Thursday, December 22, 2005

It's Over!

The TWU has ended New York City's transit strike. The transit workers union will continue to negotiate with the MTA for a contract. Whether they will stay on-the-job remains to be seen.

Yahoo! News has the story here.

The highlights:
The city's crippling three-day transit strike ended Thursday when union leaders — facing mounting fines, possible jail terms and the wrath of millions of commuters — voted to send their 33,000 members back to work without a new contract.

Union board members said the workers would return to their job sites starting with the next shifts. The vote was overwhelmingly in favor of returning to work and resuming negotiations with the
Metropolitan Transportation Authority on a new three-contract.

Mayor Michael Bloomberg said buses should be running by evening, and most subways should be operating in time for the Friday morning rush. "It can't be turned on and off with a flip of a switch," he said of the nation's largest mass transit system.

Roger Toussaint, the combative president of Transport Workers Union Local 100, had recommended that his union's executive board accept the deal.

"We thank our riders for their patience and forbearance," he said.

The walkout, which began early Tuesday, was New York's first citywide transit strike in more than 25 years. The workers walked out over wages, pension contributions and health benefits, leaving their jobs in violation of a state law prohibiting public employees from striking.

"I'm ready to work the rush hour this afternoon if they let me," bus driver Ralph Torres said from the picket line.

While the agreement ends the strike, it does not settle the underlying contract dispute, which means the city could be hit with another walkout if negotiations fail.

The breakthrough was announced just minutes before Toussaint and two of his top deputies were due in a Brooklyn courtroom to answer criminal contempt charges for continuing the strike. On Wednesday, the judge warned he might throw them in jail.

Earlier this week, the judge, State Justice Theodore Jones, fined the union $1 million a day for striking. And under the state no-strike law, the rank-and-file members were automatically docked two days' pay for each day they stayed off the job.

The walkout sent millions of commuters from the city and its suburbs scrambling to find other ways to get to work, and inflicted a heavy toll on the city's economy in the week before Christmas, when New York is usually packed with tourists and holiday shoppers.

The bitterness was captured in tabloid headlines. The New York Post screamed: "Jail 'em!" in front of a composite image of Toussaint behind bars.

"I think it was all for nothing," said commuter Lauren Caramico, 22, of Brooklyn. "Now the poor people of the TWU are out six days' pay, and nothing gained."
Earlier this week, I reflected on both sides of the contract dispute between the MTA and the transit workers. I came down hard on the MTA, and deservedly so. However, I'm not completely prepared to give the TWU a pass on this. Roger Toussaint and his union have much to answer for.

While I respect the TWU's effort to not sell out their future membership, they chose the most combative and disruptive strategy to accomplish their goal. The strike inconvenienced over 8 million New Yorkers and at least 5 million NYC commuters. They may have cost the city's businesses over a billion dollars in revenue. This isn't just corporations and big-wigs that the TWU hurt. Mom-and-pop businesses, small retailers and other workers suffered, too. High School students, as I mentioned before, often had no other way to get to school. The Christmas shopping season, which many retailers depend on to show a profit for the year, has all but collapsed in NYC! The TWU bears responsibility for all of this. Could they have chosen another tactic in which to deliver their message?

Sure. They could have "worked to rule":
Instead of striking, workers with demands that the bosses are unwilling to meet can collectively decide to start "working-to-rule".

Almost every job is covered by a maze of rules, regulations, standing orders, and so on, many of them completely unworkable and generally ignored. Workers often violate orders, resort to their own techniques of doing things, and disregard lines of authority simply to meet the goals of the company. There is often a tacit understanding, even by the managers whose job it is to enforce the rules, that these shortcuts must be taken in order to meet production quotas on time.

But what would happen if each of these rules and regulations were followed to the letter? Confusion would result -- production and morale would plummet. And best of all, the workers can't get in trouble with the tactic because they are, after all, "just following the rules."

