April 28, 2016
Off with their heads.
That’s the cry that has gone up when people talk about Metro now, and it’s grown in fury as problems with the Washington region’s subway become worse.
Some riders, civic leaders, politicians – not to mention a sizable portion of the Twitterverse — not only want Metro General Manager Paul J. Wiedefeld to get rid of (in their opinion) all those lazy, incompetent workers, they want him to get rid of their unions, too.
Unions drive up costs with their bloated salaries. Union work rules gum up efforts to fix the rail network. Unions shield rude and slovenly workers. Unions stand in the way of improving safety. Union pensions have blown up Metro’s finances with unfunded liabilities.
It’s all the unions’ fault, these critics say.
To which, one might say: bunk.
In fact, you know it must be bunk when some of the loudest calls for head-rolling at Metro have come from Congress, whose pay, fringe benefits, inefficient work rules, job security, and overall money-grubbing are virtually unsurpassed in the land. Even some conservatives who make their living criticizing the labor movement concede that unions are not the biggest problem with the Washington Metropolitan Area Transit Authority.
And yet many people – like corporate executives everywhere – have a habit of blaming organized labor, even when the source of incompetence begins in the boardroom. It’s understandable that the people in the executive suite think this way. What’s peculiar is how many riders, no doubt including many who are working- and middle-class people, reflexively parrot them.
“I think the unions are a significant impediment,” James Sherk, research fellow in labor economics at the Heritage Foundation, said in an interview. “The union is negotiating contracts designed to make working as convenient and as comfortable as possible for their members–which is their job. But it comes at the overall efficiency of the system.”
Metro has about 12,995 employees and several unions, including one for the Metro Transit Police. But most critics focus on Local 689 of the Amalgamated Transit Union, which is part of the AFL-CIO and covers the majority of workers, including train operators, maintenance crews, and other employees. Their four-year contract expires June 30. To advise them, Metro has shelled out $1.7 million to hire Jones Day, a white-shoe law firm with a reputation for advising clients on aggressive strategies to counter organized labor.
Of course, people cost money, and always have. Personnel expenses now make up approximately 73 percent of Metro’s operating budget, according to a Nov. 5 Finance & Administration Committee report. That breaks down to $822 million in salaries and wages, overtime of $78 million and fringe benefits, including healthcare, pension and others, of $431 million in fiscal 2016. That’s a lot, but back in the late 1970s – the golden age of Metro – labor costs approached as much as 80 percent.
Metro’s wages have to be competitive here, especially now because the labor market has been tightening. The unemployment rate in the Washington region was 4.2 percent in March, compared with 5.0 percent nationwide.
That said, the biggest driver behind rising labor costs – has been hiring, according to a January 2016 McKinsey & Company report. Headcount at Metro has grown 6 percent per year, the report says. Say what you will about unions, but they’re not in charge of hiring.
At the top of his indictment of Metro’s unions, Sherk said union pay is out of whack. He said a janitor can pull down $27 an hour, when the average wage for that position elsewhere in the region is $13. Plus, there are all those federal holidays.
“If they work on a holiday or their birthday – as many must, to keep the system running – Metro pays them double time: pay for 16 hours of work, in addition to getting the 8 hours for a paid holiday,” Sherk said.
Metro also operates under byzantine work rules that create inefficiencies and drive up costs, Sherk said. These include contract provisions that assign overtime work on the basis of seniority, so that the highest paid workers get dibs on making even more money. Work on the mass transit system’s fragile escalators has been hampered because of work rules covered its “Pick” system, which gives employees some say in their work assignments, Sherk said.
(Management’s complaint about “the Pick” was documented a few years ago by The Daily Caller and the blog Unsuck DC Metro but the original WMATA report could no longer be found online.)
Unlike the private sector, however, Metro’s unions are insulated from competition and other market forces that might force them to relent on unrealistic demands and focus on delivering a quality service that satisfies paying customers, Sherk said.
“I absolutely believe unions have no place in government,” Sherk said.
