Hire a Construction Worker, Fire a Bus Driver?

cta_bus_driver.jpgGreen-collar jobs are on the line in Barack Obama’s adopted hometown. Photo of CTA bus driver: goatopolis/Flickr

It’s stimulus package logic: Lay off a bus driver now and hire a construction worker in a couple of months or a year.

Congress and purported urbanist Barack Obama are fiddling with a 1950s-era stimulus package while America’s transit systems burn. You name the city, and its transit system is falling off a financial cliff.  In Denver, Minneapolis, New York, and dozens of other large and small cities, revenue is plunging from the sales and real estate taxes that transit depends on. So despite big increases in transit ridership, many transit providers
are cutting service and even laying off drivers. Yet not one cent from the $825 billion stimulus package would protect America’s bus and subway riders from massive service cuts and fare hikes.

To transit riders, environmentalists and anyone concerned with social justice, the stimulus package is political cognitive dissonance on an epic scale. The vast majority of the nation’s transit riders are low-income bus passengers, many of them African Americans in center cities — the constituents that Obama ministered to as a community organizer on Chicago’s South Side. Yet the proposed stimulus plan not only shortchanges public transit overall, it provides zero aid for day-to-day operations.

The stimulus is supposed to create jobs quickly. It calls for funding "shovel ready" projects, a standard that tends to discriminate against transit projects, and is absurd on its face. Transit operating funds can be spent quickly and easily, but it will take years to spend the billions in capital projects proposed in the latest version of the stimulus package:

  • $30 billion for highways
  • $31 billion to modernize federal and other public
    infrastructure for energy efficiency
  • $19 billion for clean water, flood control and environmental
    restoration
  • $9 billion for transit

It will take time for the economy and local government to digest and contract out billions in infrastructure spending. In contrast, local transit agencies can spend billions in stimulus aid quickly just by keeping existing bus and subway service operating. If the true intent of the stimulus is to inject money into the economy as quickly and efficiently as possible, and do so in an environmentally friendly and socially just manner, then transit operating assistance is an obvious choice.

The Minneapolis Star Tribune summed it up nicely in a recent editorial that quotes local transportation official Peter
Bell: "I’m not sure how much sense
it makes hiring a construction worker at the same time you’re laying off a bus
driver."

  • Larry Littlefield

    Don’t forget pensions as a reason for the destruction of transit systems. Evidently lots of places adopted the enrich the pensions, cut the amount contributed the pensions, and promise that investment returns would pay for it all we’ve seen in New York. The turn in the investment world has exposed this for what it was.

    I only mention this because the Chicago Transit Authority was one of the worst offenders. They even had special massive “supplemental” pensions for the executives, like the ones that are wrecking private sector companies, the kind most recently exposed in the Wall Street Journal today. And while contributing nothing to the pensions, they were using the rapidly depleting pension fund to pay retiree health care as well, even though no money was set aside for that purpose, nearly wiping the pension fund out.

    http://online.wsj.com/article/SB123265119486206979.html

    My discussion of the Chicago situation was posted here:

    http://www.r8ny.com/blog/larry_littlefield?page=16, in “The National Transit Database; Retired.”

  • JK

    Larry, as a NY state and city taxpayer, I completely and profoundly agree with you about the need for pension reform. However, given the Wall Street, home financing and auto bailouts, it is hard to see the fairness in applying a moral hazard test to transit operators. The criteria for the stimulus is supposed to be injecting money into the economy rapidly and with maximum effect. Supporting collapsing transit systems appears to be one of the best ways of doing that. This said, the medium to small transit operators would probably benefit the most from federal operating assistance given the size of their budgets and the likely amounts available.

  • What is the good of saving habeas corpus if the U.S. puts itself into a corner where it has to nuke Iran to secure energy sources and pipeline routes? The irony of it is that pipleline route protection requires total control of the populace.

