The New York Times

October 19, 2005

Mayor's Demand for Productivity Yields Tension, Then Contracts


Mayor Michael R. Bloomberg came into office with an unusual message for the city's 300,000 workers - they would not get raises unless their unions agreed to money-saving measures that paid for their wage increases.

Facing intense pressure from the city's unions, Mr. Bloomberg has given way somewhat on that demand, but, labor experts say, he has nonetheless wrung more productivity increases and other concessions out of the unions than previous mayors have.

Mr. Bloomberg pressured the teachers' union into adding two days to the school year and 10 minutes to the average school day. The Patrolmen's Benevolent Association has accepted a lower starting salary and relinquished one personal day. And last week the sanitation union agreed to one-person garbage trucks and longer collection routes.

"What Mayor Bloomberg has done in terms of productivity is less than the standard he set for himself, but he has done more than his predecessors," said Charles M. Brecher, research director for the Citizens Budget Commission.

The push on productivity has worsened relations with the unions. Labor negotiations no longer focus just on how much more the city can pay; now they also focus on how each union's members can become more productive to help the city save money.

In exchange for such concessions, some unions have obtained impressive raises. The city's 80,000 teachers are to receive a 15 percent raise over 52 months under their proposed contract, while the sanitation workers' settlement calls for a 17 percent raise over 51 months. The police contract includes a 10.25 percent raise over two years.

"The mayor has always been very strong in saying that workers should be paid more," said Marc V. Shaw, the deputy mayor for operations. "We just need to find ways to pay them more. Given the fiscal realities, the only way to do that is to focus on productivity."

Not everyone is heaping praise on Mr. Bloomberg's productivity-based bargaining.

Some urban affairs experts note that Mr. Bloomberg has failed to meet his standard that workers pay for every cent of their raises through productivity increases. Some experts also say he has been too generous, putting the city's long-term fiscal health at risk by not demanding major concessions on costly expenses like health coverage, as private corporations have.

"I don't think the city can afford the police contract, and I'm not sure about the teachers' contract, either," said Fred Siegel, a history professor at Cooper Union and author of "The Prince of the City," about Rudolph W. Giuliani's years as mayor. "Just as we see that Giuliani did a bad job fiscally in his last two years, we may judge Bloomberg very differently if the city's budget goes over the cliff."

For their part, the unions said the mayor's demands for productivity increases have hurt labor relations.

Randi Weingarten, president of the United Federation of Teachers, complained that many city workers received no raises for two years or more because some unions waited two, even three years after their contracts expired to negotiate new ones. For many unions, contract talks bogged down for a year or two after Mr. Bloomberg told labor leaders that no deal was possible until they put forward money-saving suggestions.

"His approach has really hurt the morale of the work force," Ms. Weingarten said. "We've all been put into a terrible situation because Bloomberg has demanded the kinds of productivity increases that are difficult for anybody to try to create."

The fiercest objection to Mr. Bloomberg's approach is that the mayor, in pushing relentlessly for savings, got several unions to accept lower starting salaries. For police officers, starting pay has fallen to $25,100, down from the old starting salary of $34,514, a decrease that city and union officials fear could create recruiting problems.

"He's created problems for tomorrow by paying a substandard salary in the beginning for police officers," said Patrick J. Lynch, president of the Patrolmen's Benevolent Association. "A lot of people aren't going to want to come to the job at that rate."

At first Mr. Bloomberg took what appeared to be a velvet-glove approach with the city's unions. He held photo sessions with union presidents, he heaped praise on municipal workers, and he erased a $2 billion budget deficit not by laying off thousands of workers, but by raising property taxes.

Despite those friendly overtures to labor, Mr. Bloomberg showed how tough he could be in the first major contract negotiated in bargaining that started after he took office. It was with the largest municipal union, District Council 37, and called for a raise of just 5 percent over three years. To the dismay of many labor leaders, that contract, by city tradition, was to set the pattern for other municipal unions.

Signed in April 2004, it covered 121,000 union members and averaged less than 2 percent annually, less than the inflation rate. Mr. Bloomberg warned other unions that if they wanted more than District Council 37, they needed to agree to money-saving concessions.