Under nationalisation, French railway strikes were forbidden. Nonetheless, rail workers found other ways of expressing their grievances. One French law requires the engineer to assure the safety of any bridge over which the train must pass. If after a personal examination they is still doubtful, then they must consult other members of the train crew. Of course, every bridge was so inspected, every crew was so consulted, and none of the trains ran on time.
They could also have conducted a "good work strike":
Instead of a conventional strike, workers with demands that the bosses are unwilling to meet can collectively decide to have a good work strike.

One of the biggest problems for service industry workers is that many forms of direct action, such as Go-slows, end up hurting the consumer (mostly fellow workers) more than the boss. One way around this is to provide better or cheaper service - at the boss's expense, of course.

Workers at Mercy Hospital in France, who were afraid that patients would go untreated if they went on strike, instead refused to file the billing slips for drugs, lab tests, treatments, and therapy. As a result, the patients got better care (since time was being spent caring for them instead of doing paperwork), for free. The hospital's income was cut in half, and panic-stricken administrators gave in to all of the workers' demands after three days.

In 1968, Lisbon bus and train workers gave free rides to all passengers to protest a denial of wage increases. Conductors and drivers arrived for work as usual, but the conductors did not pick up their money satchels. Needless to say, public support was solidly behind these take-no-fare strikers.
Either of these legal or pseudo-legal tactics could have delivered the message. One would certainly have inconvenienced New Yorkers--but would not have violated the Taylor law. The other would have positively delighted strap-hangers--and terrified MTA executives! Unfortunately, Roger Toussaint decided instead to instigate a strike.

In doing so, he hurt not only the citizens and visitors of New York City. He hurt his own workers. The Reasonable MSM, normally a cheerleader for militant unions and socialist-lite associations, mercilessly bashed the TWU from the beginning. Several of the blogosphere's finest jumped on the media bandwagon for a change. It wasn't long before frustrated commuters and New Yorkers parroted the mantras of fiscal conservatives and their breatheren:
"You T.W.U. workers disgust me," said one message. "The benefits/options you're asking for is unheard of in most jobs. People are lucky to get 3 percent annually. Why should you people get paid more than teachers, police and social workers?"

Another posting said: "I am a daily commuter who believes in worker rights. However, your benefits are over and above anything I can ever anticipate in my entire working career. Retire at 55? You must be kidding. I am an indentured servant until I am at least 70."
Moreover, Mr. Toussaint's union militancy is at least two decades too late. The public no longer accepts the "social justice" claims of many unions, and New Yorkers aren't buying the TWU's similar stance. In fact, even pro-union economists acknowledge that unions may actually be harming workers' long term prospects, and many workers may agree:
According to Harvard economists Richard Freeman and James Medoff, who look favorably on unions, "Most, if not all, unions have monopoly power, which they can use to raise wages above competitive levels." The power that unions have to fix high prices for their labor rests on legal privileges and immunities that they get from government, both by statute and by nonenforcement of other laws. The purpose is to restrict others from working for lower wages. As anti-union economist Ludwig von Mises wrote in 1922, "The long and short of trade union rights is in fact the right to proceed against the strikebreaker with primitive violence."

Those unfamiliar with labor law may be surprised by the privileges that U.S. unions enjoy. The list is long. Labor cartels are immune from taxation and from antitrust laws. Companies are legally compelled to bargain with unions in "good faith." This innocent-sounding term is interpreted by the National Labor Relations Board to suppress such practices as Boulwarism, named for a former General Electric personnel director. To shorten the collective bargaining process, Lemuel Boulware communicated the "reasonableness" of GE's wage offer directly to employees, shareholders, and the public. Unions also can force companies to make their property available for union use.