  • Larry Littlefield

    “However, given the Wall Street, home financing and auto bailouts…”

    This is what bothers me — feudalism. Under capitalism, you get what you earn, at least in theory, and under socialism you get what you need, at least in theory. But what you often see is feudalism — what you get is what you’ve already got, whether you need it or not, deserve it or not. Particularly in feudal New York, the most ossified place in the country, where there is no “change.”

    I can understand cushioning transitions to prevent collapse. You can’t create the industries of the future overnight. But given the state of the credit market, it seems that our future has been set in stone — McMansions and SUVs — back when we had capital to allocate, and these private debts, like the public debts and unfunded retiree costs, are sucking the future out of us.

    Again, I’ve shifted from a public sector career to government skepticism over policies like this.

  • Niccolo Machiavelli

    One more rant on pensions at this time of crisis in transit funding, exactly what we need Larry.

    Quickly, that wage settlements have been agreed to based on unfunded pension improvements has been a bad practice, entirely out of unions control in transit. NYCERS and NYPERS pensions, where the unions sit on the boards, are actually much better funded than the MABSTOA and LIRR pensions entirely under the MTA control, for what that is worth, and it is not worth much. Regardless, unfunded pensions are a big and on-going problem.

    Regardless, pensions are very important to the particular operations of public transit operations and, through Railroad Retirement, the private freight railroads. Transit and railroads have particular labor market needs that are best addressed through having pensions, retiree healthcare and seniority based benefits that tend to hold employees with that single employer. The equipment has a very long life-cycle and requires development of skills and knowledge specific to that equipment. It is important to hold those workers to the railroads and transit systems especially during boom times when employers in other sectors that demand comparable skills, E.g. heavy equipment, construction, truck repair and operation and automotive repair, are able to offer transit and railroad employees sufficient wage incentives to leave the rails and buses.

    Larry’s attitude concerning pensions derives from a certain disdain of skilled union labor particularly but not limited to the MTA. This is often seen in frustrated college educated people who resent that the unwashed, uneducated, calloused can make as much or more as themselves. That people who work with their hands and backs are often less productive, more likely to injure themselves and others as they get older and therefor need pensions to hold them to that employer when they are young, strong and in demand is something lost on the “sink or swim” attitude implicit in Larry’s arguments.

    He also hates the teachers. Ironically, I did too, thats why I became a mechanic and a welder taking to books as I got older. Pensions hold teachers in place too and are a valuable tool in that market.

    “Supplemental pensions” the kind lavished on executives as a tax dodge are another thing entirely but no one was holding a gun at anyones head when they negotiated these instead of the compensation needed to lure the primo executive from one employer to another. There the pension serves an entirely different labor market. There it is used as bait to encourage someone to make a leap from one job to the next.

    That New York used unfunded pension improvements to replace wages it was not willing to pay was a way for Pataki to print money sort of like bonds without the mess of actually selling them. Bad Pataki. He could, of course, have actually funded mass transit and workers pensions at the time which would have saved us all a lot of money in the long run.

    Now is the time to focus on other things. Lots of pensions are broke, 401Ks are 101Ks and there is a lot of misery going around. Funding transit should not be held hostage to Larry’s jihad over past personal slights when he was an embittered public sector employee.

  • Larry Littlefield

    “Larry’s attitude concerning pensions derives from a certain disdain of skilled union labor particularly but not limited to the MTA.”

    Not so. It derives from a distain for those with advantages using their power to obtain more advantages, not limited to pensions, not limited to skilled workers, not limited to public employees, but across the board, with limited counter-examples. With regard to pensions, those in place a decade ago were fine enough, and should have been left alone.

    “No one was holding a gun at anyones head when they negotiated these instead of the compensation needed to lure the primo executive from one employer to another.”

    They sit on each other’s boards, and use the same compensation consultants, knowing that if they agree to a deal for CEO A, it will be used to justify a raise for CEO B, and then for themselves. The market and negotiation has nothing to do with it as far as I am concerned. And as in the public sector case, the cost is disguised.

    “He also hates the teachers.”

