The four day BART strike that ended on July 5th provided ample evidence of how public sector union power can inflate wages – and expectations – far beyond what the rest of us may consider normal or fair. In a July 1st editorial entitled “Striking BART workers out of touch with financial reality,” the Contra Costa Times wrote:
“They’re already the top-paid transit system employees in the region and among the best in the nation. They also have free pensions, health care coverage for their entire family for just $92 a month and the same sweet medical insurance deal when they retire after just five years on the job. They work only 37½ hours a week. They can call in sick during the workweek and then volunteer for overtime shifts on their days off. The rules exacerbate out-of-control overtime that added in 2012 an average 19 percent to base pay for station agents and 33 percent for train operators.”
According to the San Jose Mercury, who has published BART payroll and benefits per employee as part of their Public Employees Salary Database, the average total compensation – what they refer to as TCOE or “total cost of employment” for a BART worker in 2011 was $116,309. This is for a 37.5 hour week before overtime – but there’s more:
From the San Jose Mercury’s editorial of June 13th, BART pay plan is the most outrageous yet,” in addition to working 37.5 hour weeks, BART employees “earn three weeks’ vacation each year, gradually increasing to six weeks after 19 years on the job. They also have 13 holidays. Naturally they don’t use it all, so they’re allowed to save unused vacation and holidays without limits. Many can even add some unused sick leave. In San Jose, top management and some unions can accrue time like this for a huge payoff when they retire. BART’s system is even more outrageous. When managers leave, they can use that accrued time to actually stay on the payroll — to continue receiving full salary, incentive pay and health benefits, and to accrue work credit that boosts their subsequent pensions. They even — get this — receive holiday pay and accrue more vacation time that they can use to further extend their time on the payroll.”
Journalists are getting much better at recognizing that total compensation – total cost of employment including the cost of employer paid benefits – is the only valid way to evaluate how much someone earns. Equally significant however is the value of paid time off. If a person works 37.5 hours a week, they are only working 93% as much as someone who works a 40 hour week. To get a valid comparison, inflate the pay of the person who works 37.5 hours per week by (40/37.5)-1, or 6.7%. If someone is getting six weeks paid vacation per year, and the average worker only gets two weeks off with pay, then consider a 50 week year vs. a 46 week year, and inflate the pay of the person with six weeks vacation by (50/46)-1, or 8.7%. It adds up. Ask anyone in a salaried job that requires 50 hour weeks, or a self-employed person who isn’t paid on days they don’t work. And how many of them ride BART?
One may argue whether or not unions have a legitimate role in private industry – but BART is a public institution, holding monopoly power over mass transit options in much of the San Francisco Bay Area. There are few journalists or commentators left, even in the Bay Area, who won’t consider that excessive union power is the reason for excessive compensation packages for BART employees.
But compensation is only one aspect of how unions in the public sector damage the solvency and effectiveness of public institutions.
In a July 5th commentary on Townhall entitled “Labor Unions Against the Public Interest,” author Chris Edwards examines the additional challenges mass-transit management encounter thanks to a unionized workforce. Referring to the Washington DC Metro, he writes:
“‘If I had my druthers,’ [The DC Metro’s System Manager] said, he would hire station managers based on ‘the ability to operate in a customer-friendly way.’ But, Sarles said, Metro’s collective bargaining agreement requires him to promote bus drivers to train operators and station managers. In fact, his spokesman said, mediocre bus drivers may get promoted more quickly because ‘we need to get you from behind the wheel.’ And if someone does a great job as station manager, ‘I can’t recognize that financially,’ he said. So here’s the “manager” of a government agency who doesn’t even have the authority to manage his own workforce. It is ironic that Metro and BART are called “public services,” but managers of private businesses are better able to actually serve the public.”
This is just one example of work rules that greatly impede the ability of unionized public agencies to operate efficiently. These work rules undermine the authority of public officials – most of whom are elected by these same unions they supposedly manage – to promote based on merit, to demote or fire for incompetence or negligence, to streamline operations, to change job descriptions, or otherwise manage their agencies. And this affects every unionized transit agency, public utility, municipal bureaucracy, public safety organization, school district or public works department in the United States.
The BART strike cast a bright light on excessive compensation for unionized public workers. But the issues run far deeper than just money. If government workers were not exempt from the challenges of globalization because of their unions, they would use their influence within government and as private citizens to help break up monopolies and enable competition. This in-turn would lower the overall cost-of-living and benefit everyone. Instead, public sector unions are monopolies themselves, first among equals, in an increasingly monopolized society.
* * *
UnionWatch is edited by Ed Ring, who can be reached at firstname.lastname@example.org