Once the government ratifies a union's position as representing a group of workers, it represents them exclusively, whether particular employees want collective representation or not. Also, union officials can force compulsory union dues from employees, members and nonmembers alike, as a condition of keeping their jobs. Unions often use these funds for political purposes—political campaigns and voter registration, for example—unrelated to collective bargaining or to employee grievances. Unions are relatively immune from payment of tort damages for injuries inflicted in labor disputes, from federal court injunctions, and from many state laws under the "federal preemption" doctrine. Sums up Nobel Laureate Friedrich A. Hayek: "We have now reached a state where [unions] have become uniquely privileged institutions to which the general rules of law do not apply."

Labor unions cannot prosper in a competitive environment. Like other successful cartels, they depend on government patronage and protection. Worker cartels grew in surges during the two world wars and the Great Depression of the thirties. Federal interventions—the Railway Act of 1926 (amended in 1934), the Davis-Bacon Act of 1931, the Norris-LaGuardia Act of 1932, the National Labor Relations Act of 1935, the Walsh-Healy Act of 1936, the Fair Labor Standards Act of 1938, various War Labor Boards, and the Kennedy administration's encouragement of public-sector unionism in 1962—all added to unions' monopoly power.

Most unions in the private sector are in crafts and industries that have few companies or that are concentrated in one region of the country. This makes sense. Both factors—few employers or regionally concentrated employers—make organizing easier. Conversely, the large number of employers and the regional dispersion of employers sharply limit unionization in trade, services, and agriculture. A 1989 unionization rate of 35 percent in the public sector versus 12 percent in the private sector further demonstrates that unions do best in heavily regulated, monopolistic environments.

After nearly sixty years of government encouragement and protection of unions, what have been the economic consequences? A 1985 survey by H. Gregg Lewis of two hundred economic studies concluded that unions caused their members' wages to be, on average, 14 to 15 percent higher than wages of similarly skilled nonunion workers. Other economists—Harvard's Freeman and Medoff, and Peter Linneman and Michael Wachter of the University of Pennsylvania—claim that the union premium was 20 to 30 percent or higher during the eighties.

The wage premium varies by industry. Unions representing garment workers, textile workers, white-collar government workers, and teachers seem to have little impact on wages. But wages of unionized mine workers, building trades people, airline pilots, merchant seamen, postal workers, teamsters, rail workers, and auto and steel workers exceed wages of similarly skilled nonunion employees by 25 percent or more.

The wage advantage enjoyed by union members results from two factors. First, monopoly unions raise wages above competitive levels. Second, nonunion wages fall because workers priced out of jobs by high union wages move into the nonunion sector and bid down wages there. Thus, some of the gains to union members come at the expense of those who must shift to lower-paying or less desirable jobs or go unemployed.


The monopoly success of private-sector unions, however, has brought their decline. The silent, steady forces of the marketplace continually undermine them. Linneman and Wachter, along with economist William Carter, found that the rising union wage premium was responsible for up to 64 percent of the decline in unions' share of employment in the last twenty years. The average union wage premium for railroad workers over similarly skilled nonrailroad workers, for example, increased from 32 percent to 50 percent between 1973 and 1987; at the same time, employment on railroads declined from 520,000 to 249,000. Increased wage premiums also caused declines in union employment in construction, manufacturing, and communications. As Rutgers economist Leo Troy concludes, "Over time, competitive markets repeal the legal protection bestowed by governments on unions and collective bargaining."

The degree of union representation of workers has declined in all private industries in the United States in recent decades. A major reason is that employees do not like unions. According to a Louis Harris poll commissioned by the AFL-CIO in 1984, only one in three U.S. employees would vote for union representation in a secret ballot election. The Harris poll found, as have other surveys, that nonunion employees, relative to union workers, are more satisfied with job security, recognition of job performance, and participation in decisions that affect their jobs. And the U.S. economy's evolution toward smaller companies, the South and West, higher-technology products, and more professional and technical personnel continues to erode union membership.

