for tax and budgetary studies at the Manhattan Institute, a conservative policy research group. ''But once again, they will not have addressed the fundamental issue of productivity.''

If there is one thing the mayor and the unions fully agree on, it is that the contract talks will be hugely difficult and hugely important. If Mr. Bloomberg drives too hard a bargain and enrages the unions, they could flex their political muscle and even upend his re-election efforts. Angry unions could also affect worker morale and productivity -- and, consequently, the quality of city services.

But Mr. Bloomberg is not without recourse. If the unions shun his pleas for productivity improvements, he might lay off more workers to balance the budget. He also could delay reaching any contracts, which in effect means an extended wage freeze for city workers.

''The most successful mayors have been the ones who have not overly antagonized unions but have negotiated deals that are in the public interest,'' said Vincent J. Cannato, author of ''The Ungovernable City: John Lindsay and His Struggle to Save New York,'' and an assistant professor of history at the University of Massachusetts Boston.

For Mr. Bloomberg, Mr. Cannato said, the time has come to demonstrate just how well his brilliance as a businessman translates in the arena that is City Hall.

''He made lots of money as a hard-nosed businessman, and in a large part New Yorkers voted for him because he was a successful businessman,'' Mr. Cannato said. ''Now he has to translate that into getting a decent deal for the city.''