Labor Law is Choking New York’s Governments
Gov. Cuomo and legislative leaders have reportedly decided not to pursue a key reform this year — changing the Triborough Amendment, which now keeps public-employee-union contracts in effect even after they expire. This is a major blow to their promise to relieve local governments of the heavy burden of state spending mandates.
To see why, imagine a business whose labor costs can only go up, even if the economy tanks and revenues dry up. And which must continue to give workers wage hikes even when their union contract expires. It’s a prescription for bankruptcy.
That’s precisely the situation governments across New York face thanks to the Triborough Amendment. Passed 30 years ago, this arcane, only-in-New York law threatens to bust the budgets of the state’s counties, towns, villages and school districts with “stealth” increases in labor costs that put services at risk, hurt economic competiveness and add to the burden of the highest property taxes in the nation.
Triborough’s supporters say it only keeps the status quo of previous contracts in place during negotiations. But that’s not the reality. Consider the situation now in Westchester: All eight public unions are now working without a contract — one of them in its fourth year. But wages aren’t frozen at previous contract levels. Workers still get the longevity and step increases built into the old contract — hikes that often equal or exceed “regular” salary increases.
Then there’s the matter of retroactive increases. Even though workers receive pay hikes as negotiations drag on, unions typically demand (as a condition of settlement) that the new contract include compensation for the wage hikes “lost” during the extended talks. Welcome to the New York edition of “Alice in Wonderland.”
There’s more. While these hidden wage costs run into the multimillions, the big money is in health care. Unlike most private-sector employees, even unionized ones, Westchester County’s union workers get free health-care benefits at a cost to county taxpayers of $130 million — and will continue to get that, unless an employee contribution can be negotiated (or, theoretically, be imposed by an arbitration panel) in the new contract.
So unions have pay hikes and generous benefits “locked in,” even without a new contract. They have zero incentive to come to the bargaining table.
Layoffs are the only tool that can get the attention of unions. But this option isn’t in the best interest of either side — it means loss of jobs for unions and loss of services for taxpayers.
So when I call for reform of the Triborough Amendment, my position is not anti-union, it’s pro-job preservation. I am a union member and supporter of collective bargaining. I’m also extremely proud of our county workers and the quality service they deliver. But we’ve reached the point where if the union workers keep on growing more expensive, we’ll simply have to have fewer of them.
Look at the math. The average salary of a private-sector employee working in Westchester is about $63,000, according to the state Department of Labor. In contrast, the average county worker salary is about $71,500. Throw in fringe benefits, which include free health care and pensions, and average total compensation for county workers jumps to $110,000.
That imbalance is not sustainable.
Our economy and society are dynamic. Governments, businesses and unions must adapt to current circumstances. Michigan, certainly a pro-labor state, made collective-bargaining changes last year that we need to consider in New York:
* Wages and benefits during the negotiations can be “no greater than those in effect” during the expired contract.
* No retroactive payments: The new contract starts when it’s signed.
* Employees must pick up any increases in the cost of health-care benefits that occur
Whether these are the right reforms can be debated. What’s not debatable is that New York urgently needs to address its collective-bargaining laws. Local governments are suffering. Change can’t wait.