Thomas A. Rubin, a consultant who was a former chief financial officer for what is now the Los Angeles County Metropolitan Transportation Authority, also believes that Metro has serious issues related to personnel, particularly on its balance sheet.
Metro’s pension liabilities have ballooned to about $2.6 billion. In addition to the pension liability, Metro also is on the hook for other $1.5 billion in retirement healthcare benefits that cover union employees and union-exempt management. For union members alone, the tab on retirement health care alone is nearly $1.1 billion.
Relatively speaking, Metro’s ratio of unfunded pension liabilities is not as dire compared with other public mass transit systems, such as the Chicago Transit Authority’s, Rubin said. But it’s also not Metro’s unions who choose not to fund them properly, he said. It’s Metro’s management.
“They haven’t put a penny in,” Rubin said. “They’re kicking the can down the road.”
Rubin also notes that all of the rules that govern the workforce are hammered out at the bargaining table.
“I’ve never seen a labor contract that has one set of signatures on it,” Rubin said. “Now, it’s very difficult to get something changed once it’s in a contract. But I don’t see any reason to believe that WMATA management has been trying very hard.” Rubin said Metro’s managers could at least move to close the pension to newly hired employees.
But Ross Eisenbrey, vice president of the Economic Policy Institute, is among those who is happy Metro has strong unions.
“If you left it to management, if you didn’t have a union to push and protect the workers, God only knows how bad the system would be,” Eisenbrey said.
Perhaps it’s because Americans have been taught for decades now to find fault with unions and workers rather than corporate and government managers. Perhaps it’s because of the American dream teaches that everyone can be a millionaire, and if you’re not you’re not really trying. But every worker should insist on adequate retirement benefits. The country’s already headed toward a crisis as people cease working without enough savings to last them through old age, Eisenbrey said.
“The thought that people don’t need a pension – it’s crazy,” Eisenbrey says. “Of course they need a pension. Or if they don’t have a pension, they need the employer to put in something on the order of 9 to 12 percent a year into their 401 (k) plan – which is probably more than what WMATA is putting into their pension plan every year.”
In this case, Metro agreed to contribute to their workers’ retirement and has so far reneged on its promise to fund them—a pattern that has happened all over the country in almost every industry. But then the bill comes due and — doh! — management points the finger at workers.
But most of all, on safety alone, no one has more of an incentive to make sure the system’s operating safely than the people who work there, Eisenbrey said. Yet, if anything, union workers have complained that when they bring up problems, they’re labeled as troublemakers. As recently last April, the ATU local’s president, while reiterating complaints about uncompleted work orders, suggested that Metro spent too much time window-dressing for VIP visits while ordinary maintenance requests went begging.
“I’m rooting for the union,” Eisenbrey said. “I want them to do everything they can.”
[Disclosure: as co-chair of the Washington Baltimore News Guild’s bargaining unit at The Washington Post, I’m a member of the Communication Workers of America.]
P.S.
Neither the Amalgamated Transit Union nor Metro could be bothered to discuss any of these issues in depth. The ATU, after a week of saying no leader was available to discuss these issues, issued the following statement attributed to ATU local president Jackie Jeter:
“Transportation is a very expensive business and no amount of wages that you can cut will make up for the amount of money it will take to make the repairs that are needed. . . All the wages that the workers receive have are negotiated by the Union and the Authority, either through contract negotiations or through arbitration. It’s a negotiated process, not an arbitrary decision made exclusively by the Union. In addition, many of the things we have earned have also come along with concessions. We have done business through a negotiated contract to find what is in the best interest of both the transit system and workers for the last 100 years, since our founding in 1916.”
Metro also declined to provide someone to discuss labor issues in detail. Instead, a Metro spokeswoman had this to say:
“All major transit systems in the U.S. operate with union-represented workforces. Union employees safely move millions of people every day, and so blaming a single entity or organization is misplaced. There are many labor-management partnerships that are making Metro safer, such as the Close Call program and the current bus operator assault prevention programs.”
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