Never Shared in Boom
As Wall St. Reels, City Staffers Shrug

By MEREDITH KOLODNER

While Wall Street investors lick their million-dollar wounds and economists predict financial Armageddon, many city workers are facing the onslaught of a recession without having truly prospered during the boom times.

MITCHELL MOSS: City staff has benefits edge.

It is some of the city's lowest-paid workers who have fared the worst during a period when those in the financial industry mixed record profits with humbling losses.

Buying Power Down 7-10%

Since 1995, District Council 37 members have seen their real wages decline by about 10 percent, adjusting for inflation, which has risen by 40 percent between that year and 2007 in the metropolitan area, according to the U.S. Bureau of Labor Statistics. During roughly the same time, the purchasing power of transit workers has dropped by about 7 percent.

"Oh, no, these have not been good times," said Diane Harper, a 19-year veteran Station Agent. "The raises, you really don't even feel them. Everything just keeps going up."

"Our raises are like inch-worms," another Station Agent commented, "When it comes to us, there's always some kind of debate about how much we deserve," referring to the higher esteem in which the public holds some other employee groups.

A MIXED RECORD: During Mayor Bloomberg's tenure, some employee groups including Teachers and firefighters have received pay hikes that exceeded the inflation rate, with longer work schedules a key element in those contracts. But members of District Council 37, due to an initial contract reached with the Mayor that began with a wage freeze and further reduced pay for new workers, have continued to lose ground to inflation, a problem that dates back to the early 1990s.

Other city workers have fared somewhat better. The Uniformed Firefighters Association, for example, has had real wage increases of about 8 percent since 1995. The Teachers, who fell behind in the last half of the 1990s, losing about 3 percent in real wages, have had basic wage increases outpace inflation by about 7 percent since 2000 under Mayor Bloomberg. There have also been jumps in wages for experienced Teachers, bonus opportunities and a 43-percent hike in the starting salary. Like the firefighters, however, the Teachers are putting in longer hours.

The mid-1990s brought two-year wage freezes for most city workers, as the unions buckled under Mayor Giuliani's aggressive budget-cutting, but the last seven years have not been much kinder to DC 37 members. From 2000 to 2007, DC 37 members' real wages declined by almost 6 percent, and starting salaries were cut.

Raises Secured

By way of a silver lining, many city workers are relatively well-positioned for at least the next two years, having negotiated contracts when there was a budget surplus that will give them annual increases of 3.5 to 4 percent.

And one Bloomberg advisor argued that salary wasn't everything. "You have to look at the total package - salaries, benefits and pensions," said Mitchell Moss, an urban planning professor at New York University's Wagner School of Public Service. "The private sector has had real cutbacks in health care and reduced contributions to pensions. The city has been able to maintain pensions and health-care benefits."

But economists note that the cuts in the private sector have not hit everyone in the same way. "As a general matter, low- and moderate-wage workers have not done well over the past five to eight years," said Lawrence J. White, a professor of economics at the Stern Business School at NYU.

Well-Off Get Weller

In New York, people making more than $200,000 saw a 96 percent increase in income between 2003 and 2007, according to the New York State Division of the Budget, which gets its figures from the state Tax Department. Median incomes increased slightly, while those at the bottom end of the wage ladder experienced a decrease.

Many economists cite changes in technology and foreign competition as two factors that have hurt the bargaining power of lower-skilled workers. The public sector echoes the private, they say, as a downward pressure is exerted on wages for all lower-skilled jobs.

Others argue that government policies have played a significant role. Trudi Renwick, senior economist at the Fiscal Policy Institute, points to the change in welfare policy in the 1990s, which caused an influx of low-skilled workers into the workforce. "There weren't more jobs for them, and that's going to pull down wages," she said, "because they're all in the same low-wage market."

The Farm-Out Hammer

Further increasing the wage gap, New York has also followed the national trend of cutting taxes for the highest earners. Over the last 30 years, the state has cut its top tax rate in half, from 15.4 percent to 6.9 percent, according to an FPI analysis.

Ms. Renwick also pointed to the long delay increasing the minimum wage nationally and in the state, as well as the trend towards contracting out of city services. "It can be used as a bargaining tool by city government," she said: '''If you don't concede to our very low increase, we're going to contract out services.'''

Meanwhile, city employees watch the stock market careen from day to day and brace for the future. "I keep telling my kids, you gotta save," said Ms. Harper. "I wish I had a little more, but I don't see us getting anything in the future. But then again, there are a lot of people making a whole lot less than we are."