In the United States union membership in the private sector peaked at 17 million in 1970 and had fallen to 10.5 million by 1989. Moreover, the annual decline is accelerating. Barring new legislation, such as a recent congressional proposal to ban the hiring of nonunion replacement workers, private-sector membership will fall from 12 percent to about 7 percent by the year 2000, about the same percentage as a hundred years earlier. [Editor's note: this prediction was made in 1992.] While the unionization rate in government jobs may decline slightly from 35 percent, public-sector unions are on schedule to claim an absolute majority of union members a few years after the year 2000, thereby transforming an historically private-sector labor movement into a primarily government one. Asked in the twenties what organized labor wanted, union leader Samuel Gompers answered, "More." Today's union leader would probably answer, "More government." That answer further exposes the deep, permanent conflict between union members and workers in general that inevitably arises when the first group is paid monopoly wage rates.
Finally, the TWU strike may encourage the MTA to fire the provocateurs and initiate productivity members that cost the TWU even more jobs. How? Three words: Remote Control Operation (RCO):
Like many other industries, railroads have undergone dramatic restructuring over the past few decades. Advances in radio, telecommunications, computers, and other forms of technology have decimated the ranks of the nation’s railroaders, from brakemen and switchmen to clerks and car inspectors.

For train and engine crews, perhaps the biggest threat comes from Remote Control Operation (RCO) in the rail yard and from single-person operation of over-the-road trains. In fact, with a technology known as “positive train separation,” it may soon be possible to begin limited operation of some trains with no operator whatsoever.


RCO was implemented on a broad scale on most of the nation’s major railroads in 2002 (see Labor Notes, May 2003). Once in place, RCO eliminates the need for an employee at the controls of the locomotive, thus reducing crew size (and saving the employers money in wages and benefits).

The employees on the ground, who couple and uncouple the rail cars, join the air hoses, and perform a host of other tasks, are now able to operate the locomotive by manipulating the buttons and switches on their “belt-pack” devices.

A myriad of other technologies now conspire to make single-employee operation of over-the-road trains a possibility. First attempted—and then backed away from—by the union-busting Wisconsin Central in the 1990s, the practice has been waiting on the back burner. Various states, including Wisconsin, have adopted two-person crew laws in a union-sponsored effort to protect their membership and provide a safe work environment.

No single technology is responsible for the shift towards single-person crews. Centralized Traffic Control, whereby a train dispatcher has control over the entire piece of railroad (including remote control track signals and switches), eliminated the need for a head brakeman and rear flagman in many cases.

Automatic trackside detectors contributed greatly to the demise of the caboose, and made train inspection by an on-board crew stationed at the end of the train no longer mandatory. Advances in radio have allowed the dispatcher to speak directly to the train crew through base stations, so that s/he can communicate immediately with the crew regardless of the train’s location.

Taken together, these and other technologies have reduced the responsibilities of the train crew.

The national freight carriers appear poised to attempt to force the rail unions to accept the elimination of the road conductor. They are pushing for trains run with a single-person crew, a “transportation employee” who will not only run and take charge of the engine but will also assume the conductor’s duties (see page 3).

Rather than call signals to each other across the cab, the lone employee will call them over the radio. Rather than have the conductor handle necessary switches in front of the train, the employee would now dismount from the locomotive and throw them, or have an all-purpose “utility employee” tend to the switches.

The lone employee would no doubt also be expected to handle all of the paperwork for the train, keeping track of waybills, orders, hazardous material information, and more during his/her tour-of-duty.
The Paris Metro already utilizes some driverless trains. The MTA has a $1 billion dollar surplus and a labor problem. You do the math. Between this and the possibilities of EZ Pass technology for the transfer of fares, the MTA could butcher the TWU, save costs and hold the line on fares for strap-hangers. Exactly how do transit workers win in that scenario?

They don't. Thanks to this strike, they won't even have public support from arguably one of the most pro-labor cities in the United States. Meanwhile, they've ended their strike after three days and they still don't have a contract. The TWU has done a tremendous disservice to its workers ,and its city. They may also have added a nail to organized labor's coffin--if not hammered home the final one.