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Let Them Eat 1.6 Percent

Media gasps over New York City workers’ retroactive pay is one episode in the longer game of the rich contributing less in personal and corporate taxes.

Media gasps over New York City workers' retroactive pay is one episode in the longer game of the rich contributing less in personal and corporate taxes.

Michael Bloomberg has left City Hall but his spirit lives on in New York City, as demonstrated by the Marie Antoinette-like gasps from local pundits in response to a quite modest raise proposed for city transit workers.

The Metropolitan Transportation Authority (MTA) and Local 100 of the Transport Workers Union recently announced a contract settlement that would increase pay by 8 percent over five years, which is a yearly average of 1.6% – almost identical to the regional rate of inflation (and keep in mind that New York City rents go up by about five percent each year.) Last week, the United Federation of Teachers announced a contract with the city that is similar to that of the transit workers – 18 percent wage increase over nine years – and perhaps worse given the significant givebacks in health care and work rules on the part of the union. These proposed deals, which would set a pattern for the rest of the city workforce, are a disappointment to many union members who hoped that new mayor Bill de Blasio’s promise of all New Yorkers “rising together” wasn’t just referring to keeping up with the cost of living.

Yet these contracts have been covered in most of the media as though the unions have pulled a fast one over taxpayers. The Wall Street Journal, which ought to be able to recognize a truly excessive compensation package when it sees one, reported that the teachers’ contract would “boost city costs by billions of dollars.” Meanwhile in the New York Times, Thomas Kaplan described the monetary details of the transit workers’ contract as if they were a dirty secret only discovered through investigative reporting:

When Gov. Andrew M. Cuomo revealed to great fanfare last week that a deal on a new labor contract had been reached with New York City’s subway and bus workers, officials did not reveal how much it would cost. . . . Now, according to a newly released document, the deal has a price tag: $525 million over the next four years.

It turns out that even modest raises, when added up for a large workforce over a number of years, can add up to a decent amount of money. Take for instance, the well-known travesty that over a billion people around the world live on a dollar a day or less. Looked at another way, over the next four years, poor people around the world are going to be making close to four billion dollars, which sounds pretty darn sweet.

The Times article went on to quote Charles Brecher of the Citizens Budget Commission (CBC), who said the wage increase “certainly is a hit on their budget. That money has to come from somewhere.”

Well yes, that’s how these things generally work. Raises cost money, which does indeed come from somewhere, a place in this case known as the MTA budget. I suppose that money allocated to raises could be called a “hit,” but standard practice is to use the word “expense,” because that makes the act of paying workers sound less like a mob assassination of public funds.

It is considered extravagant to give 1 and 2 percent raises to the people who allow the city to function. . .

By this same logic, one could bemoan any money at all that is paid to workers’ salaries and benefits. I’m surprised this hasn’t yet become a regular complaint on Fox News. At the end of every week, billions of dollars are given away to people – just for doing their jobs.

According to a recent paper coauthored by Capital in the Twenty First Century author Thomas Piketty, 95 percent of income gains have gone to the literal One Percent over the three most recent years available for study. In this climate, the idea of workers getting raises is becoming exotic, even radical. Thus, in a city where it is standard practice for hedge funds to be guaranteed at least 2 percent profits even if they completely screw up their investments, it is considered extravagant to give 1 and 2 percent raises to the people who allow the city to function by driving buses through midtown traffic and fixing subway tracks in the middle of the night.

Perhaps the ultimate goal is to move all employment into the informal sector, where even the most basic labor rights can be up for grabs. I have a friend who works off the books helping to manage the household of a rich family on the Upper East Side. Almost every Friday afternoon, he has to remind his employers that he hasn’t been paid that week, at which point they sigh, stressfully look for their checkbooks, and give off the general vibe that his request to be paid for his work is an imposition on them. Maybe soon they will hire someone from the CBC to show my friend studies on how much these Friday afternoon payments are costing them over a four-year period.

There is a method to the pettiness, of course. The contracts for teachers and transit workers have raised red flags because it includes retroactive pay – 1 percent annually – for the two years that the workers went without a contract. The worry is that this could set a precedent for the rest of the city workforce who have gone at least two years without a contract. In the last few years of his mayoralty, Bloomberg left unions without new deals and didn’t budget for the raises that they would normally receive to keep up with inflation. Those years of missing wage increases for over 300,000 workers are now estimated to total over 7 billion dollars, which commentators across the city, led by the Times editorial board, have declared an impossibility for the city to afford.

This is a shell game. While the Times claims that retroactive pay for city workers would take away from “affordable housing, health care and new initiatives for the poor and dispossessed,” just as easily argue that the money that normally would have been spent on raises over the past few years has instead allowed for billions more to be spent on unnecessary tax breaks.

The pundits who think it’s an act of noblesse oblige to give workers even a small raise might be surprised over the next few weeks at how many teachers, track workers, and other city employees have a higher opinion of the value of the work they do. There is no guarantee that the membership of the city unions will vote to approve these contracts. “The city can afford…[higher] raises,” writes Mike Schirtzer on the website of the Movement of Rank and File Educators. “It’s not our job to help the city out, because no one has told the millionaires that they should help out by giving back their bonuses or pay more in taxes.”

As Schirtzer indicates, the stunt being pulled with city workers’ retroactive pay is just one episode in a much longer game of the rich contributing less and less in personal and corporate taxes, resulting in nurses, sanitation workers, and other government workers being told there is no money while the 1% flaunts its wealth all around them.

The idea that that there is a rigid division between the public and private sectors is increasingly unsupportable, which is one explanation for the recent polls indicating growing support (including a majority of youth, people of color and the poor) for the concept of socialism. It is just common sense that a society that scrutinizes every measly dollar paid to subway conductors so they can afford the next rent increase ought to exercise control over the obscene fortunes being amassed by bankers and corporate executives. After all, their money has to come from somewhere too.

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