    Not while they are on the job. Those familiar with my writing on the subject noted the change in attitude that came with 25/55, combined with lower take home pay for new hires. Unjustifyable, and a planet shifing event in my view given its cost and what everyone knew was coming (unless they were being paid to pretend otherwise).

    I see the same thing over and over. Homeowners like myself already benefit from limitations on the growth of assessed value, but now also get that stupid $400 check. Senior citizens already benefitted from extensive government-funded health insurance, but rather than provide anything for the uninsured, they added benefits for those over 65.

    Pointing out the disparities doesn’t seem to make people happy, but sobeit. Then again, pointing out the disparities doesn’t seem to make a difference, either.

  • JK

    Speaking of disparities. The point of the piece is that bus riders are getting shafted. Nationally, they are the poorest among us and are being asked to spend more for less while the feds propose spending $31 billion to refurbish federal office buildings and $30billion to maintain and construct mainly suburban highways. Even accounting for excessive pension benefits for some transit workers, this is hard to stomach. Starving the transit beast, as your arguments seem to suggest, will kill off its ridership, not cure it of its pension woes.

  • a certain disdain of skilled union labor particularly but not limited to the MTA. This is often seen in frustrated college educated people who resent that the unwashed, uneducated, calloused can make as much or more as themselves.

    I’ll take Larry’s word on it that he doesn’t feel this disdain. But it is all too common among transit bloggers, especially when it comes to the wages that people like station cleaners make. The fact that station cleaners are people who live in an expensive city, work hard and probably have mouths to feed doesn’t seem to compute.

  • Jason A

    After being led down off the ledge of $4.00 gas this summer, I can’t understand why we’re not embarking upon a “mission to Mars”-styled expansion of transit in this country. “Thanks” to the collapsing economy, gas prices have dropped and we now enjoy some welcome wiggle room in righting the wrongs of the last 30 years. Here we have an unprecedented opportunity for transit – with all the political planets in line – and… what exactly have we learned from this summer?

  • Ian Turner

    Why should subway station cleaners make more than restaurant cleaners or office cleaners?

  • I often wonder if it’s easier to give transit funding and the like the shaft is because we don’t have any big industries in the US that build most of the streetcars and buses anymore. I know there are some, but the MUNI system in SF uses cars imported from Italy (!) and I remember when they wanted to rebuild the US Capitol’s subway, they had to hire a Canadian firm because no one in the US could build it.

    So, without a well paid army of lobbyists with their hands out for cash, you can see how easy it is for transit to get screwed. The fact we are giving billions to car companies too incompetent to build cars we need, and so on it just more icing on the cake.

  • rex

    Jason A, if we had the same subsidy for transit as we have for private cars. We would have two public transit shuttles a day leaving for Mars.

  • Larry Littlefield

    (I’ll take Larry’s word on it that he doesn’t feel this disdain. But it is all too common among transit bloggers, especially when it comes to the wages that people like station cleaners make.)

    I worry about what they will make in two years. The “solution” is always to cut the wages, pensions, and benefits of new hires, as has already been proposed. What makes me nuts is how predictable it is — a repeated cycle for which ignorance is no excuse.

    And, once again, I have nothing against the highly skilled and difficult to replace majority of teachers or transit workers. Unfortunately, with one year paid to be retired for every year worked, we will be losing then without being able to replace them, again.

    In any event, for out local transit situation the debts are worse than the pensions, and I’ll leave it at that.

  • Felix

    Larry, I know you have pointed out that 55/25 screws the new teachers. But you’ve never explained how it costs the public, at least that I’m aware.

  • Ian Turner

    Screw new teachers -> Can’t hire good teachers -> School quality drops

    IOW, by screwing the new teachers, you end up with a situation where taxpayers are paying the same amount for a worse education system.

