MASS transit is second only to crime in determining New Yorkers’ qual ity of life — and whether people come or stay. Yet the Metropolitan Transportation Authority, which runs the city’s subways and buses, is on a collision course with its own finances.
The billions in new revenues that the Legislature gave it two months ago didn’t do the trick — because the MTA’s costs still aren’t under control.
The biggest threat to decent mass transit is the state-run agency’s labor costs. Since 2004, they’ve risen more than 40 percent, to nearly $7 billion a year. The biggest drivers: pensions and health care, which total $2.5 billion. And they’re headed further skyward — to at least $7.6 billion by 2012.
The agency’s debt is also scandalous — with payments up by nearly half in five years, to $1.5 billion, and set to swell to $2.3 billion over the next three years. But politicians hiked the debt mainly to avoid confronting labor costs.
These fast-rising expenses are a crisis because they leave the MTA short on funds for its capital spending — the $5 billion it needs for infrastructure every year. (Two-thirds of this money keeps the existing system running; the rest pays for expansion projects, including the decades-overdue Second Avenue subway.)
Unless the local economy bounces back hard, and soon, the agency won’t have the funds for needed capital spending in 2010 and 2011. It may barely have enough to cover day-to-day operating expenses.
To keep investing in the infrastructure that makes the city’s economy move, the MTA can’t avoid addressing the bloated labor costs that are stalling it.
Most savings won’t come from the top. Some 2.8 percent of the MTA workforce earns more than $100,000 a year before overtime, consuming just 5.8 percent of the payroll. On Mayor Bloomberg’s city payroll, by contrast, 7 percent of workers top the 100-grand mark, consuming 22 percent of the payroll.
Which means the MTA needs to find its big labor savings among blue-collar, unionized workers. That doesn’t have to mean paying substandard wages to skilled employees. It does mean getting smarter with how labor’s deployed.
Consider what graduate students at the New School found in a recent research project with the Manhattan Institute, a study of subway-track workers.
The MTA pays 1,865 track workers an average of nearly $59,000 (not including benefits or health care), for $109 million total. Yet, thanks to union rules, the agency schedules “nine hours of a track worker’s 40-hour week” during peak rush-hour times — when safety rules keep workers off the tracks.
That is, the MTA schedules workers “when no work can take place.”
Indeed, union rules mandate eight-hour shifts that will almost always overlap with rush hour — so that workers typically have to finish jobs during more expensive overtime. That’s why overtime accounts for about 12 percent of track-worker costs.
Over the past two years, the MTA experimented with trimming these costs. It got the union to agree to a pilot program that scheduled workers on a four-day week — with two 12-hour days on the weekend (when fewer trains run), bringing up the number of productive hours. The resulting savings, if made permanent, could be tens of millions a year.
But that would require “the abolishment of the eight-hour shift, an important bargaining agreement for the Transit Workers Union,” the New School students noted.
Then there’s customer service. The MTA spends $191 million a year on subway-station clerks who earn an average of $54,000 a year, not including health care and pensions. The agency could get qualified people to do these jobs at retail-level wages — half of what it pays now.
And there’s no reason that clerking has to be a full-time career: At many locations, extra staff could be limited to rush hours, with the work done by college students and other people seeking part-time employment. Of the MTA’s entire 70,000-strong workforce, only 300 people are part-time.
There’s much more, of course: The MTA still needs major savings in pensions and health care, too.
Yes, all this means getting contract concessions from the traditionally militant TWU. That requires serious political leadership — or at least a united front of the Legislature, Gov. Paterson and Mayor Bloomberg.
If confrontation is the price, it’s worth it. New York simply can’t — mathemati cally can’t — make good on the promises it keeps making to its public workforce.
If we don’t make changes now, we’ll make them later — when our fiscal position will likely be more desperate.
The city doesn’t control the MTA — but Bloomberg didn’t control the schools until he decided that somebody accountable to city residents needed to be in charge. New York needs its mayor to treat transit as an asset, not a liability — making the case for a massive investment in new technology to slash outerborough commuting times, bringing huge swaths of inexpensive housing closer to Manhattan.
Let’s hope that the subway system doesn’t have to fall apart, as it did three decades ago, before New York pols realize its importance.
Nicole Gelinas is a contributing editor of City Journal. nicolegeli@hotmail.com
Tomorrow: E.J. McMahon on the looming pension disaster.