A Stitch in Haste

The New York Times would have you believe that the transit workers were the victors:

When [union leader Roger] Toussaint appeared before television cameras at 11 p.m. on Tuesday to announce the settlement, he commented little except to read an impressive list of new worker-friendly provisions: raises averaging 3.5 percent a year, the creation of paid maternity leave, a far better health plan for retirees, a much-improved disability plan, the adoption of Martin Luther King's Birthday as a paid holiday, and increased "assault pay" for bus drivers and train operators who are attacked by passengers.

This is, of course, utter nonsense.

Remember, what matters isn't what the transit workers got, but what they got as a result of the strike (i.e., the marginal benefit of striking compared to the marginal cost).

Although we cannot know exactly what would have happened had the workers not gone on an illegal strike, we know from the negotiations before the strike that the MTA was offering somewhere in the neighborhood of a 6-7% salary increase over three years. The workers got 10%.

That's about it -- 4 percentage points more at most.

The rest of the gobbledygook -- MLK Day and "assault pay" and such -- was all on the table before the strike; nothing on that "impressive list" was in any way a dealbreaker for the MTA. It is entirely illegitimate to assert that they were obtained as a direct result of the strike. The pension tug-of-war was a draw (sorta kinda -- see below).

Meanwhile, here's the strike's marginal cost to the workers:

--Six days lost pay. As I blogged previously, even assuming the high-end 4% incremental figure, that means that striking workers will have to work 150 days before they catch up.

--Potential court fines on individual striking workers on top of the two-for-one Taylor Law strike penalty.

--The union was fined $3 million, almost its entire net worth. Its leaders still face possible imprisonment.

--Transit workers must now pay health insurance premiums.

--The MTA won a critical concession: a 37-month contract, which means that the union will never again be able to hold the Christmas shopping season hostage.

--An inestimable amount of lost goodwill among ordinary New Yorkers.

It seems obvious to me that the MTA was the overall victor here.

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Except for this:

[The MTA agreed] to special payments of up to $10,000 for more than half the Transport Workers Union's members...
...
The union claimed its members were owed refunds because many subway and bus workers had years ago paid 5.3 percent of their salaries into the pension system.

But the system was later changed, allowing newer employees to pay only 2 percent of their income and still receive the same retirement benefits as the older workers.

So if I go to the supermarket today and buy a quart of milk for $1.25 and you buy it tomorrow for $1.00, that means I'm entitled to my $0.25 back? Ridiculous. The contract was what it was. The fact that subsequent hires faced a different contract falls under the category of "too bad so sad." There was no error, there was no fraud, there was no inequity.

But bleed the pension dry anyway. That's sure to help transit workers in the future.

The Legislature (which must approve the kickback) should, of course, reject this ludicrous giveaway. But they won't. Organized labor owns essentially all New York's hack politicians, including Republicans. They will ratify the payoff and tax-and-spend Republican governor George Pataki will sign it into law.

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A brief denouement:

Meanwhile, the TWU is reportedly considering fining those members who crossed the picket line during the strike. Union officials are trying to determine who continued to work during the work stoppage.

Members who crossed the picket line could be fined the amount of money they made during those three days. They could also be stripped of their union representation.

I had originally intended to write a major post on this topic alone, going into the various legal doctrines -- such as unconscionability, the "illegal contract" doctrine, unclean hands, in pari delicto, etc. -- that would render any such fines null and void.

Suffice it to say that this merely illustrates how ignoble and immoral these despicable union leaders have been during this whole sordid affair. Workers forced, against their will, to join a union and to pay dues, who when told to go on an illegal strike, decide instead to obey the law, feed their families and not hurt innocent transit riders. And for that, the lawbreakers who run the union want to fine them.

Incredible.

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More thoughts at Half Sigma.