  • Niccolo Machiavelli

    We actually have some pretty large transit manufacturers in the US. Most of them are non-union however and can’t match the joint clout that the UAW-Big Three lobby alliance or the Building Trades-Highway Lobby or in NY the 1199-Hospital Association juggernaut. The Class 1 Freight Railroads are starting to develop the sort of trust on joint issues with Rail Labor to move their issues in Washington and the state houses but they have a long way to go. Here, the big public transit employers and their unions have spent so much time at each others throats and blaming each other in the press that it has been hard to compose joint policies. Even now with NY transit hanging in the balance the TWU and TA are letting a third party decide their agreement without negotiating the critical Regional Bus understandings leaving it to the chaos of the NYS legislative process rather than formulate something that works for both of them.

  • Larry Hanley

    The pension issue conveniently distracts from the problem: the debt bomb is ticking and we are confonted with a dumb refusal by MTA and state and city officials to fight for a fair share of the stimulus for operating needs.

    Generally, transit pensions across the country are poverty plans. There are some big city exceptions. Nobody I know is getting rich on a transit pension. The real problem is the grinding down of the bodies of transit workers due to the working conditions. The medical standards force many bus drivers into early retirement. (Of course, after watching many Americans lose their middle class status—some think the solution is to impoverish everyone equally.)

    BUT the problem of the day is that riders are being pushed to the wall with cuts in service and rising fares. Uncle Sam will be spending a $trillion$ on something. Why not help us argue for job creation, a better environment, less foreign oil, national defense?

    We all witnessed Katrina by the way. How will we evacuate New York with the current transit system, or worse one with even fewer buses?

    Transit is among the purest forms of stimulus and investing in it can remake the economy and our cities. Let’s build buses and BRT…..before we see $4 gas again.

    Let’s stop the fare increases and service cuts.

  • oscarfrye

    would love to see an answer to #10
    still waiting

  • Because government should set an example by not trying to screw its workers over?

  • Kaja

    Government won’t ever set such an example, Angus. Government is just like any other business, except that it’s not formally for-profit, and it cannot have any competition.

    So government will behave in principle like any monopolist does.

    The only solution I can see is shrinking the geographic extent of government so that powerful local regimes like Mike Bloomberg’s are able to compete with other powerful local regimes.

    NYC can clearly compete favorably with other American and European cities. I’m not at all sure the Federal Government can.

    Is it weird that my love for my city and this lost art of urban space design has led me to secessionism?

  • After being led down off the ledge of $4.00 gas this summer, I can’t understand why we’re not embarking upon a “mission to Mars”-styled expansion of transit in this country.

    It’s because most politicians act like they’re from Mars.

  • Pete

    “After being led down off the ledge of $4.00 gas this summer, I can’t understand why we’re not embarking upon a “mission to Mars”-styled expansion of transit in this country.”

    Three words come to mind: automobile industry lobbyist

  • Government won’t ever set such an example, Angus. Government is just like any other business, except that it’s not formally for-profit, and it cannot have any competition.

    So government will behave in principle like any monopolist does.

    But the government has a mission of equal opportunity, and it can – and should – use its monopoly power to realize that mission.

    Of course I realize that government leaders don’t always follow that egalitarian mission, the same way that business leaders sometimes allow concern for their fellow creatures to trump cold profit maximization.

    My point is in response to Ian and Oscar’s question: the government has more of a mandate to pay its workers a living wage than the private sector. All workers who are supporting themselves deserve a living wage, but for the government to pay hardworking people peanuts is just wrong.

  • Ian Turner

    Angus,

    I think we’re going to have to agree to disagree. It’s not at all clear to me that hiring fewer and more highly paid subway cleaners leads to more equal opportunity, or for that matter that hiring the same number of subway cleaners with higher taxes leads to equal opportunity. I would much rather that the government treat its transportation system like a transportation system, and not a welfare system. If wages are too low, then a better place to do so is through something like the Earned Income Tax Credit, and not by discouraging employment.

  • I am very happy and very nice post…

    Very much satisfied with the suggestion which you provided and kept these ideas in my mind in investment and pension funding…..

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