Outgoing Comptroller John Liu's final report on city finances includes a section on labor costs (see below in italics). I urge everybody to read the municipal labor portion closely. According to the report, revenue is coming in well but every municipal union is working under an expired contract. The situation for educators is worse than for other unions because we are one round behind everyone else.
The pattern established with other unions back in 2008 - mentioned multiple times on this blog - is a 4% salary increase in year one + a 4% raise in year two without givebacks. According to Liu, paying teachers and administrators that money retroactively will cost the city a whopping $3.5 billion in this fiscal year and $900 million annually after that. (Why will it cost so much? Please read our explanation here.) The city might swallow most of these costs (they may defer the retroactive portion) if we accept the city's offer to freeze wages for the following three years.
The city proposal for all of the unions in the next round of bargaining is to offer a contract based on the pattern set by New York State and the Civil Service Employees Association (CSEA). CSEA agreed to a five year deal calling for 0% in year one followed by 0% in year two and then 0% in year three followed by 2% in year four and another 2% in year five. That settlement was a very bitter pill to swallow for state workers.
Will a five year contract that includes three years of a wage freeze fly with teachers and other city workers?
I believe the answer is probably yes because all of us have been working without contracts for so long that putting any raise in front of us will be something most workers will jump at and take. If there was a grand bargain to settle both contracts at once, teachers would be looking at seven years. The last UFT salary increase was in 2008! Even if we obtained the 4 + 4 that everyone else in the city's workforce received, that would cover 2009-2010 and 2010-2011. 2011-2012, 2012-2013 and the current 2013-2014 school year would be our three straight years without an increase if we were to follow the state pattern for the next round.
The key is getting the retroactive money because that would increase our salaries for 2009-2011, which would then compound for the subsequent years. There is talk of a cash payment instead of retroactive increases. Such a deal would cost UFT members a huge amount of money. Would teachers accept it?
Staying on pace with inflation looks like a pipe dream. Getting what every other city worker received is also not guaranteed but we should fight for these things. I can find plenty of savings in the DOE budget as I'm sure most of you could too.
Here is the part of the Comptroller's Report that deals with the municipal unions:
The City’s labor contracts with its major municipal unions have expired and members are currently working under expired contracts. The City has proposed terms for a five-year contract for each union which mirrors the 2011 five-year agreement between New York State and the Civil Service Employees Association (CSEA). That agreement included zero wage increases in the first three years and annual raises of 2.0 percent in the last two years of the contract. However, the City’s labor reserve reflects the cost of only 1.25 percent annual wage increases beginning in the fourth year of the current round of collective bargaining. A 2.0 percent wage increase in each of the last two years of a five-year contract will cost the City an additional $111 million, including retroactive cost, in FY 2014, $200 million in FY 2015, $325 million in FY 2016, and $410 million in FY 2017.
The Comptroller’s Office estimates that if all unions instead agreed to an annual increase of 1.0 percent over the five-year term of the contract, it will cost an additional $1.6 billion, including retroactive cost, in FY 2014, $770 million in FY 2015, $758 million in FY 2016 and $694 million in FY 2017.
If the wage increases were linked to inflation, the additional cost would increase to $3.4 billion in FY 2014, $1.9 billion in FY 2015, $2.1 billion in FY 2016, and $2.4 billion in FY 2017.
The labor contracts for the United Federation of Teachers (UFT) and the Council of School Supervisors and Administrators (CSA) are one round behind the contracts of the City’s other municipal unions. The City and the unions were unable to reach an agreement in the 2008 – 2010 round after the City proposed a settlement with no wage increases. The other municipal unions had settled for a two-year contract with 4.0 percent increases in the beginning of the first and second year of the contract. The New York State Public Employment Relations Board (PERB) is in the final stage of a fact finding process that was initiated to resolve the deadlock between the UFT and the City.
PERB will shortly hold a final hearing on wage increases for UFT members and then issue a report detailing recommendations for a contract resolution. While PERB recommendations are not binding they have served as a framework for final labor contracts with the UFT in the past. A recommendation patterned after the labor agreements of the other municipal unions will cost the City approximately $3.495 billion in FY 2014, including retroactive cost, and $900 million annually beginning in FY 2015.