Cash, Rate and Spin

Two recent wage contracts, involving Transport Workers Union Local 100 and Teamsters Local 237, have generated criticism that they are not as generous as they appear from the political opposition of the unions' leadership.

Not surprisingly, both unions are in the process of holding officer elections (most of the votes for Local 100 are already in, but new employees can cast ballots well into November in the tight contest). And since wage contracts are perhaps the most-tangible result a union leader can produce, the two at issue were bound to generate controversy.

The dissenting views on the deals' value come from Eunice Rodriguez, who is challenging incumbent Gregory Floyd for the Local 237 presidency, and Thomas Creegan, a Local 100 official running for higher office on the Take Back Our Union slate. (Letters on the opposite page from Mr. Creegan and Local 100 Secretary-Treasurer Ed Watt offer such contrasting views on the union's arbitration award that it's hard to believe they're discussing the same pact.)

The basic complaint of Ms. Rodriguez and Mr. Creegan is the same: that the 4-percent raises provided in the two-year Housing Authority pact for Local 237 members and in the first two years of Local 100's three-year contract with the Metropolitan Transportation Authority are artificially inflated. They point to the fact that the raises do not take effect at the very beginning of the pacts.

In the case of the Local 237 deal, each raise is paid 27 days after the beginning of the contract year, which Ms. Rodriguez said in a campaign flyer means they are actually each worth 3.66 percent.

The difference is even more pronounced under the Local 100 award. For one thing, the raises are split up, to be paid out as 2 percent and 2 percent in each of the first two contract years, and with a three-month delay in the first increase of each year, with the second one being implemented six months after that.

Mr. Creegan contends in his letter that this really means the raises amount to 2 percent a year. He is wrong, but there is a significant difference in the amount of cash Local 100 members will receive over the first two years of the pact as a result of the unorthodox payment schedule. As an example, if a union member's base salary had been $52,000 prior to the deal, he or she will receive about $2,100 less in base pay during the first two years of the deal than if they had received 4-percent raises on the first day of each contract year.

That might be cause for distress among some union members, particularly those who are planning to retire before the third-year raise takes effect. In the long run, however, union members at both Local 100 and Local 237 will see the full value of the increases in the form of higher pay rates, and even those nearing retirement would benefit from those rates as they affect their pension allowances.

Delaying the implementation of raises offers short-term cash savings for two agencies with distinct fiscal problems, the HA and the MTA. Most officials with an eye on the bottom line, however, whether veteran labor negotiators or chief executives with budget concerns, will tell you that the actual rate of pay is more significant than cash.

This has been seen countless times in contract deals. It is why the 2004 District Council 37 deal with the Bloomberg administration was seen as inferior to the one made almost simultaneously between the Pataki administration and the largest state employee union, even though the DC 37 deal offered a $1,000 cash bonus compared to the $800 bonus secured by the Civil Service Employees Association. The primary reason was that the overall value of the CSEA deal was superior, and the bigger DC 37 bonus had no long-term benefit for members since it was not rolled into base salary.

An even-stronger indication came in the 1994 contract deal reluctantly agreed to by the Patrolmen's Benevolent Association and the old Transit Police Benevolent Association with the Giuliani administration. Like other city deals for that bargaining round, it had wage increases worth just 7 percent over three years. In contrast to those deals, it featured a $4,000 cash bonus, twice as much as was obtained by the Housing police union earlier that year.

But that was hardly cause for celebration. To the contrary, the PBA president was so unhappy that he didn't attend the Gracie Mansion press conference announcing the deal. The Uniformed Firefighters Association did without the bonus altogether, instead opting for a permanent $500 increase in longevity pay for those with at least 10 years' service.

Union leaders like to work in round numbers because they know that's how their members measure their deals. It is why the United Federation of Teachers three years ago negotiated a two-year, 19-day pact: that slight extension allowed it to get a full 5- percent raise in the second year rather than slightly less under a two-year accord.

Giving up a couple of weeks or a couple of months can eventually add up by taking away the better part of a contract year. In the cases of Local 237 and Local 100, they did not do that, however; the loss to members is strictly in short-term cash. Most professional negotiators believe this is the right choice.

Our own sense is that if Local 100 President Roger Toussaint could do it again, he wouldn't have opted for the crazy-quilt election process that left most union members casting ballots before they knew their contract terms. The arbitration award is not the bonanza some have claimed, but it's good enough to have benefited Mr. Toussaint's hand-picked successor had he been able to campaign on it.