The District Council 37 settlement contained some important concessions, including a wage freeze in the first year and a lower starting salary for workers during their first two years on the job.

Many union leaders complained that Mr. Bloomberg had outmaneuvered District Council 37 and left them with a paltry wage pattern.

"I think our contract was fair at the time we did it," said Lillian Roberts, District Council 37 executive director. "We did it after 9/11, which was a very difficult time for the city."

But Barry Liebowitz, president of the Doctors Council, which represents 1,200 doctors at the city's public hospitals, spoke for most union leaders when he said, "The pattern set by D.C. 37 was not the best situation for any union that came afterward."

The doctors ultimately agreed to increase their workday by 30 minutes, to 8 hours, and in return the city gave them raises of 10 percent over three years, more than District Council 37 got.

When Mr. Bloomberg told the police and teachers' unions that they could expect no more than District Council 37's 5 percent unless they agreed to cost savings, those unions' leaders grew angry. They called his offer an insult, especially his demand for a one-year pay freeze.

"The city's bargaining approach was unfair," said Mr. Lynch of the police union. "Their negotiating style is they put draconian steps on the table that no one can touch."

The police contract dispute was settled in June when an arbitration panel issued a binding decision calling for a 10.25 percent raise over two years. Mindful of the District Council 37 pattern, the panel ordered several significant money-saving concessions, including the lower starting salary.

The contract dispute with the teachers also grew testy; there were two years of on-again, off-again talks, and the teachers eventually held protest rallies. After an arbitration panel made a nonbinding recommendation, the city and the teachers reached a settlement on Oct. 3.

The 52-month deal, which awaits a ratification vote, included an impressive 15 percent raise and numerous union concessions in exchange for the higher pay. Those concessions including a longer school day, a longer school year and an end to a system that allowed teachers to bump colleagues in other schools with less seniority.

"It is a winner for both sides," Mr. Bloomberg said in announcing the deal.

Many teachers denounced the deal, though, saying they deserved a large raise without having to make concessions.

Probably the best laboratory for Mr. Bloomberg's call for heightened productivity was the negotiations with the Uniformed Sanitationmen's Union. That union has a history of exchanging productivity increases for higher pay, having agreed in 1980 to cut back to two workers on a truck from three.

Last Wednesday, Mr. Bloomberg and the sanitation union agreed to a 17 percent increase over 51 months, the highest raise in the current round of bargaining. That raise was made possible through far-reaching productivity measures. The union agreed to one-person trucks to pick up large, roll-on metal bins, and trash routes will be lengthened so that crews collect more tonnage.

"The trick of this contract was you had to generate your own wage increases," said Harry Nespoli, president of the sanitation union, which represents 6,600 workers. The productivity measures will enable the Sanitation Department to reduce its payroll by 200 workers through attrition.

James F. Hanley, the city's longtime labor commissioner, said Mr. Bloomberg's strategy had paid off.

"Every deal that we have cut so far has had a productivity component with internal savings," he said. "The message is clear from the mayor - if you're willing to come to the table and be flexible and creative and come up with some savings, you can get a terrific deal."

Some unions are angry because they remain without contracts. Most notable are the Uniformed Firefighters Association and the Professional Staff Congress, representing City University teachers.

"In a kind of nonbelligerent way, he has taken a very hard line, and his insistence on productivity givebacks has made labor relations very, very difficult," said Joshua B. Freeman, a labor historian at the City University Graduate Center.

Some urban affairs experts see little reason for municipal workers to complain about Mr. Bloomberg.

"He took office with a major budget gap, and there haven't been layoffs and everyone has been getting pay increases above inflation," said E. J. McMahon, director of the Empire Center for New York State Policy at the Manhattan Institute.

He criticized the mayor for doing little to restrain fast-rising health and pensions costs.

"I don't think he's done enough to press them for concessions on benefits," Mr. McMahon said.

Long before Mr. Bloomberg was elected, the Citizens Budget Commission asserted that city employees deserved to earn considerably more, but it argued that higher pay should be financed through measures guaranteeing higher productivity.

"People used to look at us like we're crazy for saying that," said Mr. Brecher, the group's research director. "Now it's accepted that that's how it's going to be."